The California Legislature, on Thursday, voted 60-0 to send AB-35, a bill which will raise the non-economic damage caps in medical malpractice lawsuits, to Gov. Gavin Newsom, who has indicated he will sign the bill into law.
Since 1975, Californians who filed medical malpractice lawsuits could only recover up to $250,000 worth of non-economic damages such as pain, suffering, physical impairment, inconvenience or disfigurement. The bill amends Section 3333.2 of the Civil Code, raising the non-economic damages cap for injury victims to $350,000 and raising the non-economic damages cap in cases of wrongful death to $500,000.
The bill states that the damage cap increases will apply to all cases filed or arbitrations demanded on or after January 1, 2023.
The bill also states that:
- The non-economic damages cap for injury victims will increase by $40,000 every January 1, starting in 2024, for ten years, up to $750,000
- The non-economic damages cap in cases of wrongful death will increase by $50,000 every January 1, starting in 2024, for ten years, up to $1,000,000
- The non-economic damages cap in injury and wrongful death cases will increase by 2 percent every January 1 to keep up with inflation starting in 2034
The bill will keep the healthcare system “accessible and affordable,” according to the California Medical Association.
The bill “affirms the important principle that injured patients deserve to be fairly compensated,” according to the Consumer Attorneys of California.
33 states limit the non-economic damages in medical malpractice lawsuits. Economic damages, such as medical bills and lost wages, are not capped in California.
Bill Changes Caps On Lawyers’ Contingency Fees In Medical Malpractice Lawsuits
The bill establishes contingency fee caps of 25 percent in settlements obtained before a civil complaint is filed and 33 percent in settlements obtained after a civil complaint is filed. The bill also states that the lawyer representing the plaintiff or claimant can file a motion for an even larger contingency fee when actions are tried in civil court or arbitrated, and that the court will exercise its discretion based on evidence establishing good cause for a larger contingency fee.
Current contingency fee limits, which the bill replaces, are:
- 40 percent of the first $50,000 recovered
- 33 1/3 percent of the next $50,000 recovered
- 25 percent of the next $500,000 recovered
- 15 percent of any amount on which the recovery exceeds $600,000
Doctors’ Sympathy Or Regret Can’t Be Used Against Them In Court
The bill also adds a new chapter to Part 2 of Division 103 of the Health and Safety Code, establishing that statements, writings or gestures, made to a malpractice victim or their family or representative prior to a lawsuit or arbitration demand being filed, expressing sympathy or regret, or reflecting, suggesting or accepting fault relating to a patient’s pain, suffering, death or adverse event, in relation to medical malpractice, shall be confidential and cannot be used against them in court or disciplinary hearings.
This change should “facilitate greater openness, trust and long term benevolence between patients and physicians,” according to California Medical Association president Dr. Robert E. Wailes.
UCLA Analysis: Current Non-Economic Damage Caps Associated With 16 Percent More Adverse Events
A May 2022 UCLA analysis found that the current $250,000 non-economic damages cap, which AB-35 is amending, has caused a 16 percent increase in adverse events.
“The cap, by lowering the risk of suit for malpractice, also weakens the deterrent effect of risk of suit on physician efforts to avoid malpractice,” the analysis states.
Repealing the cap, according to the analysis, “would increase attention to patient safety and lead to reduction of adverse patient events.”
The analysis also claims that if the $250,000 cap, which was instituted in 1975, were adjusted for inflation, it would have been a $1.257 million cap at the end of 2021, and that if the cap were adjusted to the current ratio of the cap to household income, the $250,000 cap’s current value would be $1.5 million.