California weighs inflation-adjusted damage caps for medical malpractice lawsuits

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by Heygood Orr and Pearson

Consumer advocates have proposed a new ballot initiative in California that would raise the state’s limit on non-economic damages in medical malpractice lawsuits for the first time in nearly 40 years. The California state legislature passed a law in 1975 known as the Medical Insurance Compensation Reform Act (MICRA), which fixed the maximum award for non-economic damages (such as pain and suffering) in medical malpractice cases at $250,000.

Advocates for medical malpractice victims argue that this limit on damages is unfair because the state has not increased the maximum award since the bill was passed. Because of inflation, this means that—in 1975 dollars—todays maximum damages are just $60,000.

The new ballot initiative would increase the cap on medical malpractice damages to a level adjusted for inflation—currently about $1.1 million. The ballot measure would also enable the state to adjust this amount every year to account for inflation.

In order to be placed before voters, the ballot initiative needs to collect about 500,000 signatures from registered California voters. If successful, the initiative will go on ballots across the state of California during the November 2014 elections.