If you have a medical malpractice injury, that is terrible news. However, the good news is that if you live in California, the medical malpractice laws have changed to benefit you.
On May 23, 2022, California Governor Gavin Newsom signed Assembly HB 35, which increases the damages a plaintiff may receive on medical malpractice claims. Additionally, it restructures how an attorney can receive contingency fees.
Previously in California, non-economic damages such as pain and suffering were limited to $250,000. It was a 47-year-old law and did not increase with inflation.
A Brief History of Medical Malpractice Claim Caps in California
In 1975, Governor Jerry Brown signed the Medical Injury Compensation Reform Act of 1975. Known as MICRA, the law limited pain and suffering in medical malpractice awards to $250,000. This legislation was in response to medical providers leaving California due to sizeable medical malpractice settlements.
However, in the MICRA, there was no provision for inflation. Therefore, over 45 years later, the cap is still $250,000. Adjusting for inflation, that should be over $1.3 million today.
In 2014, there was a ballot initiative in California to raise medical malpractice awards. However, two-thirds of California voters defeated the measure.
To avoid a new ballot initiative, trial attorneys, consumer groups, healthcare insurers, and healthcare providers came together to support this new legislation resulting in Assembly Bill 35. This law goes into effect on January 1, 2023.
Changes to Damages
The first significant change is the increase in non-economic damages. The new legislation places a cap at $350,000 against one or more healthcare providers collectively. The limits increase annually by $40,000 over the next ten years to $750,000. At that point, it will increase by 2% annually.
If the medical malpractice results in death, the new cap is $500,000 and increases by $50,000 annually until it caps at $1,000,000.
What Are Non-Economic Damages?
In California, “non-economic damages” refer to non-monetary losses such as pain, suffering, inconvenience, mental suffering, emotional distress, loss of society and companionship, loss of consortium, injury to reputation, and humiliation.
Non-economic damages are subjective and don’t have a monetary figure. However, juries must determine the non-economic damage or “pain and suffering” and may consider:
- How has the injury affected the plaintiff’s life?
- Is the plaintiff able to resume the same activities as before the injury? For example, if they were a runner, could they still run?
- Does the plaintiff have emotional distress (i.e., nightmares)?
- Are there physical injuries (i.e., scars or disfigurement) causing them to withdraw from friends and family or social settings?
What Are Monetary Damages?
Non-economic damages are different than monetary losses. Monetary losses are quantifiable losses resulting from the injury. Examples of financial losses are loss of income, medical expenses, property loss or expenses to repair or replace property, and loss of business opportunities.
Changes to Contingency Fees
Second, Assembly Bill 35 restructures the way attorneys charge contingency fees. A contingency fee is usually a percentage of the recovered award a lawyer receives for representing your personal injury case. In the new scheme, fees depend on the stage of litigation, not the amount of the award.
Previously, California’s limitations on contingency fees were:
- Forty percent of the first fifty thousand dollars ($50,000)
- Thirty-three and one-third percent of the next fifty thousand dollars ($50,000)
- Twenty-five percent of the next five hundred thousand dollars ($500,000)
- Fifteen percent of any amount which exceeds six hundred thousand dollars ($600,000)
However, under the new law, the contingency fee structure is:
- 25% of the award recovered if the settlement is before a filed complaint or demand for arbitration.
- 33% of the award recovered if the settlement results from a judgment, settlement, or arbitration after a filed complaint or demand for arbitration.
For example, if your case settled out of court for $80,000. Your lawyer receives $20,000. Previously, that amount would be close to $30,000. However, if your case goes to trial and the judgment is $80,000, your lawyer receives $26,400 instead of $30,000.
The new law makes two other changes to existing laws. First, the law expands to include actions against health care institutions. Second, any statements of sympathy or fault made by a health care provider are not admissible as evidence of liability.