Governor Signs Legislation Impacting Damages Caps in California Medical Malpractice Claims

On May 23, Governor Gavin Newsome signed Assembly Bill 35. This new legislation will affect both attorneys and injured parties in medical malpractice cases. Specifically, Assembly Bill 35 aims to increase the damages that plaintiffs (the person who filed the lawsuit) can be awarded in a medical malpractice claim and restructures the contingency fee that attorneys can receive.

Assembly Bill 35 and Medical Malpractice Claim Caps

Because medical practices were leaving California due to costly medical malpractice settlements, the Medical Injury Compensation Reform Act of 1975 was passed. Under this act, a plaintiff’s non-economic damages were capped and could not exceed $250,000, and the law did not account for inflation. With inflation, the cap today should be approximately $1.3 million.

In 2014, California voters beat the ballot initiative to increase the medical malpractice cap. Thus, lawmakers, attorneys, insurers, and others decided to draft and pass new legislation, Assembly Bill 35. Since it has been signed, the bill will go into effect in January 2023.

Changes to Damages Cap in Medical Malpractice Cases

As the bill has passed, MIRCA laws will be modernized, and the cap on damages in medical malpractice cases will change the cap to $350,000 in claims against one or more healthcare providers. This cap will also increase annually by $40,000 over the next ten years; after those ten years, it will increase by 2% each year. However, if the malpractice caused a death, the cap is $500,000 and will increase by $50,000 each year until it caps at a million dollars.

Non-economic damages aim to compensate a victim for the damages they have accrued that do not have a price tag, such as:

  • Emotional distress
  • Humiliation
  • Injury to reputation
  • Loss of consortium (or companionship)
  • Loss of enjoyment of life
  • Pain and suffering (physical and emotional)
  • Physical disfigurement

Are There Damages Caps in Other Personal Injury Cases?

While there are no damages caps in other types of personal injury cases, your damages can be reduced if you are partially at fault in the accident. Under California’s comparative fault (or negligence) law, a jury can determine the percentage of responsibility of each party in the accident. The plaintiff can still recover damages as long as they are only 50% or less at fault; however, their settlement award will be reduced by their assigned percentage of fault.

Changes to Contingency Fees

Assembly Bill 35 also restructures the way attorneys can charge clients contingency fees, which is the percentage of the settlement award that attorneys receive as payment for representing clients in their cases. Before the new legislation, the contingency fee structure was as follows.

  • 40% of the first $50,000
  • 33.3% of the next $50,000
  • 25% of the subsequent $500,000
  • 15% of awards that exceed $600,000

Under the new legislation, the contingency fee structure changes to 25% of the settlement award if the award is before an arbitration demand or filed complaint or 33% of the recovered award if the settlement was awarded from a settlement, judgement, or arbitration after a filed complaint or arbitration demand.

For instance, if a case is settled out of court for $100,000, then the attorney handling the case can receive $25,000. With the same $100,000 settlement and is judged after a trial, the attorney would receive $33,000.

Contact Our Firm Today for Help

At Eliot Reiner, APLC, our attorneys have over 30 years of collective experience. We are dedicated to helping our clients seek justice and fair compensation for their damages. If you or a loved one have suffered damages in an accident, we can help you calculate the damages you are owed and develop a case strategy to help minimize your liability in the accident. Our firm handles a wide variety of personal injury cases, including:

Suffered damages in a negligence-based accident? Contact our firm online or via phone (916) 778-3228 today.

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