House Votes to Limit Medical Suit Damages : Congress: Victims of malpractice could collect no more than $250,000 for ‘non-economic’ losses such as pain and suffering. California law is the model.

Expanding an already broad bill restricting lawsuits, the House voted Thursday to limit victims of medical malpractice to receiving no more than $250,000 for pain and suffering and other “non-economic” losses.

The provision, patterned after California’s law, was brought up as an amendment on the House floor and approved on a 240-171 vote after heated debate.

The House is expected to vote today on the overall bill, which also seeks to limit the controversial practice of giving ordinary jurors virtually unlimited power to punish giant corporations with multimillion-dollar fines.

In debate Thursday, Democratic critics, joined by some Republicans, charged that the medical malpractice limit would shortchange those who have been paralyzed, lost their eyesight or suffered a similarly severe injury in a medical facility.

“This is not common-sense legal reform. It is not even common decency,” said Rep. Richard J. Durbin (D-Ill.), recounting the story of a baby who was left brain-damaged because of a physician’s negligence.

But its Republican sponsors argued that the measure would serve as a first step toward lowering health care costs nationwide.

“This will save the extra costs that lawsuits and lawyers suck out of our medical system,” said Rep. Christopher Cox (R-Newport Beach). He said that doctors in California pay malpractice premiums that are 33% lower than the national average, thanks to a 1975 law that capped pain and suffering awards at $250,000.

The House also approved two other amendments Thursday. One would bar all punitive damage awards against makers of drugs and medical devices that have been approved by the Food and Drug Administration. Its sponsors said that the threat of punitive verdicts keeps innovative health care products off the market.

The other amendment provides that companies that are successfully sued would be obligated to pay only their share of the liability and would not be responsible for all damages. This rule, too, is part of California law. In most other states, all defendants--from a manufacturer to a retailer--are legally responsible for seeing that a victim is fully compensated.

The amendments, while favored by a majority in the House, almost certainly will increase opposition to the legislation in the Senate and at the White House and reduce its chances of becoming law.

Even without the new provisions, Clinton Administration officials had complained that the measure is tilted unfairly in favor of business and against ordinary consumers. Consumer advocates and trial lawyers had had a hard time attacking the legislation, however, because until Thursday its most sweeping proposals limited punitive damages but not compensation for injured persons.

While critics could highlight stories of victims who have been badly burned, disfigured or paralyzed by defective products, the House bill as it originally was drafted did not block these victims from winning damages to pay medical bills, lost wages, and pain and suffering awards.

The original version would have restricted punitive awards to three times the victim’s monetary losses, or $250,000, whichever is greater.

But the malpractice provision added Thursday would impose other kinds of limits and would give critics an opening to attack the bill as callous and cruel to those who have suffered the most severe injuries.

Sponsors of the amendment noted, however, that it would not limit what malpractice victims can recover to pay for medical bills, lost earnings, continuing care or lifetime rehabilitation, if that is needed.

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Until now, lawsuits involving personal injuries, defective products or medical malpractice have been governed almost exclusively by state law. But the new Republican majority has moved aggressively toward setting the first national rules for lawsuits.

The move has made for a role reversal during the debate. While Republicans speak glowingly of the need for federal standards, Democrats have championed states’ rights.

On Tuesday, the House adopted a version of the “loser pays” rule. Plaintiffs who bring lawsuits and refuse a settlement offer could be required to pay the legal costs of the defendants if a jury ultimately awards them less money.

On Wednesday, the House voted to make it harder for groups of disgruntled investors to sue a company over a drop in its stock price.

The House is expected to finish the bill and send it to the Senate this afternoon, where action is not anticipated for several weeks.

* LEGAL IMPACT: How tort reform affects consumers, firms, lawyers. D1