Medical Malpractice Lawsuit Award Caps In California: The Facts
California law limits/caps the amount of monetary damages for pain and suffering in lawsuits that can be awarded to victims of medical malpractice at $250,000.
- How Personal Injury Attorneys are Paid
- Medical Malpractice Caps Unfair to Poor
- Exceptions to the Medical Malpractice Cap
This law has been in effect since 1975, and has definitely limited the number of medical malpractice lawsuits filed in the state. Personal injury attorneys, which are generally paid a percentage of their client’s award, and only if they win, are under great pressure to only accept clients with malpractice cases whose facts are “open and shut”, as well as lucrative enough to cover their own expenses. As a result, many victims of injuries can not obtain proper legal representation, as they otherwise would be able to do were these caps not in place.
How Personal Injury Attorneys are Paid
Personal injury attorneys are generally paid on a contingency basis. This equates to a fee that is generally between 25% and 40% of their client’s award. The percentage they are allowed to collect is also limited by state law to no more than 40% of any jugdement or settlement amount. Many personal injury lawyers will charge a smaller percentage on their contingency fee for lawsuits that are settled out of court, prior to going to trial. This reflects the decreased cost attorneys must incur in cases where no trial is necessary. Since contingency fees can not be collected until after an award is made, attorneys must cover most of the expense associated with defending a client until a lawsuit has been completed.
In addition to awards for pain and suffering, which are capped at $250,000, there are additional “actual” damages that can be awarded by a jury during trial. These include expenses that are a direct result of the medical malpractice. These often include Doctor’s bills, hospital bills, medical tests, expert witness fees, copying, filing fees, loss of income due to being unable to work, the loss of additional, potential future income due to personal injury and a number of other personal and sometimes business related expenses.
Although there is no cap on the amount that medical malpractice victims can settle pain and suffering claims for out of court, Doctors and insurance companies rarely settle for an amount greater than the $250K cap, since they know that the victim could not collect any more than that, should the case go to trial.
Medical Malpractice Caps Unfair to the Poor
The cap on medical malpractice awards in California has been criticized for numerous reasons, one of the most compelling arguments being that it is disproportionately unfair to the poor. This is due to the fact that lawyers can often only afford to pursue cases when they include the past and future earning capacity of the malpractice victim. For example, if a 40 year old corporate executive who is paid $300,000 per year is unable to work any longer due to disability that results from a Doctor’s negligence, it can be argued that he will lose $6 million in future earnings (future earnings potential), based upon previously being able to work another 20 years. In this case, the attorney would stand to make as much as $2.4 million in fees, in addition to $100,000 in fees for pain and suffering (under the state cap). However, if a 40 year old janitor making $30,000 year sued for future earnings, the lawyer could only expect to collect a maximum of $340,000 in combined contingency fees. All other facts being equal, most personal injury attorneys would opt to take the case of the wealthy executive, rather than the janitor with a modest income.
Exceptions to the Medical Malpractice Cap in California
Medical malpractice victims can collect more than the $250,000 cap if more than one Doctor, Hospital or other party is involved, and if the cases are separated into different trials. This is rarely the case though, as the costs associated with more than one trial is usually more than a personal injury attorney would want to incur. Ultimately, cases can only be separated if a judge agrees to do so, in addition to at least one of the other parties involved.