An Economic Assessment of Damage Caps in Medical Malpracitce Litigation Imposed by State Laws and the Implications for Federal Policy and Law


Many states have implemented laws which limit non-economic (e.g., pain and suffering) damages as a result of medical malpractice. These laws are seen by proponents as reducing medical malpractice insurance costs and preserving access to health care – especially for lower income individuals. Opponents believe that individuals are harmed through being prevented from seeking a full measure of redress for medical malpractice incidents, by reducing access to the court system, and that these laws simply enrich insurance companies and doctors.

Federal lawmakers are currently studying the potential effect of uniform medical malpractice damage limits at the national level. It is therefore of interest to legal scholars, policy makers and the public to determine the actual effects of such laws.

We find that limits do not reduce access to the court system, yet reduce the incentive to litigate the weakest claims, reduce the average size of malpractice awards, and reduce total loss costs (a measure of insurance provider payments/losses). These savings are subsequently passed on to consumers.


Economics | Health Law and Policy | Insurance Law | Law and Economics | Medical Jurisprudence | Social Welfare Law

Date of this Version

September 2005