House Proposal on Tort Reform is Big, Bold

The North Carolina House of Representatives is now considering major reforms for the tort system, some specifically targeting medical malpractice litigation. No bill has been introduced yet, but a draft was presented at this week’s meeting of the House Select Committee on Tort Reform. Here are some of the highlights:

Reforms Applicable to Civil Actions Generally

  • Actual Medical Costs. Juries will hear, for the first time, about actual medical costs. Now, juries only hear about full charges and base their awards for medical costs on those numbers. This provision would make a significant difference in the cost of all types of litigation. Actual costs are typically 1/3 to 1/2 of billed charges.
  • Appeal Bond Reform. Anyone appealing a large jury award is required by law to purchase a bond for the full amount of the award. This protects the plaintiff’s right to recover if the appeal fails. Appeals of large jury awards can be almost impossible, though, if the mandatory bond is not available or is too expensive. The House proposal would allow the court to set a more modest bond based on relevant factors such as the amount of the judgment, the available insurance, and the net worth of the defendant.
  • Collateral Source Reform. Juries will hear, for the first time, about other sources of payment available to the plaintiff for losses claimed in a lawsuit.
  • Bifurcation of Trials. Establishing liability in negligence cases usually involves showing that a.) the defendant was negligent, and that b.) the negligence caused harm. Jurors sometimes confuse the two, and interpret evidence of harm as evidence of negligence. In medical malpractice cases, this leads to the classic error equating bad outcomes with negligence. The House proposal would permit separate trials of these two issues, leading to more accurate jury decision making.
  • Punitive Damages Distribution. Plaintiffs will no longer get to keep punitive damages awards over $75,000. In those cases, 25% of the amount over $75,000 would go to the plaintiff, and 75% would go to local schools. Punitive damages were capped by the General Assembly in 1995 at the greater of $250,000 or three times compensatory damages.

Reforms Applicable to Medical Malpractice Actions Only

  • Rule 9(j) Improvements. Medical experts reviewing medical care for potential malpractice claims would be specifically required to review all of the reasonably available medical records pertaining to the alleged injury.
  • Definition of a Medical Malpractice Action. The definition of a medical malpractice action would be broadened to include additional professionals and providers, including hospitals, nursing homes, and other institutional providers.
  • Emergency Care. Limited immunity would be provided for medical care providers in certain medical emergencies. Providers would be liable if the trier of fact (generally, a jury) finds that the provider’s deviation from the standard of care constituted gross negligence.
  • Cap on Noneconomic Damages. Noneconomic damages would be capped at $250,000, indexed to inflation.
  • Periodic Payments. Large awards of future damages (i.e., $200,000 or more) would be paid on a schedule. The payments would end upon death of the plaintiff, with exceptions for amounts representing loss of future earnings or loss of future household services.
  • Expert Witness Reports. Experts would be required to provide a signed report containing a complete statement of their opinion(s), the basis for those opinions, the information considered in forming the opinions, qualifications of the witness, publications list, compensation arrangement for their testimony, and a list of other cases in which the expert testified during the past 4 years. Direct testimony by the expert would be limited to the fair scope of the report.

Reforms Applicable to Product Liability Actions Only

  • Regulatory Compliance Defense. The House proposal would create a defense for manufacturers and sellers of products regulated by the government, provided the product alleged to have caused harm was designed, manufactured, labeled and sold in accordance with the terms of its government approval; or the product (or actions forming the basis of the claim) was in compliance with an applicable statute, rule, order, or agency action.

There are many other provisions in the House proposal that are not directly related to medical malpractice actions. The House is expected to continue its committee discussions and further develop this proposal. The NCMS will continue to lobby this issue and keep its members and other interested groups informed of developments.


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