California limits the amount of money an attorney can receive when successfully representing an injured patient in a medical malpractice case. These rules underwent a significant change in 2022, when lawmakers updated the state's Medical Injury Compensation Reform Act (MICRA).
This article look at the current state of California’s caps on attorney fee agreements in medical malpractice cases, and what injured patients need to know before hiring a lawyer.
What Is a Contingency Fee In a Medical Malpractice Case?
In almost all attorney-client relationships where a medical malpractice lawyer agrees to represent an injured patient, the lawyer takes the case under a contingency fee agreement.
In this kind of arrangement, the fee for the lawyer's services comes as a percentage of any money the patient receives, whether by:
- a settlement with the health care provider's liability insurance company
- a court verdict, or
- an arbitration award.
Depending on the contract and the state's laws, the attorney's contingency fee percentage might be:
- fixed (at 33 percent, for example) throughout the course of the case, or
- based on a "sliding scale," so that the attorney's percentage increases as the patient's case passes certain points.
Contingency Fee Percentages are Capped in California Medical Malpractice Cases
Since 2022, California law has said that in any lawsuit alleging that a health care provider’s professional negligence resulted in injury to a patient (which means the vast majority of medical malpractice claims), an attorney’s fee for services cannot exceed:
-
25 percent of the amount recovered if a settlement agreement is reached before a civil lawsuit is filed, or -
33 percent of the amount recovered after a civil lawsuit has been filed.
"Recovered" means the net amount that the client received in the case after deducting costs incurred in connection with the case (not including the client's medical expenses or the attorney's overhead costs).
How Do California's Attorney Fee Rules Apply to Out-of-Court Settlements and Court Judgments?
The question of whether the case was resolved via settlement or court verdict isn't relevant to the applicability of one cap or another. The key is whether the case has proceeded to court. Once a medical malpractice lawsuit has been filed, the 33 percent cap applies equally to any kind of resolution to the medical malpractice lawsuit, whether:
- the case is resolved via settlement (whether informally, through mediation, or through a court-ordered settlement process), or
- the plaintiff is awarded a favorable judgment after a civil trial.
What Attorney Fee Cap Applies to Medical Malpractice Arbitration In California?
In some situations, an injured patient might not have the option of filing a lawsuit in court. As an example, Kaiser Permanente, one of the state's biggest health care networks, requires its California members to participate in arbitration if they want to receive compensation for harm caused by a Kaiser provider's medical treatment error. The "neutral, independent" Office of the Independent Administrator hears arbitration disputes between Kaiser and its California members.
Whether an incident of potential malpractice involved Kaiser or some other care provider, an injured patient usually gets the arbitration process started by filing a "demand for arbitration," often with the assistance of a lawyer. The attorney fee caps we set out above apply to the arbitration scenario as well. Specifically:
- the 25 percent limit applies to any settlement reached before a demand for arbitration is filed, and
- the 33 percent cap applies to any successful resolution that occurs after the demand for arbitration has been filed.
Attorney-Client Contract Rules In California Medical Malpractice Cases
Besides setting a cap on attorney fee amounts, California law also requires a medical malpractice attorney to provide the plaintiff with a duplicate copy of their contingency fee agreement, signed by both the attorney and the client. This contract must include, among other details:
- the percentage contingency fee that the attorney and client have agreed on
- an explanation of how disbursements and costs will affect the contingency fee and the client's share
- a statement regarding when, and how much, the client could be required to pay for related matters that arise out of the attorney-client relationship (matters not covered by the contingency fee contract), and
- a statement that the rates in California Business & Professions Code section 6146 (as detailed above) are the maximum limits for contingency fees in medical malpractice cases, and that the attorney and client are free to negotiate a lower rate.
Next Steps
The attorney fee limits we've covered here are just a small piece of the legal puzzle for injured patients wanting to understand their legal rights. Learn more about medical malpractice laws and lawsuit-filing requirements in California.
If you're thinking about taking legal action over harm caused by a health care provider's mistake, you might want to start with these articles:
- Do I Have a Medical Malpractice Case?
- How Do I Prove Medical Malpractice?
- How Long Will My Medical Malpractice Claim Take?
For information that's tailored to your situation, it might make sense to talk with an experienced legal professional. Learn more about finding the right medical malpractice lawyer for you and your case, and how much a medical malpractice attorney might cost.