Damage Caps and Civil Litigation : An Empirical Study of Medical Malpractice Litigation in the South

This article looks at the effect that damage caps have on plaintiffs' recovery in medical malpractice litigation, using a unique data set of litigation in the South from 1987 to 1999. During this time, Alabama underwent both the implementation and nullification of damage-cap laws; neighboring states did not undergo any significant legal changes. The product of a difference-in-difference approach, the results reveal that the average relative recovery by Alabama plaintiffs decreased by roughly $20,000 after the Alabama legislature enacted damage caps and increased by roughly double that amount after the Alabama Supreme Court ruled them unconstitutional