State Senate approves $350,000 cap on damages

Tuesday, July 30, 2002 | 10:53 a.m.

CARSON CITY -- The state Senate today unanimously approved a key section of the medical malpractice bill to impose a cap of $350,000 on damages to a victim for his or her pain or suffering.

The vote came one day after the opening of the special session of the Legislature. On Monday, legislative leaders along with representatives for lawyers and doctors agreed on a compromise bill to help cure the crisis in Southern Nevada.

The Senate was going through the bill's provisions one at a time, voting on each part. The caps have been the most controversial part of the issue.

Insurance rates for physicians have skyrocketed and many have threatened to leave the state. Jim Wadhams, a Las Vegas lawyer representing the American Insurance Association, told the Senate that the imposition of caps on non-economic damages "will have a positive impact on insurance rates."

But he declined to predict how much lower the rates might be. He said rates are based on experience and it will take time to see what happens under this proposed law.

But Senate Majority Leader Bill Raggio, R-Reno, told Wadhams the Senate would like to see "some immediate reduction given to the excessive premiums" that are being charged to physicians in Clark County.

Raggio said the Legislature doesn't want to pass this legislation and find out it has little impact. He said the Senate is sending a "strong message" to the insurance industry that it wants to see some relief.

Sen. Ray Shaffer, D-North Las Vegas, said there is a rumor that Gov. Kenny Guinn will order state Insurance Commissioner Alice Molasky-Arman to immediately reduce rates by 25 percent.

Wadhams replied, "Rolling back rates is not appropriate." He said the insurance commissioner would have to make a finding that the rates are excessive.

Sen. Bob Coffin, D-Las Vegas, said the Legislature in 1989 passed a law ordering a 20 percent cut in auto insurance rates. And the Nevada Supreme Court ruled that law was unconstitutional. Coffin, an insurance broker who does not deal in medical malpractice insurance, said, "you won't see an immediate drop" in policy premiums.

"The companies base their rates on experience. But there is light at the end of the tunnel" for lower rates in the future, he said.

He said this cap on malpractice awards will make it easier to recruit new doctors to Nevada.

John Cotton, an attorney representing the doctors, said many physicians in Southern Nevada are willing to "tough it out in the short term" if they can see reduced rates in the future and the availability of insurance.

Cotton said he has been told that the quasi state-operated insurance company will lower rates immediately after the bill is passed.

The vote by the Senate was only on the section of the bill setting the caps on non-economic damages. There are 10 more issues to be considered.

There is no limit on "economic damages" that includes reimbursement for the cost of medical treatment, care and loss of earnings by the injured party.