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Unintended Consequences of Medical Malpractice Damages Caps


Catherine M. Sharkey


New York University School of Law


NYU Law Review, Vol. 80, pp. 391-512, May 2005

Abstract:     
Previous empirical studies have examined various aspects of medical malpractice damages caps, focusing primarily upon their overall effect in reducing insurance premium rates and plaintiffs' recoveries, and (to a lesser degree) upon other effects such as physicians' geographic choice of where to practice and the "anchoring" effect of caps that might inadvertently increase award amounts. This Article is the first to explore an unintended crossover effect that may be dampening the intended effects of caps. It posits that, where noneconomic damages are limited by caps, plaintiffs' attorneys will more vigorously pursue, and juries will award, larger economic damages, which are often unbounded. Implicit in such a crossover effect is the malleability of various components of medical malpractice damages, which often are considered categorically distinct, particularly in the tort reform context. This Article challenges this conventional wisdom.

My original empirical analysis, using a comprehensive dataset of jury verdicts from 1992, 1996, and 2001, in counties located in twenty-two states, collected by the National Center for State Courts, concludes that the imposition of caps on noneconomic damages has no statistically significant effect on overall compensatory damages in medical malpractice jury verdicts or trial court judgments. This result is consistent with the crossover theory. Given the promulgation of noneconomic damages caps, the crossover effect may also partially explain the recently documented trend of rising economic (as opposed to noneconomic) damages in medical malpractice cases.

Number of Pages in PDF File: 122

Keywords: medical malpractice, damages, caps, tort reform

JEL Classification: K13, K41

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Date posted: February 17, 2005  

Suggested Citation

Sharkey, Catherine M., Unintended Consequences of Medical Malpractice Damages Caps. NYU Law Review, Vol. 80, pp. 391-512, May 2005. Available at SSRN: http://ssrn.com/abstract=668023

Contact Information

Catherine M. Sharkey (Contact Author)
New York University School of Law ( email )
40 Washington Square South
New York, NY 10012-1099
United States
212-998-6729 (Phone)
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