The Volokh Conspiracy has a blog post from David Hyman discussing the logic behind caps on non-economic damages in medical malpractice cases. Apparently, a Harvard Law School student writing a paper on caps asked the principal legislative sponsor of California's (draconian) medical malpractice cap why they settled on $250,000. This was the response:
The theory was that you could never really and adequately compensate for pain and suffering, no matter how much money you provided. Money just doesn’t do it. But $250,000 (in addition to meeting the medical and other needs of the patient), properly invested to the extent that it elevated the quality of life over and above the post-injury status, was thought to be enough to do that job.
One of the comment to the post made a very insightful comment:
Malpractice litigation is very labor-intensive, and sensible attorneys won't commit to a case which will require many hours of labor unless they can anticipate a reasonable return on their investment of time. Malpractice insurance carriers know this, and they systematically drag out most cases so that the lawyers have to work more hours. (Unlike other tort cases, which might settle at any stage of the litigation, medical malpractice settlements are typically reached just before -- or even during -- trial, after the lawyer has done virtually all of the work.) These tactics further dissuade attorneys from taking on such cases. As a result, they further tilt the playing field in favor of the defense and made it harder for victims of malpractice to get their day in court.
Medical malpractice defense lawyers in Maryland always claim that meaningful settlement negotiations cannot begin until discovery is completed. Most malpractice lawyers - even us - have come to buy into this principle over time. But what separates malpractice claims from any other complex tort claim, many of which settle long before a lawsuit is filed?
The author of this comment goes on to suggest a creative out-of-the box resolution:
If lawmakers are really trying to reduce the cost of malpractice litigation, it would seem more sensible to put an identical cap on the attorney fees which can be earned by defense counsel. Of course, lawmakers have never seriously considered doing anything of the sort. Med-mal defense lawyers are paid by the hour, and their bills -- sometimes in the millions of dollars in very serious cases -- are typically paid by an insurance carrier. Limiting their fees would dissuade the sort of scorched-earth tactics malpractice defense attorneys often employ. As it is, though, defense attorneys can often earn many times the maximum fee which the plaintiff's attorney can earn in the same case, and have every incentive to put more hours into a given case in order to wear down their opponents. If this doesn't qualify as preferential treatment for the defense, I don't know what would.
This suggestion would not get 10 votes in any state legislature in the country. But I love the idea.
