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State Supreme Court restores cap on damages

In a highly anticipated decision with significant potential ramifications for Wisconsin’s medical liability environment, the Wisconsin Supreme Court yesterday restored Wisconsin’s cap on noneconomic damages in medical liability actions.

The Court’s 5-2 decision reversed an earlier decision by the Court of Appeals and held that Wisconsin’s $750,000 cap on noneconomic damages is constitutional, both as a whole and as applied to the particular facts of that case, Mayo v. Wisconsin Injured Patients and Families Compensation Fund (IPFCF).

“We are very pleased with today’s decision,” said Wisconsin Medical Society (Society) President Molli Rolli, MD yesterday in this press release. “The Court clearly understands the importance of the cap to our state’s unique and comprehensive medical liability system—a system that provides unparalleled benefits to both patients and physicians.”

Under Wisconsin law there is no limit on economic damages—such as medical expenses and lost wages—recoverable in a medical liability case. However, state law limits noneconomic damages, which include pain and suffering and loss of companionship—to $750,000.

This cap is part of Wisconsin’s comprehensive medical liability system, which also includes mandatory insurance coverage and participation in the IPFCF. Because the IPFCF pays claims that exceed a physician’s primary insurance limits, this system guarantees Wisconsin patients the ability to recover unlimited economic damages awarded by a jury as well as noneconomic damages up to $750,000—unlike other states where a patient’s ability to recover damages is limited to the amount of insurance a physician or hospital chooses to carry.

In Mayo, the plaintiff was awarded $25.3 million in damages by a jury, including $16.5 million in noneconomic damages. A Milwaukee county trial court ruled that while the cap is not unconstitutional as a whole, it would be unconstitutional to apply the cap to such a large award in this case. In a July 5, 2017 decision, the Wisconsin Court of Appeals struck down the cap as a whole, finding that it violated patients’ due process rights by preventing those with noneconomic damages in excess of the cap from receiving their full award. The IPFCF petitioned the state’s top court to review and reverse that decision, but Wisconsin has been without a cap since last July.

In Wednesday’s decision, the Court also overruled its 2005 decision in Ferdon v. IPFCF, which had struck down the previous cap on noneconomic damages.

The Society has been a strong and vocal proponent of the cap, including filing three separate amicus (“friend of the court”) briefs—one with the Court of Appeals and two with the state Supreme Court—in this case. Filed jointly with the American Medical Association (AMA) Litigation Center, the briefs have consistently articulated the important benefits of the cap as part of Wisconsin’s comprehensive medical liability system. In the second brief filed with the Supreme Court, the Society and AMA specifically addressed a longstanding misconception that the cap benefits physicians at the expense of patients.

“The cap…is the lynchpin that allows [Wisconsin] to guarantee recovery for all patients injured by medical negligence of all economic damages regardless of amount plus up to $750,000 in noneconomic damages. [Society and AMA] members are proud to support, financially and through their advocacy, the enhanced protections for their patients provided by this system,” the brief stated.

“We look forward to the stability the Court’s decision will provide,” said Society CEO Bud Chumbley, MD. “From successfully suing the state a decade ago following its raid on the IPFCF to our continued vigilance regarding the cap, safeguarding Wisconsin’s liability environment has been and will continue to be a top priority of the Society—for our patients and our profession.

“It’s one of the many things we focus on every day on behalf of physicians and the systems and clinics in which they work to ensure Wisconsin remains one of the best states in terms of the quality of care we provide and the unparalleled protections we offer patients,” he added.

For more information regarding this case or Wisconsin’s medical liability system contact Society General Counsel John Rather, JD.

Back to June 28, 2018 Medigram