Tag Archives: tort reform

Would you take $250,000 to be in pain for the rest of your life?

1978 law caps pain and suffering damages unreasonably low

by Brian Leubitz

$250,000 is a lot of money, right? If somebody asked you to eat a nasty bug for a quarter of a million dollars, you would at least give it a thought. But would you trade four of your limbs and a lifetime of phantom pain for $250,000? That’s basically what happened to Alan Cronin.

As you can see in the video to the right, Mr. Cronin’s story is devastating. After a routine hernia surgery, he quickly developed pain at the surgery site and eventually went to the hospital. Doctors were not able to find open the site for two more days, whereupon he was already in toxic shock from a massive staph infection. Though he was given only a 5% chance of survival, he made it. But he lost all four of his limbs to the infection, and is now in constant pain. Because of this medical negligence, his life was never the same.

For all that, he can collect $250,000 of pain and suffering damages. In tort law, damages were traditionally meant to make the victim of the tort whole. Or, to attempt as best as possible to reasonably compensate victims for their damage. With real estate, damages are easy to compute. You drove your car into a building? Well, it will cost X amount of dollars to fix it, you have to pay X amount of dollars.

But with a subjective injury, like losing four limbs and experiencing pain every day of your life, how much is that worth? Put it another way, would you take $250,000 to give up your four limbs, even putting aside the constant pain? Of course not.

But that it was MICRA does. The Medical Injury Compensation Reform Act of 1975 has not been adjusted for nearly forty years, and was never adjusted for inflation. What was once at least a sizable amount of money has lost around 75% of its value. The legislation now creates perverse incentives while putting patients at risk.

Alan Cronin knows only too well just how much this simple sounding law can impact a life.

MICRA Reform From On High?

I’ve written a couple of times about MICRA, a provision of California law that limits non-econimic damages, pain & suffering and the like, to $250,000. That law was passed in 1975, and the amount has not been updated since that time. Litigation costs and inflation have made that number look paltry today. In fact, few attorneys will take malpractice claims. The expenses they have to front aren’t covered by the cases that they win. And so, it isn’t surprising today to find families who have lost a family member due to malpractice, even shockingly obvious cases, unable to find an attorney. As a result, doctors that would have been booted out of the profession by a malpractice suit, continue to practice.

Of course, the response to that could be that regulators could watch doctors and ensure quality.  And if wishes were horses, I’d have more mustangs than the Nevada herds. The fact is that in the last thirty years, government oversight in all things consumer has been sorely lacking in the state and the country as a whole. Toys covered with lead are stocked on our shelves, and doctors avoid losing their licenses all the time.  Is this the system that we want to lay 100% of our faith in? Yes, we should have a robust regulatory scheme for doctors, but we also must recognize that doctors can’t always self-regulate. Courts serve a purpose.

And while it’s seemingly not a popular message in Sacramento these days, MICRA needs to repealed or reformed.  Thankfully, consumers have an ally in Speaker Pelosi.

The version of a national health care bill that Speaker Nancy Pelosi pushed through the House contains a provision that would push – but not quite compel – California and other states with malpractice damage caps to repeal them.(SacBee 11/30/09)

Dan Walters and I share one thing, we are both a teensy bit cynical. He sees this as a gift to lawyers, while I see it as a way to balance out the power differential between patient and medical infrastructure. Not quite the most optimal way, but if President Obama is going to push on tort deform, at least we can quit focusing on gifts to industry and instead try to figure out how we can structure a system to actually achieve policy goals.  Ha – good luck on that one, right?

California desperately needs to change MICRA, and if Speaker Pelosi can give the state a kick in the butt, well I say kick away Madame Speaker.

Tort Deform is Not a Solution, It Is a Tragedy

In President Obama’s speech, he threw a bone to the Right. Basically, he said that hew would be willing to follow up on some of W’s plans for experimental programs of limiting malpractice claims and adjusting insurance.  Since then (and before) he has said that he doesn’t think it will be a significant controller of costs.  And on that he’s right.

MedMal Line Graph

One of the principal myths surrounding medical malpractice is its effect on overall health care costs. Medical malpractice is actually a tiny percentage of health care costs, in part because medical malpractice claims are far less frequent than many people believe.

According to the Congressional Budget Office, malpractice costs amount to “less than 2 percent of overall health care spending. Thus, even a reduction of 25 percent to 30 percent in malpractice costs would lower health care costs by only about 0.4 percent to 0.5 percent, and the likely effect on health insurance premiums would be comparably small.”

MedMal Pie ChartI’ll go farther than the AAJ. Not only is it not medical malpractice law that is raising health care costs, it has actually far less than the CBO estimates.  You can see that costs are actually somewhat decreasing from the line chart up top (full PDF where I got these here), and the pie chart shows that medical malpractice premiums account for less than 1% of health care costs.

There are two reasons why Republicans love this stuff, neither of which have anything to do with the doctors “practicing their love“.  They are simply allies of convenience.  First, attorneys who represent victims of malpractice have traditionally been solid Democrats, and not just the voting kind, but also the giving great sums of money kind.  The Texas Democratic Party had become reliant on this money when Bush became governor by defeating Ann Richards. Trial Attorneys had been good friends of Richards, so taking on the trial attorneys in Texas made a great deal of sense for Bush. He was picking a fight with a group that had opposed him.

The other reason? Malpractice is bad for the bottom line of some big Republican donors. The American Medical Association has long aligned themselves with the Republicans, as have the corporations affected by tort law in general.  Medical malpractice reform has to be considered in the more general frame of tort reform

But as they say, as goes California, so goes the nation. And California led the nation in tort deform  Back in the 1970s, California enacted a bunch of legislation capping recoveries and generally limiting tort recoveries.  It was a defendant’s dream, and the big corporations who typically get sued a lot were right behind it pushing it along.

In the med-mal area, recoveries were limited to $250,000 of non-economic damages by the Medical Injury Compensation Reform Act (MICRA)  in 1975. Any damages that could not be proved up were thus capped, with no adjustment for inflation.  So, for example, a chid’s earning potential, as viewed by the law, is essentially zero, as they cannot be “proved.”  Even if the kid is singing in the womb, reading Shakespeare at age 2, and performing calculus at age 6, the damages for a lost child are too “speculative.” And thus any damages given to the kin of a child who was lost due to malpractice were non-economic and capped at $250,000.

That number hasn’t changed since 1975, and while it might have been possible for an attorney to make a decent living in 1975 at $250,000 per case, that is not the case today.  First there is inflation: $250,000 in 1975 is worth nearly a million today.  But even beyond inflation, trial costs are much higher today.  Expert witnesses now get astounding ($500-$1,000/hr) pay, and judges and juries now require more of this kind of testimony. Trials are very, very expensive.

And now, very few attorneys can afford to take these cases.  Even heartbreaking ones where families are left with nothing but a semblance of a shrine (Photo: Noah Berger / Chronicle):

Wayne Volkmuth learned what a “250 case” was while conducting research shortly after the loss of his 7-year-old son, Ryan, who died three years ago during a dental procedure at a Palo Alto clinic.

The “250” refers to $250,000, the most Volkmuth could recover in a medical malpractice claim over his disabled son’s death, a limit set 34 years ago by California’s landmark medical malpractice law. It’s also the reason his case was turned down by most of the dozen medical malpractice attorneys he and his wife consulted. (SF Chronicle 9/21/2009)

Insurance companies know how this works. They ssimply delay and delay, until any attorney who was willing to take the case figures out that the case is going to be a money loser.  And the result is this: the needless deaths of children and the elderly with no recourse whatsoever.

MICRA needs reform. At the very least, it needs to be adjusted for inflation.  But more than that, we need to restore the balance between the tort deform lobby and consumers.  Corporations and those with the biggest lobbying warchests win these fights, with stories like this as the end result.  Consumers are the ones who get screwed every time.  It is time to demand more from our legislators, both in Sacramento and DC.  Do not kowtow to those who simply waive cash. You represent the people, not the lobbyists. (See also ChangeCongress.org)

Another Corporate Gimmick – Arbitration

Dave Johnson, Speak Out California.

Does your credit card or bank loan agreement have an “arbitration clause?”  More and more consumer-oriented contracts and “agreements” have clauses specifying that disputes must go to arbitration rather than our civil justice system.  The justification for this is that arbitration saves the time and expense of working within our legal system.  But here’s the thing: the corporations choose the arbitrators and every arbitrator knows they will never, ever, ever, ever (ever) get another job if they rule against the corporations.  Never.

And guess what: 98.8% of arbitrations end up in favor of the corporations.  This is not a surprise.

The Progressive States Network’s newsletter has a story about this today, Arbitration: “Set up to squeeze small sums of money out of desperately poor people”,

The headline above is a quote from former West Virginia Supreme Court Justice Richard Neely, describing what his role was as an arbitrator at the National Arbitration Forum (NAF), a for-profit company hired to enforce mandatory arbitration clauses for credit card consumer loans.  “NAF is nothing more than an arm of the collection industry hiding behind a veneer of impartiality,” says Richard Neely.

In a devastating expose by BusinessWeek, Neely and other former arbitrators describe an arbitration system stacked completely against consumers– a system where creditors win 99.8% of all disputes involving companies ranging from Bank of America to Sears to Citgroup. Arbitration clauses buried in the fine print of credit card offers means consumers lose the right to have disputes decided in an independent court and instead are forced into corporation-selected arbitration firms.

The BusinessWeek story mentioned in the Progressive States Network story is titled, Banks vs. Consumers (Guess Who Wins)

This story about credit card companies taking unfair advantage of consumers is one more attack on citizen rights to access our own legal system (one more of so many attacks). Think about what is happening here.  First the big corporations fought against “regulations” which are the rules that We, the People set up requiring safe workplaces or environmental standards, or products that do not injure people, etc.  Then when fewer regulations of course resulted in worker or consumer injuries or toxic spills or other harms the inured parties filed more lawsuits asking the companies to make good.  So in response to these lawsuits the corporate-financed “tort reform” movement came along, working to limit the ability of citizens to be compensated for the results of corporate bad behavior.  The result has been fewer regulations preventing harms and more restrictions on citizen access to courts where we can seek damages after we are harmed.  

I didn’t even bring up the corporate-conservative movement efforts to install their own business-friendly judges in the courts.

But even those erosions of our access to justice has not been enough for the greedy corporations.  Now there is arbitration: clauses that show up in contracts and agreements that remove your ability to take a dispute to the courts at all!  And the judges in these courts are dependent on the corporations for their livelihood!

Deregulation, tort reform and now arbitration that is rigged against the consumer.  Drip, drip, drip.  One after another the big corporations are eroding the rights of citizens.  

Click through to Speak Out California.

Justice For … All?

Dave Johnson, Speak Out California

You hear a lot in the news about big corporate lawsuits.  If you closely followed this week’s business news, for example, you may have read about a jury ruling that Microsoft has to pay Alcatel-Lucent $367.4 million for violating patents.  Imagine the money that must have gone into lawyers, research and experts — even the copying bill must have been enormous.  And these cases take months to hear.

There were also court rulings about the drug Prevacid, another covering dialysis machines, and many, many others.

All of them big-money corporate cases with millions, even billions of dollars at stake.  These big companies have the money to take these cases to court.

But what if you or I need to go to court?  Are we on an equal footing?

A recent issue of The Progressive States Network’s newsletter, Stateside Dispatch, says,

According to Access to Justice: Opening the Courtroom Door [PDF file] by the Brennan Center, federal funding for legal services in real dollars has declined dramatically over the last twenty-five years.  In 2004, federally-funded programs turned away at least one person seeking help for each person served, leading to approximately one million cases per year being turned away due to lack of funding.

In fact, the Brennan Center report states that “most low-income individuals cannot obtain counsel to represent them in civil matters.”  On top of that, government-funded legal aid services are now by-and-large prohibited from helping people when they are harmed by corporations.

What do you do if you are a regular person injured by a product, or denied a job because of your age, or defrauded out of money, or any of things that can happen to people?  It used to be that a law firm might take the case based on a contingency fee, where they receive a percentage of any award resulting from your case.  But more and more these fees are restricted or awards are “capped.” So attorneys cannot afford to take your case.  Even if you can find an attorney willing to take your case “pro bono” there is still the cost of research, depositions, expert witnesses, etc. to consider.

Is this fair?  Is there anything more fundamental to our American concept of democracy than equal justice?  Access to the courthouse is an example of democracy leveling the playing field and providing fairness.  But we no longer have equal access.  And this means we no longer have fairness.

So what can we do about this?  First, we need to restore our own understanding of democracy and our individual stake in its preservation.  We must all recognize that equal justice is a fundamental requirement of a democratic society.  One reason this country was founded was to level the playing field between the rich and the poor.  So we all need to demand equal treatment under the law.  

In California we must demand a rollback of the “tort reform” measures that have taken away equal access to the courts and removed a regular person’s ability to fight back when harmed by a big company.  We must either remove the award “caps” and limits on attorney fees or implement a system of government funding for attorneys who represent regular people.  

Click to continue.

Better hope you are never the victim of medical malpractice

Because no matter how much you suffer, how much excruciating pain you endure, how many years it takes your family to recover from the incident, it’s only worth $250,000. And once you take the costs of getting that money out of corporate America’s vice grip, you’ll get about $12.47. Enjoy your McD’s. Take, for example, the story of a woman who died because doctors didn’t treat a bowel obstruction.

Dave Stewart’s 72-year-old mother went to Stanford University Medical Center for double knee-replacement surgery in April. Four days later, she was dead. To Stewart, an anesthesiologist, it seemed a classic case of medical malpractice. After the operation, his mother developed sharp abdominal pain that she described as “10 on a scale of 1 to 10,” according to her medical records.

The hospital failed to diagnose the cause of her pain and continued to treat her with narcotics. Her vital signs became unstable and she was moved to the intensive care unit, but she died of complications from an untreated bowel obstruction. State regulators cited the hospital in the case this fall. Stewart and his two sisters decided to sue, and they approached two dozen lawyers. One after another declined to take the case, always for the same reason: It wasn’t worth the money. (LA Times 12/28/07)

See, the thing is that back in 1975 when the state passed its “landmark” tort deform (as my old tort professor was fond of saying), the legislature capped damages for pain and suffering at $250,000. That’s it, and the law didn’t bother to index for inflation. So that $250,000 is only about $65,000 in today’s dollars. And given the costs involved in litigation these days, there’s a lot of investment and risk for not a lot of return.  So the saying is, if you mess up, make sure you really mess up and kill the patient, it’s cheaper that way.

It’s a perverse incentive to the medical community of this state, and it’s a travesty of justice to patients who are victimized by medical malpractice. The fact is that the tort laws in this state, supposedly a progressive bastion, are remarkably anti-consumer and very un-progressive.  Corporations routinely get off because they can afford to maintain a legal staff, while individuals are left with nothing when they are damaged.

Look, the point of tort law is to put the victim in the same place they would have been but for the actions of the culpable party.  It’s clear that, at least in California, that is no longer true.  Corporations have held sway too long in this state, and it’s time to see the pendulum swing back again in the favor of everyday Californians.