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April 01, 2016

Provisions in health care legislation prompt ABA concerns

The ABA expressed concerns last month about key provisions relating to damages, proportionate liability and contingent fees in H.R. 4771, a bill being considered by the House Judiciary Committee. 

The legislation − the Help Efficient, Accessible, Low-cost, Timely Healthcare (HEALTH) Act of 2016 – would preempt state laws to cap noneconomic damages in medical liability cases at $250,000 and place limits on contingency fees that lawyers can charge. The bill also would preempt existing state laws that provide for joint and several liability in medical liability cases by creating a “fair share rule” under which each party would be liable only for its part of any damages.

The committee began marking up H.R. 4771 on March 22 but did not complete action on the bill. Prior to the markup, ABA Governmental Affairs Director Thomas M. Susman emphasized in a March 21 letter to the committee that the authority to determine medical liability has rested in the states for more than 200 years. “This system, which grants each state the autonomy to regulate the resolution of medical liability actions within its own borders, is a hallmark of our American justice system,” Susman wrote. He pointed out that the states also regulate the insurance industry and, because of the role they have played, the states are the “repositories of experience and expertise in these matters.”

Explaining the ABA’s opposition to provisions that would cap noneconomic damages at $250,000, he said that research has shown that caps diminish access to the courts for low-wage earners such as the elderly, children and women, and that if economic damages are minor and noneconomic damages are capped, attorneys are less likely to represent these potential plaintiffs.

He also explained that courts already possess and exercise their powers of remittitur to set aside excessive jury verdicts.

In the area of proportionate liability, the ABA opposes the bill’s provisions to preempt existing state laws regarding joint and several liability. The association believes, however, that state laws providing for joint and several liability should be modified by the states to recognize that defendants whose responsibility is substantially disproportionate to liability for the entire loss in a case should be held liable for only their equitable share of the plaintiff’s noneconomic losses.

The ABA also opposes provisions to reduce contingent fees from a plaintiff’s damage award to an attorney, redirect damages to the plaintiff and further reduce contingent fees in cases involving minors and incompetent persons. Such changes, he said, could reduce total awards for patient victims by limiting availability of counsel.

During the March 22 markup, several committee members expressed serious concerns about the legislation. The committee’s ranking member, Rep. John Conyers Jr. (D-Mich.) called the bill “a solution in search of a non-existent problem” and inserted the ABA’s letter into the record as well as the opposition expressed by the National Conference of State Legislatures. He also noted that 30 organizations had sent letters to the committee opposing the legislation.

No more action has been scheduled on the bill, which was also referred to the House Energy and Commerce Committee.     

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