Award Limits in Medical Malpractice Claims

In 1994, the Michigan Legislature enacted various legislation aimed at tort reform. The basis for the reform was the concern over the rising number of medical malpractice cases and the corresponding increase in malpractice insurance rates. In a misguided effort to address this concern, the Legislature capped the amount of noneconomic loss damages that a plaintiff may recover in a medical malpractice action. Noneconomic loss is statutorily defined at MCLA § 600.1483(3) as "damage or loss due to pain, suffering, inconvenience, physical impairment, physical disfigurement, or other noneconomic losses."

MCLA § 600.1483(1), which addresses the recovery of noneconomic damages, limits recovery of such damages to $280,000, unless there is: 1) a brain injury or spinal injury resulting in hemiplegia (paralysis of one side of the body), paraplegia or quadriplegia; 2) an injury resulting in permanent mental incapacity; or 3) an injury resulting in the loss of the ability to reproduce. Under those circumstances, noneconomic loss damages would be capped at $500,000. This statutory scheme has its most obvious impact in those cases where the person is severely injured and has suffered noneconomic losses in excess of the statutory caps.

Two recent trial courts have declared the cap to be unconstitutional. In a Jackson County Circuit Court case, Judge Charles Nelson determined that the cap violated the Equal Protection Clause of the 14th Amendment by permitting the less severely injured to recover fully their noneconomic losses (up to $280,000) but denying the more severely injured the right to be fully compensated for their injuries. He further wrote that the Legislature had no reasonable basis for setting the cap at $280,000. Judge Judith Fullerton of Genesee County Circuit Court engaged in similar analysis and also found the cap to violate the Equal Protection Clause.

While these decisions represent a victory for those severely injured by a physician's mistake, the victory may only be short-lived. An appeal is almost certain should the plaintiff in either case receive an award in excess of the current statutory limits. If that occurs, the chances of Judge Nelson's or Judge Fullerton's decisions surviving appellate scrutiny appear slim. Under the rational basis test employed by both trial courts, legislation is presumed constitutional and the party challenging the statute has the burden of demonstrating that the legislation is arbitrary and irrational. Apart from the difficulty of establishing that legislation is arbitrary and irrational, other legislation that was enacted in 1994 as part of tort reform has already been found not to violate the Equal Protection Clause. In Neal v Oakwood Hosp. Corp., 575 NW2d 68, 77(Mich. App. 1997), the requirement that a person commencing a medical malpractice action give notice to the physician or hospital 182 days before filing suit has been held by the Michigan Court of Appeals to be rationally related to the purpose of promoting settlement of medical malpractice claims and reducing the costs of litigation. Given the decision in Neal, the Court of Appeals may be more inclined to find that other aspects of tort reform, including the cap on noneconomic losses, also satisfy the rational basis test. If so, those who have suffered noneconomic losses in excess of the cap and need the award the most will continue to be denied the right to be fully compensated for those losses.