NCPA - National Center for Policy Analysis


August 4, 2004

California's landmark 1975 medical malpractice law is coming under fire from some consumer groups and lawyers. The law placed a $250,000 cap on noneconomic damage awards like pain and suffering. There is no cap on economic damages like lost wages and medical bills.

Proponents of the law point out that the state's malpractice insurance rates have risen less than half the national average since the cap took effect.

Critics say the law is outdated and reduces the incentive for lawyers to take on malpractice cases:

  • However, insurers have reported no decline in the rate of malpractice suits per doctor since the cap went into effect.
  • A recent Rand Corp. study showed that in 45 percent of malpractice trials, judges had to cut noneconomic damage awards by juries, who aren't told about the cap.
  • The cap would have risen to $882,000 by this year if it were adjusted for inflation, but it remains a flat $250,000.

Many lawyers are reluctant to take on cases that fall under the $250,000 cap, because taking a case to trial can easily cost $100,000. One malpractice attorney figured that even if he won a malpractice case subject to the cap, he would earn only $50,000, not enough to justify the many hours needed for such a case.

Jack Lewin, head of the California Medical Association, however, says the cap represents a trade-off: if malpractice insurance rates go up because of large trial awards, doctors will not want to take high-risk patients.

Source: Lisa Girion, "Justice Denied?" Los Angeles Times, August 1, 2004.


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