Iowa Legislature Passes Caps on Non-Economic Damages in Malpractice Cases

More than a year ago, MWH reported on the Iowa Legislature’s consideration of non-economic damage caps on lawsuits involving medical malpractice and commercial truck operators involved in motor vehicle accidents. However, the 2022 legislative session ended without passing the bills. In 2023, Iowa’s Republican majority, emboldened by last November’s state election results, took another crack at passing the caps.

On February 16, 2023, Governor Kim Reynolds signed a bill imposing a $2 million cap on non-economic damages where a hospital is a defendant, and a $1 million cap on similar damages where an independent clinic is the defendant. Under the new law, economic and punitive damages remain unlimited, but pain and suffering damages, even in cases in which a patient is found to have suffered permanent loss or impairment of a bodily function, will be limited to those caps.

The legislation passed on heavily partisan lines, with Republicans hailing the new limits, which they say will make Iowa a more attractive place to practice medicine amidst widespread concerns of doctor and medical provider shortages in the state, particularly in rural areas. Those opposed to the bill cited concerns about limiting jurors’ ability to fully compensate Iowans who are significantly injured or killed in medical malpractice cases.

Still in consideration is the matter of capping damages in which a commercial truck operator’s negligence has caused a motor vehicle accident. The trucking industry has lobbied for the cap and Governor Reynolds previously proposed a $1 million limit. The Iowa Senate has voted to place non-economic caps in those situations at $2 million. In March, the Iowa House of Representatives voted to cap such types of damages at $5 million. Assuming the two chambers at the State House can work out an agreement on the final figure by the end of April when the legislative session is scheduled to end, the Governor’s office would likely pass a bill making Iowa the only state in the country that provides a hard cap on damages in which the defendant is a commercial trucking company or operator.

Under both proposals being considered, the damage limit would not apply in the event the operator was under the influence of alcohol or drugs at the time of the accident.

Proponents of the caps advocate that the limitations would help lower costs that trucking companies pay in liability insurance premiums. They note a rise in ‘nuclear verdicts’ surpassing $10 million in damages that can exceed the coverage limits that the defendant company has with their insurer, escalating the costs directly borne by the company and substantially increasing the costs of insurance rates to everyone in the industry, including small and mid-sized companies that likely do not have the deep pockets to operate profitably in such an environment. If Iowa signs this measure into law, the industry will see this as necessary relief that addresses what has been a distorted commercial field in the past decade.  Opposition to the legislation raises similar concerns as those presented in the medical malpractice case: a heavy hand of the law imposed by the legislature preventing what a jury finds is adequate compensation for an injured person involved in such accidents.

MWH will continue to monitor the evolving legislation.