Governor Signs AB 35

Governor Newsom signed AB 35 (Reyes) this week. You may view the full press release below. 

Monday, May 23, 2022
Governor’s Press Office: (916) 445-4571
 Governor Newsom Signs Legislation to Modernize California’s Medical Malpractice System
SACRAMENTO – Governor Gavin Newsom today signed AB 35, legislation to modernize the system for awarding damages in medical malpractice cases in California. The legislation, put forth by Assembly Majority Leader Eloise Gómez Reyes and State Senator Tom Umberg, was supported by consumer groups, trial attorneys, health care insurers, and health care providers – marking the end to one of the longest running political battles in California politics. 
The measure is co-sponsored by the Consumer Attorneys of California and Californians Allied for Patient Protection. It makes two significant changes to the Medical Injury Compensation Reform Act (MICRA) by restructuring MICRA’s limit on attorney fees and raising MICRA’s cap on noneconomic damages. 
“After decades of negotiations, legislators, patient groups, and medical professionals have reached a consensus that protects patients and the stability of our health care system,” said Governor Newsom.

Governor Newsom signs MICRA modernization legislation

Existing law places limitations on the contingency fee an attorney can contract for or collect. The current system ties the limits to the amount recovered. An attorney can collect 40 percent of the first $50,000 recovered, 33 percent of the next $50,000, 25 percent of the next $500,000, and 15 percent of anything that exceeds $600,000. This legislation instead ties tiered fee limits to the stage of the representation at which the amount is recovered.  
Additionally, this legislation increases the existing $250,000 cap on non-economic damages and provides for future increases to account for inflation. The legislation establishes two separate caps, depending on whether a wrongful death claim is involved. In a wrongful death case, the cap increases to $500,000. Each January 1st thereafter, this cap increases by $50,000 until it reaches $1 million. If the medical malpractice case does not involve wrongful death, the cap starts at $350,000, and increases each year by $40,000 until it reaches $750,000.

“I’m proud to have worked together with all stakeholders to get this done. AB 35 provides a better system for both providers and patients, creating a fair process that will have a real impact on Californians for decades to come,” said Assembly Majority Leader Eloise Gómez Reyes.
“With today’s signing of AB 35, we have achieved what few thought was possible. This historic moment happened because the two sides of the ballot measure campaign put differences aside, found common ground, and recognized a rare opportunity to protect both our health care delivery system and the rights of injured patients. We are immensely grateful to the Legislature and Governor Newsom for helping to codify this landmark agreement in law. California’s new modernized MICRA statutes will provide predictability and affordability of medical liability insurance rates for decades to come, while protecting existing safeguards against skyrocketing health care costs. The modernized law will also bring greater accountability, patient safety and trust by making it possible for physicians and patients to have a full and open conversation after an unforeseen outcome. CMA is proud to have been part of this landmark achievement for the benefit of all Californians. We look forward to a new era of long-term stability around MICRA that will allow California’s physician and provider communities to focus on other ways to improve access to care and public health for all Californians,” said California Medical Association President Robert E. Wailes, M.D. 
“Injured patients deserve to be fairly compensated when their rights have been violated, and we commend the leadership of Governor Newsom to help get this done. Injured patients and their families are better off under the modified MICRA, and we look forward to continuing to serve in the best interest of our clients,” said Consumer Attorneys of California President Craig M. Peters.
For full text of the bill, visit: http://leginfo.legislature.ca.gov.

Frivolous Lawsuits?

We got a question this week about the extent to which AB 35 does / does not impact MICRA’sprovisions intended to eliminate frivolous lawsuits. According to the California Medical Association, the relevant provisions remain, including: 

  • The option for parties to agree to binding arbitration rather than litigation
  • The required 90-day advance notice of a claim
  • The one-year statute of limitations
  • Judicial discretion to throw out frivolous lawsuits*
  • Limits on qualifications of who can be considered an expert witness against a health care provider

*This is based on the discretion that California law gives judges generally to dismiss a lawsuit as meritless rather than a particular provision of MICRA.

CMA goes on to state that the ballot initiative would have created a ‘certificate of merit’ process for plaintiff’s attorneys that judges could not investigate or deem invalid for being false, but still would have given the lawsuit a designation of having merit. Since the ‘certificate of merit’ is not included in AB 35, judicial discretion will continue.

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