ATLA - Caps on Medical Malpractice Damages Unconstitutional, Wisconsin Supreme Court

Association of Trial Lawyers of America
For Immediate Release: July 14, 2005

Contact: Carlton Carl
202-965-3500 x334
ATLA Press Room

Court says caps bear no "rational" relationship to lower premiums

Today the Wisconsin Supreme Court struck down the state's caps on non-economic (so-called pain and suffering) damages in medical malpractice cases, saying they bear no "rational" relationship to lower malpractice insurance premiums. The Court also called such limits "unreasonable and arbitrary" because they negatively impact the most severely injured patients. Wisconsin is the 14th state to strike down caps as unconstitutional.

In its ruling, the Wisconsin court noted that the state insurance commissioner concluded "no direct correlation can be drawn between the caps enacted in 1995 and current rate changes taking place in the primary market today."

The medical malpractice bill Congress is preparing to debate would enact just such an "unreasonable and arbitrary" cap nationwide, while doing nothing to force the insurance industry to lower malpractice premiums for doctors.

The Wisconsin Supreme Court ruling comes just days after the release of a new study conducted by the former insurance commissioner of Missouri, Falling Claims and Rising Premiums in the Medical Malpractice Insurance Industry, which showed that in the past five years, while doctors' insurance premiums have more than doubled, malpractice claims payments have remained stable or even decreased in some cases.

"This is the smoking gun that proves the insurance industry has been misleading doctors and health care consumers," said ATLA President Todd A. Smith. "Insurance companies have been price-gouging doctors and now we know the reason - to protect their bottom line."

Smith said that frivolous lawsuits should receive nothing, but juries should be allowed to decide what is appropriate compensation for severely injured victims of medical malpractice.

Excerpts of Court Ruling

"When the legislature shifts the economic burden of medical malpractice from insurance companies and negligent health care providers to a small group of vulnerable, injured patients, the legislative action does not appear rational."
"A $350,000 cap on noneconomic damages is arbitrary and creates an undue hardship on a small unfortunate group of plaintiffs."
"The $350,000 ceiling adopted by the legislature is unreasonable and arbitrary because it is not rationally related to the legislative objective of lowering medical malpractice premiums."
"Victims of medical malpractice with valid and substantial claims do not seem to be the source of increased premiums for medical malpractice insurance, yet the $350,000 cap on noneconomic damages requires that they bear the burden by being deprived of full tort compensation."