California tort reform really does work

November 1, 2004

The 1975 California law that placed caps on non-economic damages awarded in medical malpractice cases reduces both defendants' costs and attorneys' fees, according to a new study by the RAND Institute for Civil Justice. Examining 257 plaintiff verdicts between 1995 and 1999, the study found a 30% reduction in the rate of recovery for plaintiffs and a 60% cut in attorneys' fees.

The 1975 California law that placed caps on non-economic damages awarded in medical malpractice cases reduces both defendants' costs and attorneys' fees, according to a new study by the RAND Institute for Civil Justice. Examining 257 plaintiff verdicts between 1995 and 1999, the study found a 30% reduction in the rate of recovery for plaintiffs and a 60% cut in attorneys' fees.

The California Medical Injury Compensation Reform Act places a $250,000 cap on non-economic damages in medical malpractice cases. It also puts limits on plaintiffs' attorney fees-at 40% of the first $50,000 of recovery, 33% of the next $50,000, 25% of the next $500,000, and 15% of any amount more than $600,000-reported Medical Liability Monitor (8/04).

The study found that, after applying both provisions of the law, plaintiffs' net recoveries were 15% less than they would have been without the cap on damages or fee limits. Researchers also found that: