upward adjustment each year on Oct. 1, as an adjustment for inflation. The 1994 cap remained in place over
the next 10 years. By 2004, the applicable dollar cap on noneconomic damages in all personal-injury actions had risen to $650,000 by virtue of the inflation adjustment provision contained in the 1994 amendments. The applicable cap on wrongful-death claims had similarly risen to $650,000 in cases involving one wrongful-death beneficiary and to $975,000 in cases involving two or more wrongful-death beneficiaries. Thus, the cap on a combined survival and wrong- ful-death case was either $1,300,000 or $1,625,000, depending on the number of wrongful death beneficiaries. These caps applied to all causes of action for personal injury, including claims predi- cated on medical negligence.
The 2004 Special Legislative Session
In 2004, Medical Mutual Liability In-
surance Society of Maryland, the state’s largest medical-malpractice insurer, asked the Maryland Insurance Commis- sion to approve an average 41-percent increase in premiums for the following year. This request provoked a storm of activity. Physicians marched on An- napolis demanding that steps be taken to get their premiums in check. Gover- nor Robert Ehrlich set up a taskforce to look at “tort-reform options” and called for, among other “reforms,” reduced caps on medical-malpractice damage awards. Legislators set up committees, took testimony on a variety of issues, and eventually proposed competing pack- ages of legislation to deal with the “crisis” in malpractice-insurance premiums. On Dec. 20, 2004, Governor Ehrlich
issued an Executive Order calling the General Assembly into a special session to take “immediate action to ensure that the costs of medical-malpractice insurance are curtailed and that ac- cess to health care is maintained.” The special session resulted in the passage of legislation which, among other things, imposed a new and lower cap on noneconomic damages restricted to medical-malpractice victims. On Jan. 10, 2005, Governor Ehrlich vetoed the
Spring 2008
legislation. On Jan. 11, 2005, the General Assembly overrode the veto and the new legislation became law.
The New Medical
Malpractice Noneconomic Damages Cap
Under the new malpractice cap, codi-
fied at § 3-2A-09, Cts. & Jud. Proc. Art., Md. Ann. Code, persons injured or killed as a result of medical negligence, and those injured or killed as a result of other types of wrongful conduct, are treated in profoundly different ways. Any medical-negligence claim that
arises during the four-year period be- tween Jan. 1, 2005 and Dec. 31, 2008 is subject to a noneconomic damages cap of $650,000. Thereafter, the medical- malpractice cap will increase $15,000 per year beginning on Jan. 1, 2009. In other words, the annual inflation adjustment contained in §11-108 has been stayed for medical-malpractice claims for a period of four years. Non-medical, malpractice, personal-injury claims that arise during this four-year period will be subject to a cap of between $650,000 and $710,000 (depending on when during the four- year period the cause of action arises.) An even more startling difference is
apparent when considering death claims as a result of medical negligence and death claims as a result of other wrong- ful conduct. Negligence resulting in death typically gives rise to two claims, one on behalf of the decedent’s estate for his pain and suffering, and a separate wrongful-death claim by the decedent’s survivors. Under the original §11-108 cap, which continues to apply to claims based on wrongful conduct other than medical negligence, separate caps apply to the estate’s claim and to the claim of the wrongful-death beneficiaries. In contrast, §3-2A-09 provides that its “cap” applies “in the aggregate to all claims for personal injury and wrongful death arising form the same medical in- jury, regardless of the number of claims, claimants, plaintiffs, beneficiaries, or defendants.” In other words, there is now a single cap that applies to both the estate’s claim and the wrongful-death claim in medical-malpractice cases. The new statute does make provision for a
Trial Reporter
modestly enhanced cap where there is more than one wrongful-death benefi- ciary. In this event, the overall capped award in medical-negligence cases “may not exceed 125 percent” of the amount that would otherwise be allowable. §3-2A-09(b) (2) (ii).” The practical impact of all this is ob-
vious when one looks at the numbers. For a non-medical malpractice death claim arising on Jan. 1, 2005, the ap- plicable overall cap on noneconomic damages for both the estate’s claim and the wrongful-death claim would be $1,300,000, assuming only one wrong- ful-death beneficiary, and $1,625,000, assuming two or more wrongful-death beneficiaries. For a medical-malprac- tice, death claim arising on the same date, i.e., Jan. 1, 2005, the applicable cap on noneconomic damages for both the estate’s claim and the wrongful-death claim would be $650,000, assuming only one wrongful-death beneficiary, and $812,500, assuming two or more wrongful-death beneficiaries. In other words, the estate and survivors of medi- cal negligence victims are entitled to receive half the compensation due to victims of other kinds of negligence. Moreover, because of the “freeze” on the inflation adjustment contained in §3-2A-09, the disparity in treatment between victims of medical negligence and victims of other kinds of negligence has steadily increased and will continue to increase until 2009. Thus, the cap applicable to non-medical, malpractice death claims arising between Oct. 1, 2007 and Sept. 30, 2008 with two or more wrongful-death beneficiaries is $1,737,500, while the cap on the same claim sounding in medical negligence remains frozen at $812,500.
Conclusion The debate as to whether a “medical-
malpractice insurance crisis” exists, and if so, its magnitude, its causes, and its solutions, has been carried out in the nation’s Courts and legislatures over the past 20 years. Legislatures across the country have responded to the percep- tion of a “crisis” with legislative caps on damage awards in medical-negligence cases on the theory that these caps will
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