The California Legislature made history on May 23rd, 2022 when they agreed to raise the maximum cap of damages for medical malpractice cases. As Governor Gavin Newsom signed the bill into law, the future of California’s medical malpractice legislation changed forever.
Starting on January 1st, 2023, medical malpractice cases will incrementally raise their maximum award cap every year. But how will the raised cap on medical negligence lawsuits affect civil attorneys as well as their clients? Will other states follow California’s lead and remove their award caps?
To look towards the future, it’s important to first understand the history of medical malpractice in California.
Summary: California’s History of Medical Malpractice Compensation Limits
In the 1970s, there was a growing healthcare crisis over the price and availability of medical malpractice insurance claims in California. The core of this panic centered around doctors raising their premiums in 1975. The California Medical Association had claimed their medical malpractice insurance rates increased by 400% during that time period.
Thus, in 1975, the Medical Injury Compensation Reform Act (MICRA) was enacted. It capped the amount a person in California could win in a medical malpractice lawsuit to $250,000. But why $250,000 in particular?
“The theory was that you could never really and adequately compensate for pain and suffering, no matter how much money you provided. Money just doesn’t do it. But $250,000 (in addition to meeting the medical and other needs of patient), properly invested to the extent that it elevated the quality of life over and above the post-injury status, was thought to be enough to do that job.”
–Barry Keene, Former California Assemblyman, Quoted Explaining MICRA Cap in 2006
Even after MICRA took effect, health insurance premiums continued to increase — some by more than 450%! In the figure below, you can see how in the twelve years after the enactment of MICRA, California doctors’ premiums rose faster than the national rate of inflation.
MICRA intended to lower medical malpractice liability insurance premiums for healthcare providers by decreasing their potential liability, but it did not mitigate the rising costs. Additionally, attorneys had a lower financial incentive to pursue such cases because of the imposed fee limit.
Hoping to address these healthcare and inflation concerns once again, on Thursday, May 12th in 2022, the California Legislature agreed to raise the cap for the first time in 47 years. Starting in January of 2023, “that cap will increase to $350,000 for people who were injured and $500,000 for the families of people who died.”
The cap will gradually increase over the next decade until they reach $750,000 for injured patients and $1 million for families of deceased patients. Then, the caps will increase every year by 2% to keep up with inflation.
How Does the Law Differ in Other States?
California has been strict about medical malpractice liability caps, but it’s not the only state. For example, Montana has a $250,000 cap on non-economic damages in medical malpractice cases, but it does not affect attorney fees. And, like California, Kansas had a cap of $325,000 between July 2018 to July 2022, but the Kansas Supreme Court ruled that the cap was unconstitutional in 2019. Kansas’ new cap is $250,000.
There are thirty-five other states with a medical malpractice cap, but all of them have variations or contingencies. These states are:
There is no definitive answer regarding if other non-capped states will change their award cap anytime soon.
What Opportunities Does the Raised Cap Provide?
California attorneys no longer have to worry about reduced fees, as the contingency fees for attorneys have been changed along with the overall cap limit.
MICRA has been a law over the past four decades. In this time, due to defendants’ maximum liabilities reducing by 30%, attorney fees were also reduced by 60%. A plaintiff attorney could not receive more than:
- 40% of the first $50,000 recovered
- 33 – 1/3% of the next $50,000 recovered
- 25% of the next $500,000 recovered
- 15% of any amount recovered in excess of $600,000
With those limitations lifted, attorneys have more opportunities to leverage more experts, visual litigation aids, and more. Some legal podcasts, such as one created by trial attorneys from The Simon Law Group, have even begun to discuss how California’s medical malpractice could become an emerging market for attorneys in the coming years.
Visual litigation strategies are more accessible & compelling
For medical malpractice cases, where errors in the standard of care including surgeries and other medical treatments are hard to explain, legal graphics and medical animations can elevate any presentation.
With the increasing cap and attorney awards, there will be more opportunities for both plaintiff and defense attorneys alike to leverage powerful tools such as medical animation. Plaintiff attorneys will utilize them to maximize the potential verdicts for their clients. Meanwhile, defense attorneys will likely see more medical malpractice lawsuits and can leverage animations to achieve a favorable defense verdict.
One animation can increase the settlement by 5x the cost of the visual itself, or more. In one case, the initial settlement offer was $450K. But after presenting the accident reconstruction animation, the defense team increased their settlement offer by $550K – for a total of $1M!
Justifying the cost has become easier with the limitation on cap lessened, as opposed to before when the cap severely limited the total award amount. When the restricted cap lifts in 2022, an animation will be even more of a realistic investment that can deliver a potential return of hundreds of thousands of dollars for injured clients.
Here are a few ways animations can support your medical malpractice case:
- Explain complex medical jargon to the jury
- Support your expert’s deposition or testimony
- Summarize complex procedures or negligent actions
- And more.
The Future of Medical Malpractice Caps
Over forty-five years ago, in the near history of medical malpractice in California, a law was created. It focused on limiting the award amount and attorney fees for medical malpractice cases. In 2023, that law will be reformed into an ever-increasing cap to keep up with inflation.
With the elimination of the low cap, attorneys now have an opportunity to take on more medical malpractice cases. To help them get the most favorable verdict or settlement for these new cases, attorneys can make a reasonable investment in medical graphics or animations.
Get a quote today and see how you can leverage a medical animation in your upcoming cases!
