Noneconomic Damage Caps Don't Curb Premiums

Research has shown, however, that caps in some states have not had an effect in lowering premiums; premiums have also increased within reason, or have stayed relatively flat, in jurisdictions without any caps. There is also a cyclical element at work: Premiums have increased dramatically, over short periods of time, once every decade since the 1970s.

It is clear that the success of and the need for caps have varied. The question then becomes, has it been prudent for various state legislators to enact such caps, if there has been no uniformity across all jurisdictions over relatively long periods of time in the perceived causal link—in other words, if there has been no real proof that high verdicts and settlements (containing noneconomic damages as a major element) are the reason that physician premiums have increased so dramatically?

Caps have been enacted because of a persuasive method of advocacy known to many as the KISS (“Keep it simple, stupid”) principle. If you want to convince someone (typically, a juror) of a position, keep your point simple and straightforward. Telling legislators that in order to reduce malpractice insurance premiums, noneconomic damages must be capped is an example of KISS at work.

But in reality, increased insurance premiums are a product of complex and interrelated factors, including performance by financial markets, returns on premium dollars invested, and expected profit margins by insurers that invest in the financial markets. It may also be that these companies have a disdain for the legal profession, although it comes at the expense of patient care and those who suffer grievous injuries.

The continuing debate over capping noneconomic damages has yet to be settled, both in state and federal law. This sleeping dog has not found a resting place yet.

Update since the last issue: On Jan. 7, the Supreme Court declined to take the case of Adkins v. Christie, which dealt with confidentiality of peer review. That means that the lower court's ruling against the defendants will stand.