Illinois Medical Malpractice Insurance Threatened by Supreme Court Decision

side note: In 2005, the Illinois Legislature passed a series of tort reform laws intended to have a deflating effect on medical malpractice insurance premiums for the state’s healthcare workforce. At the heart of these reforms was a $500,000 cap on non-economic damages. Non-economic damages are harms such as pain and suffering, emotional distress, disfigurement or the loss of the enjoyment of life caused by an injury.

A non-economic damage cap is successful at reducing the cost of medical malpractice insurance because they increase the actuarial predictability of future medical malpractice awards and settlements. This deflates the cost of medical malpractice insurance because there is no need to keep reserves necessary in the case of a “jackpot” jury verdict of several millions of dollars.

Because non-economic damage caps are so successful at reducing the insurance burden on healthcare workers, many states have passed non-economic damage laws over the years. These laws have been furiously challenged in the state court systems as unconstitutional.

Trial lawyer groups opposed to non-economic damage caps argue that the caps violate state constitutions because they violate the established right to a trial by jury. They argue that if the jury comes back with a multi-million dollar verdict, but the judge reduces that verdict to be within the scope of the cap, the plaintiff was cheated out of the ability to have his or her case decided by a jury. Many state supreme courts have agreed with trial lawyers, finding the caps unconstitutional; and voiding them as law.

The two most recent instances where a state supreme court has voided medical malpractice non-economic damage caps have been Illinois and Georgia. This has happened several times in Illinois; each time legislators have reworded the language of the non-economic damage caps in hopes of passing supreme court muster, and each time have failed.

Illinois would be smart to look at how Texas ultimately got non-economic damage caps to pass challenge. The state put the caps up for a citizen ballot initiative to enshrine the caps as part of the state constitution. After educating the public on the benefits of the caps, voters ratified the initiative and the caps were part of the Texas Constitution. This effectively eliminated the ability of trial lawyers to argue the caps were unconstitutional.

In the spring of 2010, the Illinois Supreme Court overturned caps on certain medical malpractice damages originally enacted in 2005.

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