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February 01, 2011

House Panel Approves Medical Liability Bill

The House Judiciary Committee approved a bill Feb. 16 along party lines that would preempt state law to overhaul the medical liability system – a move long opposed by the ABA.

H.R. 5, which cleared the committee by a vote of 18-15, includes  provisions that would:

  • cap noneconomic damages at $250,000;
  • create a “fair share rule” under which each party would be liable only for its share of any damages; and
  • empower a court to reduce the contingent fees paid from a plaintiff’s damage award to an attorney, redirect damages to the plaintiff, cap contingent fees at certain limits, and further reduce contingent fees in cases involving minors and incompetent persons.

The ABA expressed concerns about the bill in a Feb. 8 letter to committee members, emphasizing that the states are the repositories of experience and expertise in medical liability matters.

 “For over 200 years, the authority to determine medical liability law has rested with the states,” ABA Governmental Affairs Director Thomas M. Susman wrote. “This system, which allows each state the autonomy to regulate the resolution of medical liability actions within its borders, is a hallmark of our American justice system.”

In the letter, Susman specifically highlighted ABA policy that compensatory damages should not be capped at either the state or federal level, citing research showing that caps diminish access to the courts for low-wage earners – including the elderly, children and women – who would have more difficulty finding attorneys to represent them.

In the area of proportionate liability, the “fair share rule” proposed in the act would preempt existing state laws that provide for joint and several liability in medical liability cases. Susman explained that the ABA believes that at the state level the laws providing for joint and several liability should be modified to recognize that defendants whose responsibility is substantially disproportionate to liability for the entire loss suffered by the plaintiff are to be held liable for only their equitable share of the plaintiff’s noneconomic loss. The association opposes the provisions in H.R. 5 because they would preempt state law and also apply to all damages, not just noneconomic damages.

Susman also pointed out that the ABA has long opposed sliding scales for contingent fees and other special restrictions on such fees.

During markup of the legislation, the committee approved by voice vote an amendment to remove language that would have abolished the collateral source rule, a common law doctrine that prohibits evidence that a plaintiff has received monetary benefits, such as private health or liability insurance, from third parties. The amendment, offered by Rep. Robert C. “Bobby” Scott (D-Va.), also deleted language that would have prohibited providers of collateral source benefits from recovering any amounts paid after a court award is made to the plaintiff. The ABA supports, at the state level, retention of the collateral source rule while allowing third parties who have furnished monetary benefits to plaintiffs to seek reimbursement out of the recovery.

H.R. 5 now goes to the Republican-controlled House for consideration, where it is expected to pass. The bill is likely to face stronger opposition in the Senate.

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