Medical Malpractice Caps

April 06, 1994

It's a fight state legislators thought they had ended eight years ago. But the Court of Appeals has returned the financial dispute among physicians, insurance companies and trial lawyers to the legislative arena. The outcome is very much in doubt.

This battle revolves around a cap on "pain and suffering" awards in malpractice and personal injury lawsuits. The limit was set at $350,000 in 1986. This gave insurers of doctors the predictability needed to end the crisis in malpractice insurance. Lawmakers thought they had set a high enough limit to reward plaintiffs yet low enough to keep doctors' premiums reasonable.

But the Court of Appeals last year ruled that this $350,000 ceiling does not apply to cases involving "wrongful death." As a result, there is no cap at all on these cases. The sky's the limit.

No wonder insurers and doctors are in a panic. Without a damage cap, juries could award Gargantuan sums, effectively chasing malpractice insurers out of Maryland -- as happened before the 1986 law.

A House-Senate conference committee must sort things out. Their respective bills raise the cap somewhat, set a higher limit for aggregate damages and add an inflation factor. Agreement will be easy on these. But there is sharp disagreement over a key element: should this new law be retroactive?

As it stands, 141 pending cases that were filed under the old law fall under the court's "sky's the limit" ruling. Insurers and doctors want these cases included under the new cap. The attorney general says that approach is legal, though he wonders about its fairness. Trial lawyers -- who could earn millions for themselves and their clients if there is no cap -- argue it would be wrong to impose a ceiling retroactively.

Yet these cases were filed with the understanding there was a $350,000 ceiling on non-economic damages. It would be wrong to change the rules of the game now by totally removing the cap. As it is, these plaintiffs will likely see the cap rise to $450,000 or $500,000, with a higher aggregate amount per case.

Maryland needs a new cap on "pain and suffering" litigation. Professionals must be able to obtain liability protection in this state. House and Senate conferees have an obligation to produce a bill that gives doctors and their insurers predictability for setting reasonable premium rates while establishing more generous limits for those who have been wronged. It is a delicate balancing act, but one lawmakers have already negotiated with tremendous success once before.

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