Rising Medical Malpractice Payouts Drive Push for Tort Reform - Insurance News | InsuranceNewsNet

InsuranceNewsNet — Your Industry. One Source.™

Sign in
  • Subscribe
  • About
  • Advertise
  • Contact
Home Now reading Property and Casualty News
Topics
    • Advisor News
    • Annuity Index
    • Annuity News
    • Companies
    • Earnings
    • Fiduciary
    • From the Field: Expert Insights
    • Health/Employee Benefits
    • Insurance & Financial Fraud
    • INN Magazine
    • Insiders Only
    • Life Insurance News
    • Newswires
    • Property and Casualty
    • Regulation News
    • Sponsored Articles
    • Washington Wire
    • Videos
    • ———
    • About
    • Meet our Editorial Staff
    • Advertise
    • Contact
    • Newsletters
  • Exclusives
  • NewsWires
  • Magazine
  • Newsletters
Sign in or register to be an INNsider.
  • AdvisorNews
  • Annuity News
  • Companies
  • Earnings
  • Fiduciary
  • Health/Employee Benefits
  • Insurance & Financial Fraud
  • INN Exclusives
  • INN Magazine
  • Insurtech
  • Life Insurance News
  • Newswires
  • Property and Casualty
  • Regulation News
  • Sponsored Articles
  • Video
  • Washington Wire
  • Life Insurance
  • Annuities
  • Advisor
  • Health/Benefits
  • Property & Casualty
  • Insurtech
  • About
  • Advertise
  • Contact
  • Editorial Staff

Get Social

  • Facebook
  • X
  • LinkedIn
Newswires
Property and Casualty News RSS Get our newsletter
Order Prints
April 19, 2026 Property and Casualty News
Share
Share
Post
Email

Rising Medical Malpractice Payouts Drive Push for Tort Reform

Lauren JohnsonBirmingham Medical News

Medical professionals, insurance companies and government representatives are calling for tort reform, and warning that without it, Alabama is going to struggle economically.

Claim severity has increased significantly in the past few years, especially for medical malpractice. According to the Alabama Department of Insurance, total payouts from insurers rose by 140 percent from $9.6 million in 2020 to $23.5 million in 2024.

Margaret Nekic, CEO of Inspirien, and William McGowin, general counsel for Inspirien, described the current state of the medical malpractice legal field as an uphill battle.

With venue shopping, no caps on damages, and an increase in plaintiff ads, everything seems to be stacked against the medical professional defendants. These lawsuits increase malpractice insurance costs, and the fear of lawsuits leads physicians to practice defensive medicine. It's becoming harder to recruit doctors when surrounding states have caps on damages, and other tort reform legislation already in place.

"We're not trying to block plaintiffs from getting what they deserve– reasonable compensation for damages. We're against the nuclear verdicts," McGowin said.

The Medical Liability Act of 1987 put a $1 million cap on damages in medical malpractice cases in Alabama. However, this bill was ruled unconstitutional in the 1995 Smith v Schulte case. In that trial, the jury awarded $4.5 million to the plaintiff, and the supreme court reduced the amount to $2.5 million.

Since this decision, medical malpractice damages have skyrocketed. In the Mobile County Circuit Court last month, a jury awarded $50 million for a wrongful death medical malpractice case. That's up from a $35 million judgement in a similar case in the same venue four years earlier.

"If the cap had held, we would be around $2.5 million now, but they raised it to $2.5 million in 1995," Nekic said. "If you look at consumer price index, that amount would be about $5 million in today's world, but the supreme court has raised it significantly in recent years. These escalating jury awards are unsustainable."

Before trial, plaintiff lawyers get to select a venue, which plays a huge role in the case according to McGowin.

"The plaintiff lawyers are always trying to shop venue," he said. "Venue is probably the number one thing they look at when they file a lawsuit. Our big metropolitan areas have become very plaintiff friendly – Mobile, Montgomery and Jefferson County.

"Some of our biggest settlements have been in cases where our hospital and doctors didn't even practice in that county, but they're sued there. We've got to change the venue statute in medical malpractice."

McGowin and Nekic have also seen the negative effects the global pandemic has had on the medical field, malpractice cases and lawsuits in general. "Since Covid, you can't turn on the television without seeing a plaintiff lawyer ad, " McGowin said.

The pandemic put a halt to most lawsuits, causing a backlog of court proceedings. Since the courts reopened, the cost of settlements and awarded damages drastically increased.

"You're faced with jurors who are not knowledgeable about healthcare, and you don't have judges who are trying to manage expectations," Nekic said. "Plaintiff's attorneys are advertising everywhere and saying they're getting multi millions. It's a jackpot justice."

Some hospitals and healthcare providers have insurance to cover the cost of damages while others do not. Either way, their rates will increase.

"That's the misconception that the general public doesn't understand. This money has got to come from somewhere," McGowin said. "It costs the average family in Alabama about $3,000 a year in litigation cost, so somebody's paying for it and it's the consumer. Something's got to be done, or we're going to lose business to the adjacent states, especially in healthcare but in other industries as well."

To implement caps again, the supreme court could simply rule that the court back in 1995 was wrong and caps are constitutional. Then the cap of about $2.5 million would be effective again.

"Medical professionals are being very cautious with patients because they don't want to get sued. They're practicing defensive medicine instead of what they really wanted to do, which was to help people," Nekic said.

Alabamians for Legal Reform (ALR) is working to get this message out, and it's expected that tort reform will be a big topic in next year's legislative session.

Older

Williams Companies, Inc. (The) $WMB Shares Sold by Asset Management One Co. Ltd.

Newer

MEDICAID COST-SHARING COVERAGE APPROVED

Advisor News

  • What’s behind private equity investment in insurance brokerages
  • Advisors get a win as NJ Senate passes independent contractor bill
  • Why federal retirement benefits are more complex than advisors realize
  • Why timing the market is still a retirement mistake and what to do instead
  • Business owners may be overlooking a key part of their financial picture
More Advisor News

Annuity News

  • Best’s Special Report: U.S. Life/Annuity Industry Sees Bottom-Line Growth Despite 18% Decline in Total Income in First-Quarter 2026
  • Globe Life Inc. (NYSE: GL) Records 52-Week High Thursday Morning
  • Fortitude Re Completes $500 Million FABN Issuance
  • Reframing retirement income for greater certainty
  • Jackson Introduces Dow Jones Industrial Average Index Option, Flexible Premiums, Six-Year Rate Guarantee in Latest Registered Index-Linked Annuity Launch
More Annuity News

Health/Employee Benefits News

  • California is getting ready to increase a health insurance tax. Will it affect your premium?
  • New Insurance Findings from University of California Described (The impact of Medicaid expansion on coverage among those lacking housing basics, 2010-2019): Insurance
  • New Mexico lawmakers press Presbyterian Health Plan over changes
  • Luigi Mangione's lawyers withdraw plans for psychiatric defense
  • Karnes County commissioners to consider health insurance renewal, construction projects
More Health/Employee Benefits News

Life Insurance News

  • OVER $107 MILLION IN LIFE INSURANCE BENEFITS LOCATED FOR TENNESSEANS IN 2025 THROUGH NAIC'S LIFE INSURANCE POLICY LOCATOR SERVICE
  • Maryland Heights man pleads guilty in murder-for-hire death of his mom
  • AM Best Affirms Credit Ratings of Everlake Life Group Members
  • Industry experts warn NAIC: Fix flawed IUL illustrations now
  • InsuranceAUM.com Celebrates a Historic 5th Annual Insurance Investment Executives’ Meeting in Chicago, Honoring Outstanding Industry Leaders and Spotlighting Next Event in Austin
More Life Insurance News

NEWS INSIDE

  • Companies
  • Earnings
  • Economic News
  • INN Magazine
  • Insurtech News
  • Newswires Feed
  • Regulation News
  • Washington Wire
  • Videos

FEATURED OFFERS

Maximize Your FIA Case Results
Learn a repeatable process to review, reposition, and present FIA opportunities with confidence.

Aim higher during Annuity Awareness Month
Raise the bar with our diverse portfolio of Ascend annuities, backed by superior financial strength

You Could Be Losing Up to 20% of Your Commissions
GreenWave helps you find, fix, and prevent commission errors.

True Independence Means Having Choices
Cambridge offers flexibility, stability, proven tools—no private equity strings attached.

Life moves fast. Your BGA should, too.
Stay ahead with Modern Life's AI-powered tech and expert support.

Looking for stronger rates, amplified growth & real results?
Sentinel's Accumulation Protector Plus℠ Annuity is for clients wanting more from retirement planning

Press Releases

  • Prosperity Life GroupSM Launches Prosperity PathWaySM Series, Bringing Greater Choice and Flexibility to Retirement Income Planning
  • Senior Market Sales® Fortifies Annuity Reach With Acquisition of Retirement Planning Firm Stratton & Company
  • RFP #T01625
  • Rockwood Programs Appoints Kerry Ladouceur as Vice President, Financial Lines
  • JP Insurance Group Launches Commercial Property & Casualty Division; Appoints Joe Webster as Managing Director
More Press Releases > Add Your Press Release >

How to Write For InsuranceNewsNet

Find out how you can submit content for publishing on our website.
View Guidelines

Topics

  • Advisor News
  • Annuity Index
  • Annuity News
  • Companies
  • Earnings
  • Fiduciary
  • From the Field: Expert Insights
  • Health/Employee Benefits
  • Insurance & Financial Fraud
  • INN Magazine
  • Insiders Only
  • Life Insurance News
  • Newswires
  • Property and Casualty
  • Regulation News
  • Sponsored Articles
  • Washington Wire
  • Videos
  • ———
  • About
  • Meet our Editorial Staff
  • Advertise
  • Contact
  • Newsletters

Top Sections

  • AdvisorNews
  • Annuity News
  • Health/Employee Benefits News
  • InsuranceNewsNet Magazine
  • Life Insurance News
  • Property and Casualty News
  • Washington Wire

Our Company

  • About
  • Advertise
  • Contact
  • Meet our Editorial Staff
  • Magazine Subscription
  • Write for INN

Sign up for our FREE e-Newsletter!

Get breaking news, exclusive stories, and money- making insights straight into your inbox.

select Newsletter Options
Facebook Linkedin Twitter
© 2026 InsuranceNewsNet.com, Inc. All rights reserved.
  • Terms & Conditions
  • Privacy Policy
  • InsuranceNewsNet Magazine

Sign in with your Insider Pro Account

Not registered? Become an Insider Pro.
Insurance News | InsuranceNewsNet