Initiative 4: An Amendment to Limit Attorney Contingency Fees and Non-Economic Damages in Medical Lawsuits

What will appear on the ballot?

An amendment to the Arkansas constitution providing that the practice of contracting for or charging excessive contingency fees in the course of legal representation of any person seeking damages in an action for medical injury against a health-care provider is hereby prohibited; providing that an excessive medical-injury contingency fee is greater than thirty-three and one-third percent (33 1/3%) of the amount recovered; providing that, for the purposes of calculating the amount recovered, the figure that shall be used is the net sum recovered after deducting any disbursements or costs incurred in connection with prosecution or settlement of the medical-injury claim; providing that this limitation shall apply whether the recovery is by settlement, arbitration, or judgment; providing that this limitation shall apply regardless of the age or mental capacity of the plaintiff; providing that the prohibition of excessive medical-injury fees does not apply to workers’ compensation cases; providing that the General Assembly may enact legislation which enforces this prohibition, and that it may also enact legislation that determines the relative values of time payments or periodic payments and governs the consequences and penalties for attorneys who contract for or charge excessive medical-injury contingency fees; providing that the General Assembly shall enact a measure which specifies a maximum dollar amount for a non-economic damage award in any action for medical injury against a health-care provider, but that such a measure may never be smaller than two hundred and fifty thousand dollars ($250,000); providing that the General Assembly may, after such enactment, amend it by a vote of two-thirds of each house, but that no such amendment may reduce the maximum dollar amount for a non-economic damage award in any action for medical injury against any health-care provider to less than two hundred and fifty thousand dollars ($250,000); providing that the Supreme Court shall adjust this figure for inflation or deflation on a biennial basis; and providing that this amendment does not supersede or amend the right to trial by jury.

Full Text

What is in the initiative?

  • Caps the amount any lawyer can charge a client in a case for medical injury against a health-care provider to 33 and 1/3 percent of the awarded amount.
    • Does not apply to worker’s compensation cases.
  • Allows the General Assembly to make laws regarding:
    • How periodic payments should be calculated.
    • How life expectancy or other relevant factors shall be taken into account with respect to those calculations.
    • What extent these calculations for such payments shall be required when determining excessive contingency fees.
    • The consequences and penalties for attorneys who contract for or charge excessive medical-injury contingency fees.
  • Requires the General Assembly to enact laws specifying the maximum dollar amount of non-economic damage awards (ex: pain and suffering, loss of quality of life) in a civil action for medical injury brought against  a health-care provider
    • Minimum of $250,000 per health-care provider against whom a judgement is rendered.
    • In January of every even numbered year, the State Supreme Court shall issue and adjustment to the maximum dollar amount based on current inflation or deflation.

Support For:

  • Caps will lower costs of liability insurance on nursing homes, resulting in lower costs for Medicaid.
  • Arkansas is in the top 10 worst states for medical lawsuits. A lower rate of lawsuits would lower healthcare costs and lead to Arkansas having better doctors and specialists.
  • Will keep clients from being taken advantage of by lawyers.

Arguments Against:

  • Allows the cap to be placed at $250,000 for non-economic damages, regardless of age or extent of injury.Is that the value of a life or a lifetime of suffering?
  • Takes away the ability of a jury to determine damages by creating the cap and the laws for how damages must be calculated.
  • Places a cap on accountability for those who harm their patients.
  • Takes away the freedom to negotiate your own contracts.
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