MICRA, damages, attorney fees, and judgment structure

California's Medical Injury Compensation Reform Act is a collection of rules affecting covered professional negligence actions. It is not a finding that negligence occurred, a single universal limit on every form of recovery, or a guarantee that insurance will pay a particular amount. Classification of the claim and defendant matters.

Economic and noneconomic loss

Economic damages can include supported medical and care expenses, lost earnings, and other compensable financial loss. Future losses require evidence about their likelihood, duration, amount, and applicable valuation. Civil Code section 3333.2's noneconomic limits do not impose a general dollar cap on otherwise recoverable economic damages.

Noneconomic damages include pain, suffering, inconvenience, physical impairment, disfigurement, and other nonpecuniary loss. AB 35 changed the amounts and structure applicable to covered actions filed, or arbitrations demanded, on or after January 1, 2023.

The 2026 amounts and the date that controls

The statute began in 2023 with $350,000 and $500,000 respectively. It adds $40,000 and $50,000 annually through 2033, followed by annual two-percent increases beginning in 2034. Section 3333.2(g) directs use of the amount in effect at judgment, arbitration award, or settlement. A case filed in an earlier eligible year does not necessarily use that year's dollar figure. Older actions require analysis of the applicable version and transition provisions.

Why “three caps” is an incomplete description

The statute organizes covered defendants into categories. It provides a collective limit for qualifying health care providers and a collective limit for qualifying health care institutions. A further category can apply to qualifying unaffiliated providers or institutions where the statute's separate and independent negligence and institutional or medical-transport requirements are satisfied.

The third category is not created merely by adding another defendant or alleging another mistake. The statutory definition of “unaffiliated,” the relationships at the time of the negligence, the location or transport connection, and the distinct acts must be examined. Employment, contractual, ownership, joint-venture, and health-system relationships can matter. The statutory definitions of provider and institution also matter; the caption's labels do not decide classification.

Each provider or institution can be held responsible within only one of the statutory categories. Multiple physicians, facilities, theories, or heirs do not automatically multiply the limits. Likewise, adding both survival and wrongful-death labels does not establish additional categories by itself. Counsel should map defendants, affiliations, alleged acts, and damages to the actual statutory text before estimating a recovery.

Collateral benefits and liens

Civil Code section 3333.1 permits a defendant in a covered professional negligence action to introduce specified collateral-benefit evidence. If that evidence is introduced, the plaintiff can introduce amounts paid or contributed to secure the benefits. The statute also addresses recovery and subrogation by a source whose benefits are introduced under its terms.

This is not a universal rule that every insurance payment is deducted or every lien disappears. The source of the benefit, statutory conditions, federal preemption, Medicare obligations, ERISA issues, and other applicable reimbursement law can change the analysis. A settlement needs a source-specific lien and reimbursement assessment.

Attorney contingency fees

Business and Professions Code section 6146 provides the current covered fee structure: 25 percent where the settlement agreement and all releases are executed by all parties before the civil complaint or arbitration demand is filed, and 33 percent for covered recoveries after filing. If the action is actually tried in court or arbitrated, counsel may seek a higher fee through the statutory motion process and must establish good cause. A higher fee is not automatic merely because the complaint was filed or the case required substantial work.

The statute defines the recovery used for the calculation and addresses costs and disbursements. Medical care costs and counsel's office overhead are not simply deductible litigation costs for this purpose. Periodic-payment judgments have a specific valuation rule. The fee agreement, governing statutory version, recoverable costs, and any other applicable fee regime should be evaluated before calculating a client's net recovery.

Periodic payments: the current threshold is $250,000

Code of Civil Procedure section 667.7 provides for periodic payment of future damages, at either party's request, where the statutory conditions are met and the award of future damages equals or exceeds $250,000. Older sources referring to a $50,000 threshold should not be used as a statement of current law.

Periodic payment affects judgment structure, security, payment intervals, and the consequences of the judgment creditor's death. Future lost earnings receive special treatment; it is inaccurate to say that every future payment necessarily stops at death. A proposed structure should identify the covered future losses, funding, security, beneficiaries where applicable, and the statutory consequences of default.

Punitive damages require more than negligence

Civil Code section 3294 requires the applicable clear-and-convincing showing of oppression, fraud, or malice. A serious error or a large compensatory injury does not by itself satisfy that standard.

For punitive damages arising from professional negligence of a health care provider, Code of Civil Procedure section 425.13 generally requires court permission before the claim is included. The motion must be supported by affidavits establishing a substantial probability of prevailing on the punitive claim. The statute imposes an early deadline: within two years after the complaint or initial pleading is filed, or at least nine months before the date first set for trial, whichever is earlier. The governing claim classification and any applicable exceptions should be assessed before pleading or moving.

Sources

• Civil Code § 3333.2 and official entry, as amended by AB 35, Statutes 2022, chapter 17.
• Civil Code § 3333.1.
• Business and Professions Code § 6146.
• Code of Civil Procedure § 667.7 and § 425.13; Civil Code § 3294, official entry.