Medical Liability Reform

In 2011, North Carolina voted two tort reform bills into law that had a critical impact upon the profession of medicine in the state. The NCMS advocacy team successfully defended against any erosion to the medical liability reforms during the legislative sessions since and is gearing up to continue to protect the reforms during the coming year. This is a battle that we will undoubtedly continue to face each year going forward and in the courts.

Take a moment to read about your Medical Society’s recent work to protect these medical liability reforms in the 2016 Legislative Summary. These important wins could not have been accomplished without your efforts to advocate for our profession. The session may have come to a close, but now is the time for our real work to begin – building relationships with legislators and educating ourselves on the issues that lie ahead.

Please continue your support by engaging with your legislators on the issues of importance to you, and by making a donation to the NCMS PAC.

Summary of 2011 Tort Reforms

Senate Bill 33 – Medical Liability Reforms

Until 2011, the North Carolina General Assembly had not passed significant medical liability reform legislation since 1995, when it enacted the pre-litigation expert review requirement and set standards for experts in medical malpractice cases. Senate Bill 33 ended a long dry spell. The bill represents a significant improvement in the fairness of North Carolina’s medical liability system. As such, it drew fierce opposition from the plaintiffs’ bar and from those public officials who have traditionally opposed reform and are still in office. Unrelenting support from legislative leaders in the Senate and House, combined with aggressive lobbying by a strong coalition of medical and health interests ultimately lead to passage of a landmark liability reform bill.

When it reached Governor Perdue’s desk, she vetoed it. The measure passed the House with only 62 votes. The State constitution requires 72 votes to override a veto if all members are voting.

Medical liability reform, once again, appeared to be dead on arrival. Governor Perdue asked for changes to the cap on noneconomic damages (discussed below) that would have exempted many cases from the cap altogether.

The NCMS physician leadership chose to fight for meaningful reform rather than water down the cap. The NC General Assembly later agreed, overriding the Governor’s veto and passing medical liability reform into law.

Senate Bill 33 stipulated the following:

  1. Ensures that the right to appeal is preserved in cases of large jury awards by requiring the court to set appeal bonds based on consideration of relevant factors.
  2. Addresses the classic jury error of confusing bad outcomes with medical negligence by requiring juries to first determine if the physician was negligent before hearing evidence of the severity of harm. Cuts down on frivolous lawsuits by requiring the pre-litigation reviewing expert to review all of the reasonably available medical records. This change is effective October 1, 2011, and applies to actions commenced on or after that date.
  3. Strengthens expert witness requirements on administrative and non-clinical issues.
  4. Broadens scope of statutory protections applicable to malpractice cases by adding adult care homes to the definition of “health care provider.” Also provides that “medical malpractice” includes civil actions that allege a breach of administrative or corporate duties by hospitals, nursing homes, or adult care homes (such as credentialing, monitoring, and supervision of staff) if the claims arise out of the same facts or circumstances as a claim against a health professional.
  5. Controls unnecessary medical testing by requiring that any liability claim arising from treatment of an emergency medical condition be proved by “clear and convincing evidence.”
  6. Tackles excessive jury awards by capping noneconomic damages. Also requires juries to specify what amount, if any, is awarded for noneconomic damages, and requires the court to instruct the jury on the definition of noneconomic damages (i.e., damages to compensate for pain, suffering, emotional distress, loss of consortium, inconvenience, and any other nonpecuniary compensatory damage; does not include punitive damages).
  7. Restores fairness to claims of medical negligence made on behalf of minors by requiring such claims to be brought in a timelier manner.

For more information and the latest news on Medical Liability Reform, visit the NCMS blog.

HB 542 – Tort Reform

As part of a larger effort to reform the state’s tort system, the General Assembly enacted House Bill 542, which included changes important to medicine. When a lawsuit involves personal injury, the cost of medical care is almost always an issue. Injured parties may be compensated for the cost of medical care they receive. To prove those costs, plaintiff’s lawyers have been permitted to introduce documentation of the full charges billed by health care providers, and to have the jury compute damages based on that information. House Bill 542 shifted the jury’s focus to the amounts actually paid or required to be paid to satisfy medical bills, which are often ½ or less of the full charges. This change, strongly supported by the NCMS, is expected to have a significant impact on the amounts paid for any civil claims in which medical costs are an issue, including medical malpractice.

Other changes included in HB 542:

  1. The standards for expert testimony addressing scientific, technical or other specialized knowledge are strengthened in the North Carolina Rules of Evidence to incorporate the Daubert standard, which is already in effect in about half the states and the federal system. Under HB 542, such experts may only testify if: 1) the testimony is based upon sufficient facts or data; 2) the testimony is the product of reliable principles and methods; and 3) the witness has applied the principles and methods reliably to the facts of the case.
  2. In small cases where there is an unwarranted refusal by the defendant to negotiate or settle a claim, and the plaintiff ultimately is awarded more than the defendants best offer made 90 days or more before trial, the judge may impose the plaintiff’s attorneys’ fees on the defendant as “court costs.” House Bill 542 limited the use of this rule to cases at or below $20,000 in damages (previously $10,000), imposes the 90 day look-back requirement (previously not addressed), and caps plaintiff’s attorneys’ fees in these situations at $10,000 (previously unlimited).
  3. Those who possess land (owners, lessees, occupants) do not owe a duty of care to a trespasser and are not subject to liability for injury to a trespasser. There are exceptions for intentional harm, harms to trespassing children (under 14), and harm to imperiled trespassers discovered by the possessor of the land. This provision applies to wrongful conduct occurring on or after October 1, 2011.All of the above changes went into effect on October 1, 2011.

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