'The Juice Simply Isn't Worth the Squeeze in Those Cases Anymore:' Damage Caps, 'Hidden Victims,' and the Declining Interest in Medical Malpractice Cases

Abstract

This paper empirically investigates two overlapping propositions: that plaintiffs' lawyers will stop handling certain clients in medical malpractice cases in the face of caps on non-economic damages; and/or that plaintiffs' lawyers, particularly those who specialize in medical malpractice, will handle fewer malpractice cases generally. Relying primarily on material from in-depth interviews conducted with Texas plaintiffs' lawyers after Texas enacted a $250,000 cap on non-economic damages in 2003 and from a mail survey of Texas plaintiffs' lawyers conducted in 2006, the article shows there is strong evidence for both propositions. In doing so, the findings provide an excellent illustration of the theoretical idea of plaintiffs' lawyers as relatively rational actors who are constantly trying to adjust their practices - their businesses - to changes in their working environment and that those adjustments can have wide-ranging consequences. Understanding this is crucial for assessing the effects of tort reform. The findings show how tort reform - here a specific change in the formal law - affects the practices of plaintiffs' lawyers by limiting damages to a degree that significantly alters the incentive structure that lies at the heart of the contingency fee system. If the damage recovery potential is limited too severely in light of the costs and risks for a particular type of case, plaintiffs' lawyers may well avoid those cases, thereby diminishing meaningful access to the rights the law provides.