By: Cristina N. Hyde, JD

On December 1, 2022, Senator Nicholas J. Sacco (D), introduced legislation that, if signed into law, would establish a cap on awards of compensatory damages and would limit attorney contingency fees in medical malpractice lawsuits.  Still in the infancy of the legislative process, the New Jersey Medical Malpractice Fees and Civil Damage Act (S3343) would align New Jersey with more than half of the states in the country that already have enacted similar tort reform.

Currently, New Jersey does not have a cap on the maximum amount permitted on the recovery for noneconomic losses, otherwise known as compensatory damages (i.e., pain, suffering, emotional distress, inconvenience, and other subjective non-monetary losses). Proponents of S3343 believe that the lack of limitations has inflated the cost of healthcare. Therefore, S3343 is an attempt to “protect New Jersey patients and improve health care providers’ well-being” by “imposing reasonable limits” on fees and damages and reducing the overall cost of healthcare within the state of New Jersey.

Key provisions of pending legislation include:

• A $250,000 cap on recovery of compensatory damages of for actions that do not involve wrongful death.
• A $500,000 cap on recovery of compensatory damages for actions involving wrongful death.
• A limitation on attorney contingency fees to 25% of the dollar amount recovered if the recovery happens pursuant to a settlement that is finalized before a civil complaint or demand for arbitration has been filed.
• A limitation on attorney contingency fees to 33% of the dollar amount recovered if the recovery occurs pursuant to a settlement that is finalized after a civil complaint or demand for arbitration has been filed.

Senate Bill No. 3343 also seeks to encourage judgments ordering money damages to be paid in whole or in part by periodic payments rather than a lump sum payment. By authorizing periodic payments, proponents of the legislation hope to provide compensation sufficient to meet the needs of an injured plaintiff and their dependents while “eliminating a potential windfall from a lump sum recovery” to persons or for purposes it was not intended should an injured plaintiff die shortly after the judgment is paid.

Not surprisingly, S3343 is opposed by those who believe it will have a chilling effect on access to good attorneys and who have raised concerns relating to the pending laws’ constitutionality.  It is likely that the road ahead for this proposed legislation will be met with a plethora of legal challenges and significant debate.

Campanella Law Office will be monitoring S3343’s journey through the legislative process and will post updates as necessary.  Meanwhile, if you have any questions regarding how this proposed legislation may affect you, your small business, or health care practice, Contact Us.