Issues - Tort Reform

The Capitol’s perpetual “tort war” that pits personal injury attorneys against insurance and business groups over the rules governing lawsuits has a new battleground.

Senate President Pro tem Darrell Steinberg has introduced a bill that would overturn one of recent legal history’s most closely watched state Supreme Court decisions, dealing with recovery of medical costs by injured parties.

Last August, in a 6-1 ruling, the Supreme Court limited how medical damages could be calculated in auto accidents and other personal injury cases. The issue in the case (Howell v. Hamilton Meats) was whether an injured person could collect the full medical bills imposed by doctors, hospitals and other medical care providers, or would be limited to the amounts actually paid by insurers, which are often pennies on the dollar.

The case, stemming from a 2005 collision in San Diego County, involved $200,000 in medical bills that were whittled down to $60,000 before payment. The trial judge decreed that only the smaller amount need be paid, while an appellate court said it should be the full amount, and the issue landed in the Supreme Court.

Steinberg’s Senate Bill 1528, introduced last Friday, would, its summary says, “require, in order to ensure the public policy of all injured persons being compensated equally, that an injured person is entitled to recover the reasonable value of medical services provided without regard to the amount actually paid…”

The measure’s sponsor, Consumer Attorneys and California, jousts each year with the Association of California Insurance Companies and business groups over the rules governing lawsuits, essentially who can sue whom and collect what damages.

Insurers say that were the Howell ruling overturned, it would cost them $3 billion a year in payouts and result in higher insurance premiums. Personal injury attorneys typically take about a third of judgments in such cases.


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