Medical Malpractice Funding in California
State rules that shape pre-settlement funding for California medical malpractice plaintiffs. How MICRA's rising non-economic cap, the 340.5 clock, and the 90-day notice shape advances.
Non-recourse funding is repaid only from a settlement or award. Independent capital providers set the terms.
Bills do not wait for your case.
Rent, medical bills and living costs keep arriving while a case moves through the court. An advance against a pending case can cover them and is repaid only if the case produces a recovery.
The California rules that shape this claim
The rules below shape how a California medical malpractice funding claim is underwritten and how quickly it can move toward resolution.
California medical malpractice claims run on the MICRA statute of limitations, not the two-year general personal injury period. Under Code of Civil Procedure section 340.5, suit must be filed within three years of the injury or one year after the plaintiff discovers, or should have discovered, the injury — whichever comes first. The one-year discovery clock is the one that usually controls, and the three-year period is an outer limit that yields only for fraud, intentional concealment, or a foreign object left in the body with no therapeutic purpose. A child under six has until the eighth birthday if that is longer. Before filing, the plaintiff must serve a 90-day notice of intent to sue under Code of Civil Procedure section 364; if that notice is served within the last 90 days of the limitations period, the deadline is extended 90 days from service.
Pure comparative negligence. A California med-mal plaintiff's recovery is reduced by the plaintiff's own percentage of fault but is never barred, under Li v. Yellow Cab Co., 13 Cal.3d 804 (1975). In practice, the defense argument that a patient failed to follow instructions or delayed care reduces the award proportionally rather than eliminating it.
California caps non-economic damages in medical malpractice under MICRA, Civil Code section 3333.2, as rewritten by AB 35 (2022). The cap is on a fixed escalator: for cases filed in 2026 the limit is $470,000 for injury claims and $650,000 for wrongful death claims. Each January 1 the injury cap rises by $40,000 and the wrongful death cap by $50,000, reaching $750,000 and $1,000,000 in 2033, after which both adjust two percent annually. There is no separate catastrophic-injury tier; a living plaintiff with a permanent injury is subject to the injury cap. AB 35 also allows separate caps to apply against health care providers, health care institutions, and unaffiliated providers or institutions in the same action, so the practical ceiling can exceed a single cap figure. Economic damages — medical expenses, lost earnings, future care — are not capped.
California does not award prejudgment interest on unliquidated personal injury damages as a matter of course. The exception is Civil Code section 3291: if the plaintiff serves a statutory offer to compromise under Code of Civil Procedure section 998 and the defendant rejects it, then obtains a judgment more favorable than the offer, interest at ten percent per year runs on the personal injury damages from the date of the first offer. Section 3291 does not apply to public entities or public employees.
Medical malpractice actions are filed in the Superior Court of the county where the injury occurred or where any defendant resides, under Code of Civil Procedure section 395(a). Claims against public hospitals and University of California medical centers require a Government Claims Act presentation before suit, which adds its own six-month claim deadline.
California regulates consumer litigation funding under the California Consumer Legal Funding Act (AB 931), Cal. Bus. & Prof. Code §§ 6250–6256. No percentage or APR cap.
How California regulates consumer legal funding
Reviewed September 17, 2026. Legal information, not legal advice.
How terms are set for California plaintiffs
Rates and terms are set by the capital provider and written in the provider’s agreement before signing.
California med-mal claims are among the longer personal injury matters in the state because the 90-day section 364 notice, the MICRA one-year discovery clock, and the expert-driven standard-of-care discovery each add a stage before a defendant will engage in settlement.
How does the MICRA cap affect the size of a California med-mal advance?
The cap sets a legal ceiling on the non-economic portion of recovery, so underwriting starts from the capped figure for the filing year plus uncapped economic damages. A claim with large documented medical costs or lost earnings supports a larger advance than one whose value is mostly pain and suffering.
For a 2026 filing, the injury cap is $470,000 and the wrongful death cap is $650,000, and those figures rise every January until 2033. Because economic damages are uncapped, the medical-expense and future-care record is usually the largest driver of fundable value in a California case. Where AB 35 allows separate caps against a provider and an institution, counsel's theory of which defendants are liable matters to the analysis.
Why does the one-year discovery rule matter more than the three-year limit?
Section 340.5 runs from the earlier of the two periods, so a plaintiff who learned of the injury early may have far less than three years. Funders confirm the filing date against both clocks before advancing, because a limitations defense is fatal to the claim and to repayment.
The three-year outer limit bends only for fraud, intentional concealment, or a retained foreign object. The 90-day notice under section 364 is mandatory before filing, and serving it inside the final 90 days extends the deadline, which is a common point of dispute. Underwriting reviews the notice date and the complaint date together.
Does California's pure comparative rule help a med-mal plaintiff seeking funding?
Yes. Under Li v. Yellow Cab, a patient who is partly at fault — for missed appointments or noncompliance — still recovers, reduced by that percentage. The defense cannot use patient fault to zero out the claim, which keeps a partial-fault case fundable.
Underwriting still discounts for the fault allocation the evidence supports, because it reduces the net recovery that repays the advance. The question is the size of that reduction, not whether the claim survives. Cases where the fault argument rests on undocumented assertions are treated differently from those with a clear noncompliance record.
Medical Malpractice Funding questions in California
Funding typically follows the filed complaint, which cannot be filed until the section 364 notice period has run. Once the case is filed, a qualified expert has reviewed the standard-of-care and causation questions, and counsel is retained on contingency, the claim can be underwritten. Earlier-stage inquiries are evaluated case by case, but the filed complaint is the usual starting point.
The cap limits only non-economic damages, and it now rises each year under AB 35. Economic damages — past and future medical care, lost income, and the cost of ongoing treatment — remain uncapped. A California case with substantial documented economic loss is evaluated on that record, and the capped non-economic component is added at the figure in force for the filing year.
Section 340.5 runs one year from discovery, so a plaintiff who has known of the injury for over a year may already be time-barred unless an exception applies. Fraud, intentional concealment, or a retained foreign object can extend the period. Counsel should confirm the accrual date immediately, because a limitations defense is one of the first issues a funder checks.
Yes. AB 35 created a separate, higher cap for wrongful death claims — $650,000 for 2026 — rising $50,000 each January to $1,000,000 in 2033. Injury claims follow a lower schedule. Which cap applies depends on whether the patient died from the alleged negligence, and underwriting confirms the claim category with counsel before evaluating the advance.
Only through the Civil Code section 3291 mechanism. If your attorney serves a section 998 offer to compromise, the defendant rejects it, and the judgment beats the offer, interest at ten percent per year runs from the offer date. Without a rejected 998 offer, California does not award prejudgment interest on personal injury damages. This is a litigation tool, not an automatic entitlement.
Cal. Code Civ. Proc. § 340.5 · Cal. Code Civ. Proc. § 364 · Cal. Code Civ. Proc. § 395(a) · Cal. Code Civ. Proc. § 998 · Cal. Civ. Code § 3333.2 (as amended by AB 35, Stats. 2022) · Cal. Civ. Code § 3291 · Li v. Yellow Cab Co., 13 Cal.3d 804 (1975) · Cal. Bus. & Prof. Code §§ 6250–6256
Reviewed September 17, 2026. Legal information, not legal advice.
Request funding for your case.
Pre-settlement funding is a non-recourse purchase of a portion of the proceeds of a pending legal claim — not a loan. If the case does not result in a recovery, nothing is owed. Rates, fees, and repayment terms are disclosed in full in the funding agreement, which the applicant’s attorney reviews before signing. Availability and terms vary by state.