By Anna Bamonte Torrance, Esq.
The medical professional liability crisis, with its spiraling liability insurance costs and exorbitant jury verdicts, has sparked a renewed and vigorous effort to demand legislative action on tort reform. The medical profession has faced similar liability crisis in the past. As a consequence meaningful tort reform victories were achieved in a number of state legislatures.
In Pennsylvania there have been and continue to be obstacles to the enactment of tort reform. The law in Pennsylvania presently provides little guidance and wide latitude to juries in determining damage awards. Reform is urgently needed to assure fairness and predictability not only to civil damage awards but also medical malpractice liability laws generally.
In her recent address to the state legislature, Pennsylvania Medical Society President Carol Rose, M.D., quoted a statistic from the National Practitioner’s Data Bank that the aggregate judgments and settlements paid by Pennsylvania physicians and other health care practitioners was second only to the State of New York, nationally. Speaking on behalf of the Pennsylvania Medical Society, Dr. Rose urged the state legislature to enact legislation to provide relief from rapidly rising professional liability insurance costs, address needed changes in the CAT Fund and adopt significant tort reforms. Proposed liability reforms include creating a collateral source rule, creating a voluntary arbitration system, instituting an expert witness rule, clarifying the existing law on informed consent, enacting a constitutional amendment to remove the cap on non-economic damages. There is an effort to institute changes in the Pennsylvania Rules of Civil Procedure and Evidence, such as adopting provisions to discourage frivolous lawsuits, require early expert review in medical malpractice cases, limit the discovery rule to one year, eliminate delay damages, and reduce awards for future damages to present worth.
This recent crisis is reminiscent of the medical malpractice crisis of the early 1970s where the medical profession experienced dramatic increases and insurance costs. In response there were threats of massive losses in health services and work slow-downs by health professionals, especially those experiencing the most severe premium increases. The crisis of the 1970s lead to the enactment of state legislation, beginning in California, to restrict to some degree liability under medical malpractice suits. Such early state measures included caps on the amount of non-economic damages to be recovered, the establishment of non-judicial screening panels, restrictions on attorneys’ fees collected by lawyers representing plaintiffs and restrictions on punitive damages.
At various times in the 1980s and 1990s there were efforts made in Pennsylvania to push through legislation for specific tort reforms. In 1996, House Bill 2122, initially proposed by the Pennsylvania Medical Society, incorporated important reform measures such as caps on punitive damage awards, compulsory screening of claims, limits on contingent fee compensation, and the establishment of pre-treatment arbitration agreements. A similar bill had been passed in the State House in 1988 but died in the Senate. House Bill 2122 was inserted into Senate Bill 790. The bill passed in both the State House and Senate to become Act 135, only to have many of its provisions subsequently suspended by the Pennsylvania Supreme Court.
Pennsylvania is one of the only states in the nation that has failed to enact comprehensive legislation restricting liability in medical negligence suits. One of the obstacles has been the Pennsylvania Constitution. Constitutional attacks on medical malpractice reform legislation have been successful in Pennsylvania. The Pennsylvania Constitution, for example, has a textual provision which specifically limits legislative restrictions on damages recoverable in tort. The Pennsylvania Supreme Court has ruled, in Mattos v. Thompson, that pre-trial screening panels are unconstitutional in Pennsylvania. The Court in Mattos determined that the delay in the pre-screening panel requirement violated an individual’s right to a trial by jury. Restrictions in Pennsylvania on attorneys’ fees in malpractice actions have also been invalidated in Heller v. Frankston.
In other jurisdictions as well, state courts have rendered tort reform legislation invalid. In Ohio, progressive tort reforms were enacted only to be declared unconstitutional by the Ohio Supreme Court. The Illinois Supreme Court struck down that state’s 1995 Omnibus Tort Reform Act. The Act, which abolished joint and several liability, was deemed by the Court to be in violation of the Illinois Constitution. The Wall Street Journal estimated that, between 1988 and 1989, more than 73 tort-reform laws were invalidated by state courts.
Pennsylvania is one of the few states that has failed to enact meaningful tort reform legislation. With respect to punitive damages, there are presently 15 states that place limits on the amount of punitive damages that can be awarded. There are seven states that, either by statute or common law, prohibit punitive damages altogether. In Pennsylvania, it is difficult to have punitive damage claims dismissed in a malpractice case, whether through preliminary objections filed on behalf of a defendant in response to the complaint or through a summary judgment motion filed after evidence has been produced in the case. Often the determination of punitive damage liability is left for the jury. A jury is instructed by the Judge at the end of a trial that, if the conduct of a defendant was outrageous, punitive damages may be awarded. A person’s conduct is outrageous when he acts with a bad motive or with reckless indifference to the interest of others. Juries, however, have little guidance in how to assess such damages and courts are reluctant to interfere with the province of the jury even where the award is excessive.
In 1996 an amendment to the Pennsylvania Health Care Services Malpractice Act imposed a limit on punitive damages against a physician, in cases where intentional conduct has not been alleged, to 200 percent of the compensatory damages awarded. The statute further provides that punitive damages, when awarded, shall not be less than $100,000, unless a lower verdict amount is returned by the jury. Many of the 1996 amendments to the Act unfortunately have been suspended by the Pennsylvania Supreme Court in accordance with Article Five, Section 1(c) of the Pennsylvania Constitution.
The jury nevertheless retains great latitude in its ability to assess punitive damages. The excessiveness of punitive damages is not ground for reversal or for a new trial unless it clearly appears that the amount awarded resulted from caprice, prejudice, partiality, corruption or some other improper influence.
There have been unsuccessful efforts to date to repeal the joint and several liability rule in Pennsylvania. Currently under Pennsylvania law, a person who is found to be one percent liable or responsible to a plaintiff can be required to pay 100 percent of the damages claimed. Similarly, if one defendant settles with a plaintiff prior to trial and the subsequent trial allocates damages to that defendant in excess of the settlement amount, the remaining defendants may be liable for the difference. There is an effort to change the law so that each defendant would only be required to pay his or her proportionate share of the plaintiff’s loss. Presently, 34 states have either abolished or modified the rule of joint and several liability. Four states have never applied the doctrine of joint and several liability.
There is a concerted effort to enact a constitutional amendment to remove the state’s prohibition against caps on non-economic damages. Non-economic damages include compensation for losses such as pain and suffering, emotional distress and loss of consortium/companionship. Not unlike punitive damages, it is difficult for juries to make a determination as to how to value these losses. There are no fixed standards or guidelines to be used to determine what would be reasonable compensation for non-economic damages, such as pain and suffering. The jury must make the determination and neither the judge nor the attorneys is permitted to suggest an amount of damages to the jury.
Likewise, there is no exact measurement to be used in determining reasonable compensation for loss of consortium. Though awards for non-economic damages can be excessive, the jury is given wide latitude in fashioning courts verdict. Presently, 16 states have legislation that places limits on non-economic damages. In California and Florida, for example, non-economic damages in medical malpractice actions are limited to $250,000. In Virginia and Indiana, the total amount of compensatory damages recoverable in medical malpractice and medical liability actions are limited to one million dollars and $750,000, respectively.
In the face of this current medical malpractice crisis it is imperative that efforts to enact meaningful tort reform continue. This is not the first time Pennsylvania has encountered such crisis, and yet the efforts to address this issue over the past few decades have not produced the results enjoyed in many other states. We must now follow their lead and successfully combat the constitutional, judicial, and special interest obstacles in the pursuit of serious tort reform legislation.
Anna Bamonte Torrance, Esq., is an attorney with Houston Harbaugh and specializes in health law.