Thursday, July 15, 2004
New study details savings through tort reform
[News Release, "Rand study finds California medical malpractice award caps have cut payments by 30 percent to those who win lawsuits," Rand Corporation, 12 July 2004.]
As medical malpractice insurance rates skyrocket around the country, it is interesting to note that California has been able to fundamentally change the rules of the game:
A landmark California law that caps non-economic awards in medical malpractice lawsuits has cut defendants’ payments by 30 percent to plaintiffs who win such lawsuits at trials, according to a RAND Corporation study issued today.
But because of limits on attorneys’ fees contained in the California Medical Injury Compensation Reform Act (MICRA), net recoveries actually realized by these plaintiffs were only 15 percent less than they would have been without the award caps or fee limits, researchers found.
In addition, researchers found that the combination of award caps and attorney’s fee limits reduced by 60 percent the amount collected by plaintiffs’ attorneys, which would have resulted in a significant shift in the types of malpractice claims an attorney might agree to represent.
“While MICRA’s impact on claims that do not reach trial is difficult to measure, the law has had a direct and observable role in about half the malpractice cases where there is a verdict for the plaintiffs,” said Nicholas M. Pace, the project’s lead researcher. “For defendants, for plaintiffs, and for attorneys, MICRA has clearly changed the playing field upon which malpractice claims are litigated in California.”
MICRA was passed by the California Legislature in 1975 when the state was in the midst of a medical malpractice insurance crisis, with premiums skyrocketing and some medical specialists unable to find coverage.
The law limits to $250,000 the amount a plaintiff can recover for non-economic damages such as pain, suffering, distress, or disfigurement. Damages for economic losses, such as medical expenses or lost wages, are not capped.
Juries in California make malpractice judgments without knowledge of the limits and judges then adjust the awards to comply with the state law. The law also limits the fees that may be collected by plaintiff’s attorneys, establishing a sliding scale that decreases the percentage paid to plaintiff’s attorneys as the size of a judgment grows.
[News Release, "Rand study finds California medical malpractice award caps have cut payments by 30 percent to those who win lawsuits," Rand Corporation, 12 July 2004.]
As medical malpractice insurance rates skyrocket around the country, it is interesting to note that California has been able to fundamentally change the rules of the game:
A landmark California law that caps non-economic awards in medical malpractice lawsuits has cut defendants’ payments by 30 percent to plaintiffs who win such lawsuits at trials, according to a RAND Corporation study issued today.
But because of limits on attorneys’ fees contained in the California Medical Injury Compensation Reform Act (MICRA), net recoveries actually realized by these plaintiffs were only 15 percent less than they would have been without the award caps or fee limits, researchers found.
In addition, researchers found that the combination of award caps and attorney’s fee limits reduced by 60 percent the amount collected by plaintiffs’ attorneys, which would have resulted in a significant shift in the types of malpractice claims an attorney might agree to represent.
“While MICRA’s impact on claims that do not reach trial is difficult to measure, the law has had a direct and observable role in about half the malpractice cases where there is a verdict for the plaintiffs,” said Nicholas M. Pace, the project’s lead researcher. “For defendants, for plaintiffs, and for attorneys, MICRA has clearly changed the playing field upon which malpractice claims are litigated in California.”
MICRA was passed by the California Legislature in 1975 when the state was in the midst of a medical malpractice insurance crisis, with premiums skyrocketing and some medical specialists unable to find coverage.
The law limits to $250,000 the amount a plaintiff can recover for non-economic damages such as pain, suffering, distress, or disfigurement. Damages for economic losses, such as medical expenses or lost wages, are not capped.
Juries in California make malpractice judgments without knowledge of the limits and judges then adjust the awards to comply with the state law. The law also limits the fees that may be collected by plaintiff’s attorneys, establishing a sliding scale that decreases the percentage paid to plaintiff’s attorneys as the size of a judgment grows.
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