Why is there a limit on non-economic damages?
In 1975, the California legislature, in response to public perception of a crisis in medical malpractice insurance costs, passed a number of laws that were intended to reduce the cost of malpractice insurance for doctors and hospitals. These laws, which together were called the Medical Injury Compensation Reform Act (MICRA), included a $250,000 limitation on all non-economic damages in any medical malpractice case. This law has been interpreted to include a single cap on recovery of non-economic damages for all heirs together in a wrongful death claim. However, in certain cases where two plaintiffs have separate causes of action, the law applies to each plaintiff separately. Thus, it is important that your attorney understands the specifics of these laws so that all proper plaintiffs can be included in a case to maximize recovery within the limit of the law. Unfortunately, despite several attempts over the past 30+ years to increase this limit, there has been no change in the law. Since 1975, this law has effectively decreased the value of claims each year because the value of $250,000 in 1975 is worth less than $75,000 in today’s dollars.
Although there is a limit on non-economic damages, which has a decreasing value each passing year, there is no artificial limit on recovery of loss of earnings and medical care costs. Furthermore, medical care costs have greatly increased since 1975 and most wages have increased at a higher rate than inflation. Consequently, it is important that any attorney who pursues a medical malpractice or negligence claim understands these economic realities and knows how to obtain evidence to maximize recovery of all economic damages.