Why are MICRA & the Napkin Deal Important to Personal Injury?

California Legal Blog

Why are MICRA and the Napkin Deal Important to Personal Injury?

March 4, 2022 Robert Jalon

In the last installment in our series about MICRA, we explore the importance it has on personal injury and the ballot box.

The Medical Injury Compensation Reform Act (MICRA) was a piece of legislation passed in the late 1970s that placed contingency fees on trial lawyers to the benefit of insurance companies and the California Medical Association. Many trial lawyers felt this new law was a direct attack and have fought at the ballot to repeal MICRA since.

“The Napkin Deal”, as it was infamously named, was an agreement between lawyers, big tobacco, doctors, and insurance companies. Although the Napkin Deal mostly benefited big tobacco and other large companies, it was seen as a win for lawyers too. This agreement, which was orchestrated by assemblyman Willie Brown, released manufacturers from any liability when suffering an injury or illness stemming from the use of inherently “unsafe” products like cigarettes.

Although it reduced the amount of product liability lawsuits being filed by consumers, personal injury attorneys could now command higher contingency fees because it was much harder to win a case. Product liability is the area of law concerning defective or dangerous products. The deal was a much-needed band-aid for wounds created by the passing of MICRA.

When representatives from all four industries met at Frank Fat’s restaurant in Sacramento to reach a deal, it would be a small win for lawyers, but the so-called “truce” struck between these four industries would not last long. The Napkin Deal would be repealed just ten years after being signed into law.

Since the passing of MICRA and especially after the repeal of the Napkin Deal, there have been many fights at the ballot over legislation regarding attorney contingency fees. In fact, a measure placed on the ballot this November will once again stir up the “tort wars” that have been raging since the late 1970s.

MICRA directly affects personal injury lawyers and the amount of money they can retain for their representation. This makes it the hot button issue for the PI industry at the ballot box this November, and the consequences of what happens on election day are sure to be felt. You can learn more about the initiative to repeal MICRA and how it could impact you with the official state filing. For guidance on your product liability claim by compassionate, aggressive attorneys that know all the intricacies of MICRA and personal injury law, contact Adamson Ahdoot LLP.

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