California's new malpractice caps, signed by Gov. Gavin Newsom in May 2022, exponentially raise the stakes for malpractice claims. The long-expected changes to MICRA promise to bring awards for damages in line with modern purchasing power while protecting patients. But while the substantial costs attracted the attention of healthcare publications, other changes included in the bill may have just as significant of an impact.
The New Damages Cap
The law raises the cap for non-economic damages (called non-economic because they aim to reimburse patients/families for pain and suffering rather than lost salaries or wages) from $250,000 to $500,000 if the case involves death and increases to $350,000 if not. The bill also contains provisions that gradually ramp up the caps over the next ten years, adjusting to $1 million and $750,000, respectively. After ten years, the caps will increase by 2% yearly to account for inflation. These new caps go into effect on January 1, 2023.
Intriguingly, the new caps include changes to how much of the damages can be awarded to the trial's plaintiff lawyers. Before AB35, the contingency fee was limited based on the damages. However, starting in 2023, contingency fees depend on the stage of representation that the damages are awarded. This amounts to higher potential payouts for plaintiff lawyers and more incentive to try malpractice cases, according to defense lawyer Scott D. Buchholz, the managing partner, and senior trial lawyer at Dummit, Buchholz & Trapp.
The legislature indicates that plaintiffs' attorneys can collect 25% from cases that are settled before litigation. And then 33% of recovery after a judgment or a lawsuit is filed. So I think the combination of the ability to obtain additional damages and the higher return for the plaintiff's bar will bring successful general liability plaintiff attorneys back into the fold and other personal injury attorneys back to medical malpractice cases.
AB35's Apology Protections and the Future of California Malpractice
While most aspects of the law emphasize patient safety, plaintiff lawyers, and insurers, AB35 gives healthcare providers a powerful tool. The bill introduced universal protections for all pretrial apologies, faults, or expressions of sympathy. So, healthcare providers cannot be held liable for genuine communication with their patients.
Overall, AB35 looks to radically alter California's malpractice landscape in a time of rapid healthcare changes. With universal healthcare coverage and abortion protections on the road map in the state's legislature, healthcare professionals and their law counterparts must adapt quickly. For more information on the new bill, check out MICRA & Legislation leading up to the latest CA bill.