The Limitations of Legislatively Imposed Damages Caps: Proposing a Better Way to Control the Costs of Medical Malpractice

This Article considers whether state damages caps are constitutional and examines recent studies suggesting that damages caps are not achieving their intended goals. Given the mounting evidence against the effectiveness of damages caps and the questions about their constitutional validity, this Article proposes moving away from legislative caps on damages. Instead, this Article argues for a modified market model based on a combination of improved care, which would include improvements in service; better peer review; and, if necessary, legislation which would be designed to protect the confidentiality of peer review, reduce frivolous lawsuits, and regulate insurance rate increases. Part II examines federal and state legislative responses to the call for damages caps. Part III addresses the constitutional issues raised by legislatively imposed limitations on damages awards. Part IV goes beyond these issues to ask whether, even if damages caps pass constitutional muster, these legislative limits offer any real solution to the issue that is really at the heart of the debate: premium rate increases. Part V proposes a solution that combines market forces and legislative controls to regulate insurance rate increases, enhance peer review, and reduce frivolous lawsuits