North Carolina has instituted several reforms to its medical liability system over the years. It was among the first states to adopt alternative dispute resolution, which can offer a simpler means of settling disputes. These alternatives include mediation, arbitration, a summary jury trial and early neutral evaluation. North Carolina first began testing these methods in 1991, establishing a series of pilot programs that required mediation of civil actions. This system was effective in reducing both the length of conflict and the overall costs.
In 2001, a law capping noneconomic damages at $500,000 for medical malpractice cases was passed. The law made exceptions if the plaintiff suffered disfigurement, loss of use of part of the body, permanent injury or death, as well as if the defendant was found to have been reckless, grossly negligent, fraudulent, or committed the acts with intent or malice. The North Carolina damage cap is indexed to inflation.
In 2007, the North Carolina General Assembly passed the Voluntary Arbitration of Health Claims Act, which capped total damages at $1 million in medical professional liability claims where both parties agreed to use binding arbitration. The act created a well-defined system of alternative dispute resolution for medical liability cases, allowing medical malpractice insurance providers to offer more stability in premiums.