Apr 13, 2010

Illinois Supreme Court Rules -- No Limits on Medical Malpractice Damages

On February 4, 2010, the Illinois Supreme Court made national news when it issued its opinion in the case of Lebron v. Gottlieb Memorial Hospital. The Court overturned as unconstitutional Illinois' medical malpractice cap on damages. Specifically, the Court found that the Illinois cap violated the "separation of powers" clause because damages determinations are to be made by the judicial branch, and not the legislative branch, of government.

The effects of this decision on physicians and hospitals are potentially enormous in scope. Previously, plaintiffs could be awarded no more than $500,000 in non-economic damages against physicians, and $1 million against hospitals. Non-economic damages are, in general, damages for pain and suffering, disability, and disfigurement. Now, this ceiling is removed and juries are allowed to award an unlimited amount of both non-economic and economic (e.g., lost wages) damages to a plaintiff in a medical malpractice suit (subject to judicial review).

Therefore, physicians are now at a much greater risk of subjecting their personal assets to satisfaction of a malpractice judgment. For example, medical malpractice insurance may have a limit on the amount it will pay on a physician's behalf in the event of a judgment. Because now there is no cap on the amount of a judgment, the physician could be left to make up the difference—however substantial that difference may be.

We have developed sophisticated asset protection structures that can enable you to protect your personal assets from creditors' claims, while still allowing you to maintain control over your assets and their administration. A key criteria to a successful asset protection structure is an early start, before any creditor issues arise. Contact us to discuss liability exposure and review opportunities to increase your asset protection, particularly in light of the Lebron decision.