The Receding Tide of Medical Malpractice Litigation: Part 2—Effect of Damage Caps

31 Pages Posted: 24 Oct 2013

See all articles by Myungho Paik

Myungho Paik

Hanyang University - College of Policy Science

Bernard S. Black

Northwestern University - Pritzker School of Law; Northwestern University - Kellogg School of Management; European Corporate Governance Institute (ECGI)

David A. Hyman

Georgetown University Law Center

Date Written: December 2013

Abstract

We study the effect of damage caps adopted in the 1990s and 2000s on medical malpractice claim rates and payouts. Prior studies found some evidence that caps reduce payout per claim, but mixed and weak evidence on whether caps reduce paid claim rates and payout per physician. However, most prior studies do not allow for the gradual phase‐in of damage caps, which usually apply only to lawsuits filed after the reform's effective date, or only to injuries after the effective date. Once we allow for phase‐in, we find strong evidence that damage caps reduce both claim rates and payout per claim, with a large combined impact on payout per physician. The drop in claim rates is concentrated in claims with larger payouts - the ones that we expect to be most affected by a damages cap. Stricter caps have larger effects. Some prior studies also find a large impact of tort reforms other than damage caps. Once we allow for phase‐in, we find that these other reforms have no significant impact on either claim rates or payout per claim.

Suggested Citation

Paik, Myungho and Black, Bernard S. and Hyman, David A., The Receding Tide of Medical Malpractice Litigation: Part 2—Effect of Damage Caps (December 2013). Journal of Empirical Legal Studies, Vol. 10, Issue 4, pp. 639-669, 2013, Available at SSRN: https://ssrn.com/abstract=2344522 or http://dx.doi.org/10.1111/jels.12022

Myungho Paik (Contact Author)

Hanyang University - College of Policy Science ( email )

222 Wangsimni-ro Seongdong-gu
Seoul, 04763
Korea, Republic of (South Korea)

Bernard S. Black

Northwestern University - Pritzker School of Law ( email )

375 E. Chicago Ave
Chicago, IL 60611
United States
312-503-2784 (Phone)

Northwestern University - Kellogg School of Management

2001 Sheridan Road
Evanston, IL 60208
United States
847-491-5049 (Phone)

European Corporate Governance Institute (ECGI)

Brussels
Belgium

David A. Hyman

Georgetown University Law Center ( email )

600 New Jersey Avenue, NW
Washington, DC 20001
United States

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