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Are There Damage Caps (Limits on Recovery) in Michigan Medical Malpractice Claims?

July 21, 2020

Most states have laws that limit or “cap” the amount of non-economic damages (i.e., pain and suffering) that a jury may award in some types of personal injury actions. Each state determines its own damages cap.  Michigan enacted strict damage caps in the 1990s as party of tort reform. As a result, it’s not uncommon for Michiganders to hear news of an injured patient in a medical malpractice case who received a massive million-dollar jury verdict—but not realize that state law limits the plaintiff’s recovery in these types of cases.

Why Do Damages Caps Exist?

Proponents of damages caps say that they’re needed to manage the high costs of doing business—costs that are ultimately passed on to the consumer—by reducing the liability of service providers. As a practical example, a doctor’s medical error can result in catastrophic injury to a patient. A jury in a medical malpractice action against the doctor may decide to award millions of dollars to the patient in non-economic damages. The doctor has medical malpractice insurance, and his or her carrier will pay the damages. However, many believe the doctor’s patients will eventually see an increase in prices as a result of that large verdict.

The reality is the insurance company doesn’t want to make less money and show a loss in its revenue because it must pay the jury award to the doctor’s patient. As a result, the insurance carrier will raise its medical malpractice insurance premiums for doctors in an effort to recoup that million-dollar payout. Doctors also don’t want make less money, so they’ll charge more to patients for their services.

Therefore, proponents of damage caps argue when seriously injured patients are compensated by jury award, it can make it more difficult for others to afford healthcare. However, if the state has a cap on the amount that the injured patient can receive in a medical malpractice lawsuit, the thought is that the insurance company and, in turn, the doctor, won’t raise their rates and charge patients more money.

In addition to managing the costs of doing business, those in favor of damage caps say that caps also discourage individuals from bringing a medical malpractice lawsuit just because they believe they might see a huge verdict. Our court system should be reserved for those who are actually injured and require compensation, they argue. And that’s why damages caps are needed, they say.

What Are Non-Economic Damages?

Typical non-economic damages can include pain and suffering, emotional anguish, damage to a person’s reputation, loss of enjoyment of activities, or worsening of prior injuries. In addition, a victim’s spouse may be able to recover a non-economic damage known as loss of consortium.

Those who are seriously injured may experience pain whenever they do an activity that other people take for granted, like pushing a cart at the grocery store, playing a round of golf, carrying a load of laundry, or making dinner. These serious injuries frequently cause an individual to no longer be able to take pleasure in the activities he or she was previously able to enjoy. These limitations can make it more difficult for a person to appreciate many regular functions in his or her life.

Are Damages Caps Unconstitutional?

There are a number of states that cap damages in certain or all personal injury claims. States laws on damages caps vary widely. Some states cap just economic damages. Some cap only non-economic damages. Some states cap both economic and non-economic damages, and some cap neither.

There have been states that have examined whether their damages cap laws are legal under the state’s constitution. Some state courts have struck down their damages caps, finding them to be unconstitutional.

Kansas is the most recent state to examine its damages caps in personal injury lawsuits. The Kansas Supreme Court recently found that that the state’s cap on damages for non-economic injuries in personal injury lawsuits is unconstitutional. The court held that capping the damages that an injured person is able to recover in a lawsuit violates an individual’s right to a jury trial.

How Does Michigan Handle Damages Caps?

Michigan caps non-economic damages in personal injury claims. And on January 30, 2020, the State of Michigan Department of Treasury announced the latest limitations on non-economic damages in medical malpractice claims. The upper limit was adjusted to a cap of $842,500; the lower cap was adjusted to a limitation of $471,800. These limits are adjusted every year. For example, in 1995, the lower limit for medical malpractice cases was only $228,825, and the upper limit was $515,759.

Michigan statutes define “non-economic loss” as “damages or loss due to pain, suffering, inconvenience, physical impairment, or physical disfigurement, loss of society and companionship, … loss of consortium, or other non-economic loss.”

The two caps on non-economic damages are called the “upper cap” and the “lower cap.” In a medical malpractice claim, the total amount of damages for non-economic loss recoverable by all plaintiffs, resulting from the negligence of defendants, can’t exceed the lower cap unless one or more of the following exceptions applies as determined by the court:

  1. The plaintiff is hemiplegic, paraplegic, or quadriplegic resulting in a total permanent functional loss of one or more limbs caused by injury to the brain or injury to the spinal cord;
  2. The plaintiff has permanently impaired cognitive capacity rendering him or her incapable of making independent, responsible life decisions and permanently incapable of independently performing the activities of normal, daily living; or
  3. There’s been permanent loss of or damage to a reproductive organ resulting in the inability to procreate.

Otherwise, the lower cap applies to all other medical malpractice cases.

What is an Example of a Damage Cap in a Michigan Medical Malpractice Case?

A female patient in Muskegon undergoes an operation to repair a uterus rupture. In the course of the operation, the surgeon makes a serious surgical error, and her uterus cannot be repaired. The woman must have an emergency hysterectomy (removal of the uterus) and can no longer have children.

In a lawsuit against the surgeon, she is awarded non-economic damages for her pain, suffering, and, physical impairment of $2 million. However, because of the “upper cap” for her permanent loss of or damage to a reproductive organ resulting in the inability to have children, she’s limited to the 2020 cap of $842,500. If she had suffered an injury not included in the three exceptions listed above, she would be restricted to the 2020 “lower cap” limit of $471,800.

Takeaway

If you’ve been seriously injured as a result of a doctor or healthcare facility’s mistake, you need to understand the types of damages you may be able to recover in a medical malpractice action—as well as the cap on non-economic damages in Michigan.

Contact us!

For a free consultation with an experienced medical malpractice attorney in Michigan, contact Buchanan Firm. We can discuss your situation if you believe you’ve been injured as the result of a physician or healthcare facility error.

The purported tort “reforms” in Michigan create unjust results and grossly inadequate recoveries.  At Buchanan Firm we immediately inform injured patients of the unfair laws in Michigan and do not hide or conceal the caps on non-economic damages.  We are patient advocates and believe in open, honest, and candid communication with every person we talk to about a potential malpractice claim.  If you or a loved one recently suffered injury or death resulting from a medical error, contact us or another experienced medical malpractice attorney right away.