California damage caps unfairly punish victims of medical malpractice, legal experts argue

by Jay Pate

Legal experts are calling on the California legislature to raise the state’s cap on medical malpractice awards for the first time in nearly four decades. In an op-ed piece published in the Los Angeles Times, Stanford Law School professors Nora Freeman Engstrom and Robert L. Rabin argue that a 1975 law which limits noneconomic damages in medical malpractice lawsuits unfairly targets citizens who file malpractice claims, including individuals who have been left with severe injuries as a result of a doctor’s negligence.

The law in question, known as California’s Medical Injury Compensation Reform Act, limits the maximum amount that can be awarded for pain and suffering—or other noneconomic damages in a medical malpractice lawsuit—at just $250,000. Because this figure has never been adjusted for inflation in the nearly 40 years that it has been California law, a $250,000 award today is the equivalent of just a $56,000 award when the $250,000 cap was enacted in 1975.

Engstrom and Rabin write that it is “high time for the $250,000 cap to be repealed or relaxed:”

Relaxing the $250,000 cap, which has never been adjusted for inflation, is a wise move. As a reform idea, noneconomic damage caps have never made much sense.

The professors argue that one unintended but nonetheless disastrous consequence of damage caps has been to limit access to legal counsel for those who have been harmed by medical malpractice:

Attorneys handling tort litigation in the United States usually work on contingency: Clients pay nothing upfront, and lawyers are paid a portion of what is ultimately recovered. That means they’re reluctant to take on cases with little chance of significant payouts. When damage awards are limited, cases may no longer be profitable for plaintiffs’ lawyers. Because claimants without counsel rarely succeed in court, losing access to counsel means losing access to justice. Caps don’t just cut compensation; they also, in many cases, close courthouse doors entirely.

Engstrom and Rabin also write that because damage caps limit the potential for recovery in a lawsuit regardless of the severity of the injury that has been suffered, this law disproportionately punishes those who have been most harmed by a physician’s negligence:

Caps […] have a much greater impact on those who are the most grievously hurt. Someone who is, say, severely brain damaged or paralyzed can collect no more for loss of enjoyment of life than someone who will eventually recover fully.

Damage caps also disproportionately affect children, the elderly, and women who are the victims of malpractice, the authors write:

A 2004 study of California medical malpractice jury verdicts compared awards before and after the law took effect, and found that caps significantly exacerbated gender disparities in damage awards. Women’s pre-cap median jury awards were 94% of the median for men. After caps were imposed, however, the women’s median dropped to 59% of the men’s median. Both men and women were affected, but women were harder hit.

The reason why women, children, and the elderly are disproportionately affected by damage caps has to do with the way that the law limits awards for non-economic damages:

The law does not limit damages that reimburse a person for actual monetary losses caused by an injury, such as lost wages and medical bills. But because women tend to earn less than men (and the elderly and children generally earn nothing at all), they often have less in lost wages for which they can be reimbursed.

Engstrom and Rabin argue that damage caps fail to account for the way in which malpractice injuries can affect the lives of women in ways other than their paycheck:

Women are further affected because some injuries they sustain overwhelmingly result in noneconomic, rather than economic, damages. A miscarriage or loss of fertility brought on by medical malpractice, for example, might cause severe emotional injury but little economic damage.

The authors also argue that damage caps have failed in their stated goal of helping to bring down rising health care costs:

Certainly, reducing healthcare costs is a worthy goal. But a number of studies have considered whether caps actually cut costs, and results have been mixed. Furthermore, even when an effect is found, it tends to be trivial, with caps cutting total healthcare costs on the order of 0.5%.

Consumer advocates have proposed a ballot measure that would adjust the 1975 limit on noneconomic damages in line with inflation, quadrupling the allowable amount for noneconomic damage payouts for victims of medical malpractice. It this ballot initiative qualifies for the state ballot and is approved by voters, it would finally ease the burden on individuals who have been harmed by the negligence of a physician or surgeon and firmly protect their right to receive fair legal representation in a court of law.