
Like many states, the Utah government is completely dominated by a single political party: in this case, it's the Republicans. That can sometimes result in the consideration and passage of some weird laws, but in 2025, the Utah legislature and governor have really done doctors a solid. They have amended Utah's malpractice laws in such a way that doctors are dramatically less likely to lose personal assets in a medical malpractice lawsuit.
While this is actually an extremely rare occurrence anyway (as noted in everything I've ever written about asset protection, including The White Coat Investor's Guide to Asset Protection), it is now nearly impossible for malpractice lawsuits in Utah.
Protection of Personal Assets for Physicians in Utah
Here is how the new law reads:
“A plaintiff may not pursue, collect, or execute on a judgment against an individual health care provider's personal income or assets, unless the court finds that:
(a) the provider's conduct was willful and malicious or intentionally fraudulent; or
(b) the defendant provider failed to maintain an insurance policy with a policy limit of at least $1,000,000.”
So, get your $1 million/$3 million policy (as most Utah doctors carry) and don't hurt anyone intentionally or fraudulently, and you're now playing this game only with “house money.” You're now truly only a defense witness for the insurance company if you get sued. You'll still be drug through the ringer for five years. You're still going to lose a few nights of sleep. You still may feel terrible about one of your patients who had a terrible outcome. But you're not going to lose your house, your non-retirement investments, your cars, and more, and you won't have to declare bankruptcy. At most, there will be a policy limits payout, and you'll be reported to the National Practitioner Database. If that happens a few times, you'll have a much harder time getting a job, but you no longer have to worry about losing everything you have worked so hard to obtain over decades.
A particularly nice side benefit of this law is that doctors in Utah will now feel more empowered to defend their good care. The incentive to settle is now dramatically lower for the doctor. Why settle if you're not going to lose your personal assets to some runaway malpractice verdict anyway? A settlement will be reported to the database just as much as a judgment. The only incentive to settle now is that you might be able to quit messing around with the case a couple of years earlier.
Previous plaintiffs and attorneys were not thrilled about the law, arguing that this, in effect, puts a $1 million cap on damages, even though the true economic damages might be far more than that. This is true, and it is really the biggest issue with using the adversarial legal system to compensate injured patients instead of a much better (but less profitable for attorneys) no-fault compensation system, such as the one that exists in Virginia for birth injuries. In that system, doctors in the state all pay into a fund annually (OBs pay a lot more) that is used to compensate the families of babies with neurologic injuries during birth.
What if a no-fault compensation system was how all injured patients were dealt with? It would be pretty awesome! Most malpractice isn't prosecuted, and most of what is prosecuted isn't malpractice. The whole current system is incredibly unfair to all involved.
More information here:
What (Not) to Do If You’re Sued — Lessons from an Expert Witness
What Else Did Utah's H.B. 503 Law Do?
This wasn't the only reform to the Utah malpractice laws. There were several other provisions in the bill.
No More Painting the Doctors as Rich
I thought this provision was interesting:
“(5) Prior to any award of damages to a plaintiff, a plaintiff may not make allegations that the court finds:
(a) are irrelevant to the adjudication of the claims at issue;
(b) are made primarily to coerce or induce settlement in an individual defendant provider; and
(c) pertain to a provider's personal income or assets.”
Basically, you can't tell the jury about the doctor's three houses until after a judgment is made, and you can't just make wild allegations to get a settlement. Seems reasonable.
Indexed Non-Economic Damages to Inflation
Utah used to have a $450,000 cap (originally $250,000) on non-economic (pain and suffering) damages, but it was never indexed to inflation. Now it is.
“78B-3-410. Limitation of award of noneconomic damages and economic damages in malpractice actions.
(1) In a malpractice action against a health care provider, an injured plaintiff may recover noneconomic losses Subject to Subsection (3), an injured plaintiff in a malpractice action against a health care provider may only recover noneconomic losses to compensate for pain, suffering, and inconvenience. The amount of damages awarded for noneconomic loss may not exceed . . .
(d) for a cause of action arising on or after May 15, 2010, $450,000.
(2)(a) Beginning July 1, 2002 and each July 1 thereafter until July 1, 2009, the limit for damages under Subsection (1)(c) shall be adjusted for inflation by the state treasurer Administrative Office of the Courts . . .
(3) As used in this section, ‘inflation' means the seasonally adjusted consumer price index for all urban consumers as published by the Bureau of Labor Statistics of the United States Department of Labor.”
Good for plaintiffs, bad for doctors. But I always think it's silly not to peg things like this to inflation. Interestingly, they didn't peg the $1 million malpractice requirement to inflation. It would be a pain to have that amount change every year, but adjusting it by $100,000 every five years wouldn't be so bad and seems more fair.
Plaintiffs Have to Pay Attorney Fees If the Pre-Litigation Panel Returns a Judgment of Non-Merit
In Utah, we have non-binding, pre-litigation panels. The plaintiff and their attorney have to take the case to a panel that includes an attorney; relevant, uninvolved healthcare providers (who have to serve or pay a $5,000 fine); and a responsible citizen to see if the case has merit before they can proceed with a lawsuit. Most of the time, the lawsuit is found to be non-meritorious and often just goes away at that point, especially if the attorney is experienced.
I suspect the attorneys sometimes use the panels to convince the plaintiff that they don't even really have a good case or, particularly in the case of inexperienced attorneys, just do it to “throw stuff at the wall to see if it sticks.” But the few times that the case is found to be meritorious, I suspect the doctor is far more likely to just settle at that point rather than go through more years of pain. As a new disincentive against frivolous lawsuits, the legislature now indicates that the plaintiff may have to pay the doctor's attorney fees if the case is non-meritorious.
“78B-3-418.5. Attorney fees.
(1) The court may award attorney fees and costs to a respondent provider if:
(a)(i) a prelitigation review panel renders an opinion under Subsection 78B-3-418(2)(a) that a claimant's claim or cause of action has no merit . . . and
(c) the court finds that the claimant did not substantially prevail.
(2) A claimant in a malpractice action against a health care provider, or the claimant's attorney, is liable to any respondent for the reasonable attorney fees and costs incurred by the respondent, or by the respondent's insurer, in connection with any filing, submission, panel review, arbitration, or judicial proceeding under this part for which a claimant files or submits an affidavit containing an allegation that the court or arbitrator finds that the claimant knew, or should have known, to be baseless or false at the time the affidavit was signed, filed, or submitted.”
There is now an additional disincentive even to call a pre-litigation panel and an additional way in which the doctor can fight back against bogus lawsuits. Defending a lawsuit can easily cost $100,000 or more in defense attorney fees, so now the plaintiff has some skin in the game, too. Yes, they might get a $1 million judgment, but they also might lose $100,000. Making baseless or false claims carries the same potential penalty.
The Pre-Litigation Panel Is No Longer Required
The pre-litigation panel USED to be mandatory, but no longer.
“(2)(a) A claimant may proceed to litigate and pursue a judicial remedy regardless of whether:
(i) the claimant has obtained or filed an affidavit of merit under this section;
(ii) a review panel deemed the claimant's claims to have merit; or
(iii) the claimant participated in a review panel.”
I don't know how much I like this, but given that there is now a potential penalty for the pre-litigation panel (attorney costs), I'm not sure why a plaintiff would bother. That's good in that I will have to serve on fewer of them (I've only had to be on one in 15 years) but probably bad in that fewer cases will end at the pre-litigation panel.
Utah's new malpractice law is much better now (and perhaps the best in the nation), although further improvement is, of course, possible. Hopefully, other states soon follow suit by eliminating the potential to lose personal assets.
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What do you think? What malpractice reforms do you think should be done? How has your state handled it?
This is amazing! Every state should push for this. If I were just finishing training or looking for a new job, I would definitely look in Utah even though I have no family or friends anywhere near there. But I’ve been practicing in Maryland for 23 years and moved my elderly parents with health problems here a couple years ago and have a sister and cousin close-by and another sister on the east coast. White coat investor, you picked the right state to practice! If Utah has a physician shortage like the rest of the country, they won’t for long.
“The incentive to settle is now dramatically lower for the doctor.”
Some malpractice insurers retain the right to settle for you.
How is it in Utah?
Varies by policy I’m sure. No idea what percentage give the insurer that right. I’d guess less than half.
If it makes sense for MD’s then shouldn’t everybody also get the same protection of their personal assets under the same restrictions. As an engineer why should my personal assets be at more risk than my doctor’s?
Is the engineering field beset by an endless onslaught of frivolous claims? Does it lead to engineers making decisions divorced from engineering, serving only to shield themselves from liability?
There are plenty of lawsuits against engineers. I’m an expert witness in engineering lawsuits, but the frequency is irrelevant. It’s about whether professionals all deserve the same protection from excessive awards. Many engineers work self employed, as do some doctors. They face similar liabilities. Doctors can only kill people one person at a time, an engineer can kill dozens with one mistake. I’m not opposed to tort reform, I am opposed to the government picking winners and losers.
Call your state legislator then and tell them “Utah did this for doctors, why can’t you do it for engineers in our state?”
But I’m still not sure you understand that malpractice is PERSONAL. You can’t just have your business declare bankruptcy and move on. I don’t think engineering lawsuits are personal are they? How much is your engineer malpractice insurance? Oh, you don’t have any? You can’t find anyone who has ever bought it? Me either.
You can buy it from The Hartford apparently:
https://www.thehartford.com/professional-liability-insurance/engineers
It starts at $400 a year and tops out at $4,000. Sounds a lot like OB/GYN malpractice that starts at $40K and tops out at $100K or so. At any rate that website proves my point with its first paragraph:
I would stay away from Hartford Insurance, as I found it frustrating filing a claim after years of paying premiums. A part-time med spa laser practice was flooded by a broken pipe in the residence over the office. They were unresponsive despite multiple calls by my office manager. We dealt with a clown car of insurance adjustors that was constantly changing. After refusal to initially respond to survey the damage, months later asked whether the damage was from water or temperature?, etc The gamesmanship involved to deny and than delay paying the claim required so much work on my part, I stopped them midclaim and told them they won out of complete frustration. They added insult to injury by not immediately canceling this worthless policy going fwd, putting me into collection for an additional years premium despite my many attempts to get off their crazy-go-round.
Liberty Mutual responded to a similar flooding 15 years earlier professionally and rapidly.
HARTFORD, never again.
Thanks for sharing your experience.
As stated already there are insurance companies selling coverage for engineers. I didn’t realize doctors can’t incorporate and get the same protection as other professionals. Maybe a better solution would be to offer them a similar set up? I don’t currently carry liability insurance as I recently retired from paid work. But I have gotten quotes, Its not difficult to find. I have also served as a nonprofit hospital board chair recently, and still serve on the board. Hospitals would welcome anything that reduces costs as it is a struggling business sector currently.
Not unusual you serve on a hospital board and have lots of opinions on how doctors should conduct their affairs, and post on a physician targeted website, but know zero, nothing, about the medical profession . Physicians achieve a pittance of equity in one tiny state and here is some guy crying it’s not fair that a few doctors might be abused slightly less now. Juries are full of people with similar attitudes and ‘knowledge’. This is part of the ‘mass exodus’ from medicine. Whereas even Walmart now hosts a medical school and you can buy your MD visit on amazon, do you think the best and brightest will sign up for the job? Total ignorance and apathy.
Malpractice is always personal. If you screw up at work, your employer is liable and if you’re the employer you can protect yourself by incorporating the business. That doesn’t work in medicine.
But it is true that a doctor’s (or an engineer’s) personal liability isn’t limited if they run someone over with their car.
Makes a big difference in how I practice as an ED doc in Utah as well as my partners. I do believe that in time this will cut down on ED wait times, entice physicians to come to Utah, and overall costs to the system.
Wisconsin has something that protects physicians’ wealth as well:Injured Patients and Families Compensation Fund (IPFCF). Physicians carry malpractice of 1 mil/3mil, and any claim that exceed the limits, the IPFCF covers additional damages. So doctors’ personal assets are not at risk for malpractice awards above their insurance coverage.
Yea, I love that thing. But I was told by the WI OMFS society I spoke at last week that it doesn’t apply to them for some reason which I thought really stinks. So I don’t know all the details or why some specialties or insurers aren’t included in the program. But I do like the possibility of state compensation fund programs as discussed here:
https://www.whitecoatinvestor.com/patient-compensation-funds/
But I like Utah’s new law even better.
I’ve had two attempted lawsuits in my 21 years of practice in Utah. One went to pre-litigation hearing and was immediately deemed non-meritorious and got dropped. It helped that the plaintiff’s attorney was a bonehead and overlooked major information that any competent attorney would’ve know was a case-killer.
The other kept saying he was going to schedule pre-lit, but wanted to just settle quickly instead. Save us all a lot of time and headache. Very much a “throw crap at the wall” kind of case. My attorney kept saying, “No way. Schedule it. Let’s go.” Plaintiff’s attorney kept coming back with lower and lower settlement offers. When he got to $12K and we laughed at him, it dropped.
I’ve never been too worried about a judgment exceeding my limits. But I do like that plaintiffs now may have to pay costs if they lose. This seems especially timely now that I-15 down the middle of the Salt Lake Valley is lined with billboards advertising the ambulance chasing shysters. It’s starting to look like that wretched hive of scum and villainy, Las Vegas.
Thanks for breaking this down and the explanations. We’ve discussed with family the field of medicine they choose to protect themselves from the potential risk of the unfortunate situations that can happen in the healthcare world. Curious, can you comment on how this applies to current cases in the “5 year” malpractice system? In court currently? In process at other stages? Thank you
I’m guessing it doesn’t apply to anything that has already been filed, but I’m not 100% sure.
Texas does it differently, and I think, better for the docs, although it does take a bit more effort.
In 2003, Texas passed major tort reform. Non-economic damages are limited to 250K. Actual and future medical expenses and loss of income, which can be substantial, are added to the 250K total.
Texas also has very strong creditor protection, and it’s in the state constitution. No wage garnishment. Retirement accounts including 401k, Roth, all pensions, annuities, cash value life insurance, are all protected. Your primary homestead, 2 vehicles, home furnishings, and livestock(!) are protected.
As a result of all of this, I carried only 200/600K of med mal coverage (before retirement). That was pretty standard for the hospitals I practiced in. It was relatively cheap, both because of the low limits, and the reluctance of good aggressive attorneys to concentrate on suing docs with the potential reward being so limited.
It was easy for me to become a small target, but this may cramp the style of some physicians. Second homes, large brokerage accounts, 3rd and more cars, airplanes or boats would be exposed, but I was lucky enough to get through my career with the one house, one spouse policy that I was advised to pursue as a resident.
The Utah system in my view provides too many incentives for plaintiff attorneys, but the limit describes is better than nothing, and may be better for a lot of docs whose lifestyle is more complicated than mine.
Texas does have pretty good asset protection laws, but if you accidentally kill a CEO via malpractice you could end up paying out of pocket even if you have a million dollar policy. That’s no longer the case in Utah.
Excellent news for those practicing in Utah! Also, Indiana has a similar panel review process and Florida has a similar set-up for birth injury as Virginia.
Is there adjustment for actual payments to physicians rather than physician charges used to artificially inflate claims of losses?
Yes, I believe so.