Non-economic damages caps

With regard to the latter, proponents of tort reform argue that large, unpredictable damages causes an increase in the cost of medical malpractice insurance for healthcare professionals[4] and encourages the practice of defensive medicine whereby medical practitioners agree to unnecessary treatment in order to decrease the likelihood of future malpractice claims.

Additionally, opponents argue that limits on damages in cases of medical malpractice may create moral hazard as healthcare professionals face reduced liability.

[6] In a study published in 2005 in the Journal of the American Medical Association, 93% of physicians surveyed reported practising defensive medicine, or "[altering] clinical behaviour because of the threat of malpractice liability.

"[5] Of physicians surveyed, 43% reported using digital imaging technology in clinically unnecessary circumstances, which includes costly MRIs and CAT scans.

[5] Forty-two percent of respondents reported that they had taken steps to restrict their practice in the previous 3 years, including eliminating procedures prone to complications, such as trauma surgery, and avoiding patients who had complex medical problems or were perceived as litigious.

[7][8] Nevertheless, a study by the U.S. Congressional Budget Office published in 2004 found that "Malpractice costs account for less than 2 percent of health care spending.

Due to the scheme's no-fault basis, people who have suffered personal injury may only sue an at-fault party for exemplary damages.

[19] Damage caps have various purposes; for instance, they can discourage malicious lawsuits and prevent the costs of transacting business from being overly inflated, but have also been criticized as unjust.

The law, which overrode a gubernatorial veto to pass in 2017, was criticized in the aftermath of Hurricane Florence, which resulted in significant nuisance litigation against regional hog-farming conglomerate Smithfield Foods due to the failure of many hog-waste lagoons.

"[33] In 2005, a Wisconsin court ruled that a $350,000 cap on non-economic damages in medical malpractice cases violates the state's equal protection guarantee.

In Ferdon v. Wisconsin Patient's Compensation Fund,[34] the court ruled that there was no rational relationship between the objectives identified by the legislature that were intended to prevent a medical liability crisis in Wisconsin and treating people with more severe injuries and higher non-economic damage awards different from people with lower non-economic damage awards.