Judge Tosses Illinois Malpractice Caps Law

A judge in Chicago struck down the state's 2005 medical liability law today finding that its limits on pain and suffering awards in medical malpractice cases are unconstitutional.

Cook County Circuit Court Judge Diane Joan Larsen said she based her ruling concerning non-economic damages on the 1997 Best case decision (Best v. Taylor Machine Works) by the Illinois Supreme Court, which overturned a law setting compensatory damage caps.

The Illinois Supreme Court in the prior case found that a cap violated the separation of powers clause of the state constitution by removing judicial authority and encroached “upon the fundamentally judicial prerogative of determining whether a jury's assessment of damages is excessive within the meaning of the law.”

Judge Larsen wrote that the Supreme Court had determined that a cap on non-economic damages “disregards the jury's careful deliberative process in determining damages that will fairly compensate injured plaintiffs who have proven their causes of action.”

The case Judge Larsen decided, involving a hospital malpractice claim Lebron v. Gottlieb Memorial Hospital, et al, is the lead case amongst a group of cases challenging the 2005 reform law an expected appeal will go to the State Supreme Court.

An insurance trade organization the American Insurance Association reacted angrily to the ruling.

“Throwing out the non-economic damage award cap will once again subject medical malpractice insurers to excessive verdicts and settlements, setting back the limited progress we have seen in the Illinois market,” said Steve Schneider, AIA vice president, Midwest Region in a statement.

He added that the organization is “disappointed in the ruling and hope the caps are found constitutional on appeal. Otherwise, we fear a rewind to 2004 when the market was in crisis and Illinois citizens where without access to healthcare.”

AIA noted that the 2005, Illinois medical malpractice reform law was enacted after more than 135 physicians left the downstate Metro East area and there were more than 44 verdicts or settlements in excess of $5 million in Cook County alone in 2004.

The law set a cap on non-economic damages of $500,000 per doctor and $1 million per hospital (economic damages, such as money needed to pay healthcare expenses, remained uncapped).

It also permits periodic payments, restricts what kind of expert testimony may be offered, requires that the suit be certified as having merit and regulates a health care provider's admission of liability

As soon as the 2005 reform measure was signed into law, opponents said they would launch an instant legal challenge.

Advocates of the law argued that studies showed caps are effective in reducing insurance premiums and the law discouraged frivolous claims.

Judge Larsen's opinion indicated she might have ruled differently, but she wrote that she could not refuse to follow the law set by the high court “no matter what our personal views might be.”

Mr. Schneider said, “The business of insurance operates best when there is a stable, predictable tort climate. Illinois already has a poor liability climate by most measures and this ruling will do nothing to help that fact.”