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July 31, 2017

House-passed legislation would preempt state medical liability laws

The House narrowly passed an ABA-opposed bill last month that would preempt state laws to impose caps of $250,000 on non-economic damages and place limits on contingency fees that lawyers can charge in medical liability cases.

In a letter to House leadership prior to the June 28 vote, ABA Governmental Affairs Director Thomas M. Susman emphasized that the authority to determine medical liability law has rested with the states for over 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 added that the states also regulate the insurance industry and are the repositories of experience and expertise in these matters, and that Congress should not substitute its judgment for the systems that have evolved in each state over time.

Susman said the bill, H.R. 1215, violates a principle from the Republican platform that calls for returning to the people and the states the control that belongs to them to make their own decisions about what’s best for themselves and their families and communities.

Susman cited three major areas of concerns with the bill:

Damages. The ABA believes that compensatory damages should not be capped at either the state or federal level, pointing out that research has shown that caps diminish access to the courts for low-wage earners such as the elderly, children and women. The courts already possess and exercise their power of remittitur to set aside excessive jury verdicts, which is the appropriate solution rather than an arbitrary cap.

Proportionate Liability. A fair share rule created by the bill would provide that each party would be liable only for its share of any damages, a step that would preempt existing state law that provides for joint and several liability in medical liability cases. Although the ABA believes that some improvements could be made in this area at the state level, the association opposes the exemption of existing state laws and provisions that would apply a proportionate liability rule to all damages, not just the plaintiff’s noneconomic damages.

Contingent Fees. The ABA sees no justification for provisions in H.R. 1215 that would empower courts to reduce the contingent fees paid from a plaintiff’s damage awards to an attorney, redirect damages to the plaintiff, and further reduce contingent fees in cases involving minors and incompetent persons. After studying the issues, the ABA concluded that sliding scales and other restrictions on contingency fees in medical liability may reduce total awards for patient-victims and deprive them of representation by the most highly skilled trial lawyers.

“The American Bar Association remains committed to maintaining a fair and efficient justice system where victims of medical malpractice can obtain redress based on state law, without arbitrary or harmful restrictions,” Susman concluded, urging House leaders to request hearings by the relevant House committees to examine the factors contributing to rising health care costs.            


Back to the July 2017 Washington Letter