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A Cap is Born

By Gary S. Mogel

If medical malpractice reform is becoming historically significant enough to be described as having a “birthplace,” that birthplace would have to be California.

In 1975, California passed the Medical Injury Compensation Reform Act, the patriarch to which reforms passed or being debated in other states–as well as the current federal reform proposal–can trace their lineage.

According to S. Thomas Todd, a partner in Los Angeles-based law firm Horvitz & Levy LLP, the centerpiece of MICRA is the $250,000 cap on pain and suffering damages. MICRA also sets caps on attorney fees that can be awarded in medical malpractice litigation, requires disclosure of collateral payment sources, allows periodic payments for future losses, shortens the statute of limitations to one year in most cases, and facilitates arbitration, Mr. Todd noted.

Periodic payment of the judgment is where some states that enacted reforms have slipped up, according to Mr. Todd. “California's provision is intentionally vague and leaves the payments up to the judge, which is how it should be. Other states inserted interest provisions, so a $500,000 judgment becomes $1.5 million with interest over the course of many years. So the cost-saving feature of periodic payment disappears.”

Reproduced from National Underwriter Edition, March 10, 2003. Copyright 2003 by The National Underwriter Company in the serial publication. All rights reserved. Copyright in this article as an independent work may be held by the author.