Lawmakers told damage caps ineffective

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Associated Press

SALEM, Ore.:  Measures to limit medical malpractice damage awards would make it difficult for victims to get just compensation and do little to reduce insurance costs, lawyers and malpractice victims told a House panel on Tuesday.

“There are no bills here that do anything but deny access (to court) or increase costs of litigation,” Mic Alexander, a Salem attorney and president of the Oregon Trial Lawyers Association, told the House Judiciary Committee.

The committee is wading into what doctors call an insurance rate crisis that’s forcing physicians to abandon high-risk specialties like obstetrics.

Doctors are prodding legislators to limit jury awards for pain and suffering and take other steps including restricting attorney fees.

But insurance companies need to have a “fear of juries” to prompt them to reasonably settle malpractice claims against health care providers, said Kathy Brooks of Portland, whose son, Jerry, is severely brain damaged.

Brooks said medical aides failed to notice that her son’s heart stopped, cutting off oxygen, for several minutes before birth. Her malpractice claim was settled out of court.

Doctors want lawmakers to limit noneconomic damages to $250,000. The Oregon Court of Appeals in 1994 overturned as unconstitutional a $500,000 damage ceiling, and the state Supreme Court upheld the ruling in 1999.

Physicians contend the lack of restrictions on damages is a major reason for sharp increases in malpractice claims and awards in recent years.

Alexander, however, noted that malpractice insurance premiums are also rising in states with damage caps.

He suggested a doctor-funded liability plan could be formed and made mandatory for physicians, like the legal malpractice insurance plan operated by the Oregon State Bar for lawyers.

Collectively sharing the risk would reduce insurance rates for doctors in high-risk specialties, Alexander said.

Lawyers often take malpractice cases on contingency fee arrangements under which they get about one-third of any awards or settlements, Alexander said.

He said measures to limit fees would result in fewer lawyers handling the time-consuming and expensive cases, reducing people’s access to legal remedies.

A California man who sponsored a 1988 voter-passed initiative that cut insurance rates in that state said laws – not a damage ceiling – reduce insurance costs.

Harvey Rosenfield told lawmakers that despite a $250,000 pain and suffering damage limit passed in California in 1975, malpractice insurance rates continued climbing by as much as 39 percent a year before the initiative passed in 1988.

The ballot measure forced a 20 percent rollback in malpractice coverage rates and a variety of other insurance premiums and then more strictly regulated increases.

Rates after the rollback, through 2001, increased by no more than 6 percent a year, according to Rosenfield, president of the Santa Monica-based Foundation for Taxpayer and Consumer Rights.

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