Oregon Personal Injury Law 2025: A Comprehensive Guide to Major Legal Changes

Key Takeaways

• Insurance accountability expanded: The Moody decision creates new liability for insurers who violate claims-handling laws—emotional distress and consequential damages are now recoverable beyond policy limits
• Wrongful death caps challenged: Oregon’s $500,000 cap on noneconomic damages faces constitutional scrutiny
• Medical liability narrowed: Senate Bill 1173 shields hospitals from strict product liability for medical devices (effective September 26, 2025)
• Elder protections strengthened: Contract violations against seniors can now constitute financial abuse with treble damages
• Critical deadlines unchanged: Two-year statute of limitations remains; 180-day notice for public body claims is strictly enforced

The Year the Ground Shifted

The year 2025 stands as a watershed moment in Oregon personal injury law. For decades, the legal framework governing torts in this state could be characterized as favoring insurance companies—insurance contracts were strictly limited to policy face values, and the legislature maintained broad authority to cap damages in wrongful death cases. The prevailing wisdom held that these boundaries were settled law.

That certainty has evaporated.

Throughout 2024 and 2025, a convergence of judicial decisions and legislative responses has fundamentally altered the calculus of risk and recovery for both plaintiffs and defendants. The Oregon Supreme Court’s decision in Moody v. Oregon Community Credit Union effectively created a new era of “bad faith” insurance liability. Simultaneously, the historic $500,000 wrongful death cap is teetering on the brink of obsolescence following massive jury verdicts and constitutional challenges now pending before appellate courts.

Yet this expansion of rights has not occurred in a vacuum. In a significant counter-move, the Oregon Legislature passed Senate Bill 1173, erecting a formidable shield around healthcare providers against strict product liability claims—a direct response to massive liability exposure from hospital-acquired infections.

If you or a loved one has been injured in Oregon in 2025, understanding these changes is critical to protecting your rights and maximizing your recovery.

1. The Insurance Accountability Revolution: The Moody Doctrine

What Changed: From Contract to Tort

For nearly 50 years, Oregon followed the Farris v. U.S. Fidelity rule: if your insurance company denied your valid claim in bad faith—even tormented you with delays—your recovery was limited to what they owed you in the first place. Emotional distress damages were barred. This created a “moral hazard” where insurers could deny claims with relative impunity.

The 2023 Moody decision changed everything.

In Moody v. Oregon Community Credit Union, 371 Or 772 (2023), the Oregon Supreme Court held that policyholders can now assert negligence per se claims based on violations of Oregon’s Unfair Claims Settlement Practices Act (ORS 746.230). This statute sets specific standards for how insurers must handle claims. By grounding the duty in statute rather than contract, the Court opened the door to emotional distress damages and other consequential losses—potentially far exceeding policy limits.

How It Works in Practice

Critical Distinction: Moody applies only to first-party insurance claims—that is, claims against YOUR OWN insurance company, not claims against a third party’s insurer.

Under the Moody doctrine, if your insurer violates specific provisions of ORS 746.230, you may have a tort claim for the damages that violation caused. Key violations include:

• ORS 746.230(1)(d): Refusing to pay claims without conducting a reasonable investigation
• ORS 746.230(1)(f): Not attempting in good faith to promptly and equitably settle claims where liability is reasonably clear

Example: You’re rear-ended in a clear liability accident. Your own Uninsured/Underinsured Motorist (UIM) coverage should pay your $50,000 in damages because the at-fault driver has only minimal liability coverage. However, your insurance company makes a lowball $5,000 offer and delays for 18 months without conducting a reasonable investigation. Under Farris, you could only recover the $50,000 you were owed. Under Moody, you may also recover damages for the emotional distress and financial hardship caused by their unreasonable delay and settlement tactics.

The 2024-2025 Expansion

Federal and state courts have systematically expanded Moody beyond its original life insurance context:

Property Damage Claims: In Mohammad v. Liberty Insurance Corp. (D. Or. Oct. 30, 2024), the court held that Moody applies to homeowner’s property loss claims. You don’t need “catastrophic” emotional distress—just foreseeable distress from the statutory violation.

Commercial Claims: In LiquidAgents Healthcare v. Evanston Insurance (D. Or. Oct. 30, 2024), a business sued for lost profits as consequential damages from bad faith claim denial. The court allowed the claim to proceed, suggesting Moody provides a mechanism for recovering any proximately caused damages—not just emotional distress.

No Physical Impact Required: In Hinzman v. Foremost Insurance (D. Or. Mar. 28, 2024), the court ruled that Moody claims don’t require the “physical impact” traditionally needed for Negligent Infliction of Emotional Distress claims. The statutory duty is independent of common law NIED rules.

What This Means for Injury Victims

Remember: Moody applies only to claims against YOUR OWN insurance company (first-party claims), not against the other driver’s insurance (third-party claims).

Every first-party insurance claim now carries “shadow damages”—the potential for substantial awards beyond the policy limits if your insurer violates claims-handling laws. This fundamentally changes settlement dynamics:

• Better leverage: Threat of Moody liability encourages your own insurers to make fair offers earlier
• Discovery rights: You’re entitled to see your insurer’s entire claim file to identify violations
• Higher recovery: Emotional distress and consequential damages can multiply the value of your claim

If your own insurance company is delaying your claim or making unreasonable settlement offers, consult an experienced attorney immediately to preserve your Moody rights.

2. The Battle for the Wrongful Death Cap

The $500,000 Non-Economic Damages Cap

When a loved one is killed by someone else’s negligence in Oregon, state law caps non-economic damages (loss of companionship, society, and comfort) at $500,000—regardless of how devastating the loss. Economic damages (medical bills, funeral costs, lost income) are not capped.

This cap has created a grim legal absurdity: If your family member survives a catastrophic injury (like permanent brain damage), you can recover unlimited noneconomic damages. But if they die from the same negligence, recovery is capped at $500,000.

The Constitutional Challenge

In 2020, the Oregon Supreme Court struck down an identical cap for non-fatal personal injuries in Busch v. McInnis Waste Systems. The Court held that Oregon’s Constitution (Article I, Section 10—the “Remedy Clause”) guarantees the right to full recovery for personal injuries as that right existed in 1857 when the Constitution was adopted.

The defense bar argues wrongful death is different because at common law in 1857, injury claims “died with the person” (actio personalis moritur cum persona). They claim wrongful death is purely a statutory creation, so the legislature can limit it without violating the Constitution.

Plaintiffs counter that this distinction is arbitrary and violates equal protection principles.

The 2025 Battlefield: Estate of Gilbert

The pivotal case is Estate of Gilbert v. The Portland Clinic (Multnomah County). Erric Gilbert, a 43-year-old man, died during a routine colonoscopy due to alleged anesthesia negligence. In late 2024, a jury returned a verdict of $24.6 million, including $20.5 million in noneconomic damages.

The defense immediately moved to reduce the award to $500,000 per ORS 31.710. Judge Steffan Alexander denied the motion, ruling that applying the cap would violate the Remedy Clause.

The case is currently on appeal, and the outcome will likely determine Oregon law for a generation.

The Estate of Ritchie Appeal

A second case, Estate of Ritchie v. Helbig, is already before the Oregon Court of Appeals. The trial court did apply the cap (reducing $2.1 million to $500,000), and oral arguments were held in late 2024. A decision is expected imminently in 2025.

The Workers’ Compensation Exception

Critical Note: The wrongful death cap does not apply if the death occurred in the course and scope of employment. Under Vasquez v. Double Press Mfg. (2019) and ORS 31.710, claims involving workers’ compensation third-party claims are automatically uncapped.

Practice Tip: Always investigate whether the decedent was working at the time of the fatal injury—this status automatically eliminates the cap.

What This Means for Families

Do not accept the $500,000 non-economic damages cap as inevitable. While the law remains in flux:

• Trial courts are increasingly willing to strike down the cap on non-economic damages
• Juries are awarding full damages based on the actual loss
• Experienced attorneys are preparing cases for constitutional arguments at trial and on appeal
• Remember: Economic damages (medical bills, funeral expenses, lost income) are NOT subject to the cap

If you’ve lost a loved one to negligence, consult an attorney who understands these constitutional challenges and will fight for full compensation.

3. The Medical Liability Shield: Senate Bill 1173

The Asante Crisis

The catalyst for Oregon’s most significant medical liability change in a generation was a nightmare scenario: Dani Marie Schofield, a nurse at Asante Rogue Regional Medical Center, allegedly diverted fentanyl from patient IV bags and replaced it with non-sterile tap water. This resulted in severe bacterial infections in dozens of patients, contributing to at least 16 deaths.

Plaintiffs’ attorneys filed massive lawsuits using a creative legal theory: strict product liability. They argued the hospital was a “distributor” of a defective product (the contaminated IV bag). Strict liability is powerful because it doesn’t require proving the hospital was negligent—just that they distributed an unreasonably dangerous product.

The Legislative Response

Faced with potentially catastrophic liability exposure for every defective drug or device administered in Oregon hospitals, the healthcare lobby pushed for Senate Bill 1173. The bill passed in August 2025 and became effective September 26, 2025.

What SB 1173 Does

The law amends ORS 30.902 to explicitly state that physicians, health care facilities, hospital-affiliated clinics, and residential care facilities are not considered “manufacturers, distributors, sellers, or lessors” of a product when they provide it “as part of health care services.”

Key Nuances:

1. Service vs. Sale: When a hospital provides a hip implant during surgery, it’s providing a service, not selling a good. Strict product liability (which applies to sellers) doesn’t apply.

2. The Retail Exception: The immunity does not apply if the facility offers the product to the general public in a retail setting.

   • Example: If you buy crutches from the hospital’s lobby pharmacy, that’s a retail sale. If those crutches fail, strict product liability still applies. But if you receive a knee implant in surgery, the hospital is immune from strict liability for the implant’s failure.

3. Design and Manufacture: The immunity only applies if the provider “was not involved in the design or manufacture” of the product. If a surgeon modifies a device in the OR or the hospital uses 3D printing to create a custom medical device, they may lose the immunity.

4. Effective Date Matters: The law applies to actions commenced on or after September 26, 2025. Cases filed before that date may still pursue strict liability theories.

What This Means for Medical Device Injury Victims

If you were injured by a defective medical device administered in a hospital:

• Cases filed before 9/26/2025: Strict liability against the hospital may still be available
• Cases filed after 9/26/2025: You must prove the hospital was negligent (knew or should have known of the defect, or was negligent in procurement/vetting)
• Manufacturers remain liable: Device makers (Stryker, DePuy, Johnson & Johnson, etc.) can still be sued for strict product liability, though federal preemption defenses may apply

The practical effect: Medical device cases against hospitals are now harder and more expensive to prove, requiring expert testimony on hospital procurement standards.

4. Elder Abuse: Contract Violations as Financial Abuse

An often-overlooked development in 2025 involves the intersection of contract law and elder abuse statutes.

The Adelsperger Doctrine

In Adelsperger v. Elkside Development LLC, the Oregon courts addressed an RV park that revoked “lifetime membership” contracts held by elderly residents, effectively evicting them or dramatically raising their fees.

The Court held that this conduct could constitute financial elder abuse under ORS 124.110, which prohibits “wrongfully taking or appropriating” money or property from a vulnerable person. “Property” includes contractual rights.

Why This Matters: Treble Damages

This transforms a simple breach of contract case into an elder abuse tort. The critical difference: Oregon’s elder abuse statute mandates triple damages and attorney fees.

Example: A landlord wrongfully withholds a $2,000 security deposit from a 75-year-old tenant. Under contract law, the tenant recovers $2,000. As financial elder abuse, the tenant recovers $6,000 plus attorney fees.

Expanding Applications

Attorneys are now using this theory in:

• Landlord-tenant disputes involving elderly renters
• Disputes over reverse mortgages and home equity agreements
• Financial service contracts targeting seniors
• Healthcare billing disputes involving unfair charges to elderly patients

If you’re a senior or have an elderly family member experiencing contract disputes or financial exploitation, this expanded definition of abuse may provide powerful remedies.

5. Auto Insurance: Mandatory PIP Survives Reform Attempt

Despite efforts from the insurance lobby to reduce mandatory benefits, Oregon’s auto insurance structure remains largely unchanged in 2025.

House Bill 3636 Failed

HB 3636 attempted to make Personal Injury Protection (PIP) coverage optional in Oregon. The bill failed in committee in June 2025.

The outcome: Oregon remains a mandatory PIP state. Every auto policy must provide at least $15,000 in no-fault medical coverage. This is a critical safety net, ensuring immediate access to medical treatment without waiting for liability determinations.

Key PIP Rules to Remember

• Two-year benefit period: Oregon PIP medical benefits extend for 2 years post-accident (not 1 year as in older policies)
• First-dollar coverage: PIP pays regardless of fault
• Coordination with health insurance: PIP typically pays before your health insurance
• Stacking rules differ by coverage: : The Oregon Supreme Court’s decision in Batten v. State Farm (2021) largely invalidated ‘anti-stacking’ provisions in separate policies. This means you can often stack limits from multiple separate UM/UIM policies (e.g., separate policies for different household vehicles) to increase your total available coverage. Note that insurers have responded by attempting to consolidate all household vehicles onto a single policy, where stacking remains easier for them to restrict.

Diminished Value Claims

With vehicle values remaining elevated in 2025, Diminished Value (DV) claims remain viable. Even if your car is perfectly repaired after an accident, its resale value drops due to the accident history showing on Carfax.

You can assert DV claims against:

• The at-fault driver’s liability carrier
• Your own Uninsured Motorist Property Damage (UMPD) coverage

6. Critical Deadlines: The Statute of Limitations

While substantive law has shifted dramatically, procedural deadlines remain strictly enforced and can be claim-killers.

The General Two-Year Rule

Oregon’s statute of limitations for most personal injury claims is two years from the date of the injury (ORS 12.110). This is not a deadline to settle—it’s a deadline to file a lawsuit.

If you miss this deadline by even one day, your claim may be permanently barred. The court will dismiss your case regardless of how strong your evidence is or how severe your injuries are. There are important exceptions to consider.

The 180-Day Public Body Trap

Claims against “public bodies” (state agencies, cities, counties, school districts) require a Tort Claim Notice within 180 days of the injury (ORS 30.275).

Common Trap: Many people don’t realize that OHSU doctors are public employees. A medical malpractice claim against an OHSU surgeon has a 180-day notice deadline, not the standard two-year limitation.

Missing this deadline is fatal to your claim.

Key Exceptions and Nuances

1. Discovery Rule: The clock may not start until you “discover” the injury and its connection to negligence. However, courts have held that mere suspicion is sufficient to trigger the statute—you don’t need a confirmed diagnosis.

2. Minors: The statute is typically “tolled” (paused) until a minor turns 18, giving them two years from their 18th birthday to file.

3. Wrongful Death: The limitations period for wrongful death is three years from the date of the injury causing death (not necessarily the date of death).

2025 Public Body Cap Adjustments

As of July 1, 2025, liability caps for public bodies increased:

• State agencies: ~$2.5 million per claimant / ~$5 million aggregate
• Local governments: ~$840,000 per claimant / ~$1.7 million aggregate

These cap amounts are rooted in sovereign immunity and are not subject to the constitutional challenges facing the wrongful death cap.

7. Emerging Trends: Employment Law Intersections

The “Cat’s Paw” Doctrine

In Crosbie v. Asante (2025), the Oregon Supreme Court validated the “cat’s paw” theory of liability. This employment law doctrine allows plaintiffs to hold employers liable for the bias or negligence of subordinate employees who influence a decision-maker.

Personal injury application: In corporate negligence cases, this helps prove that a company is liable for ignoring safety warnings from ground-level employees, even if upper management was unaware of specific hazards.

Paid Leave Oregon (PLO) and Collateral Sources

With Paid Leave Oregon now fully operational, a new settlement issue has emerged: Are PLO wage-replacement benefits a “collateral source” that defendants cannot use to reduce verdicts?

Current strategy: Plaintiffs argue PLO benefits are like health insurance—paid for through employee payroll taxes—and thus protected under ORS 31.580. The state may assert a lien to recover benefits paid, creating a new layer of settlement complexity.

8. What These Changes Mean for Your Claim

If Your Insurance Company Is Being Difficult

The Moody decision gives you powerful new leverage:

• Document everything: Every interaction, delay, and unreasonable offer may be evidence of a statutory violation
• Request the claim file: You’re entitled to see what the insurer knew and when
• Don’t accept lowball offers: The threat of emotional distress and consequential damages often brings insurers to the negotiating table with fair offers
• Consult an attorney early: Moody claims require sophisticated legal analysis and evidence preservation

If You’ve Lost a Loved One to Negligence

Do not assume the $500,000 cap is the final word:

• Trial courts are striking down the cap based on constitutional grounds
• Juries are awarding full damages
• Cases are pending on appeal that could eliminate the cap permanently
• Workers’ compensation cases are automatically uncapped

Work with an attorney who will fight for full compensation, not accept artificial limits.

If You’ve Been Injured by a Medical Device

Timing matters critically:

• Cases filed before September 26, 2025, may still pursue strict liability against hospitals
• Cases filed after require proof of hospital negligence
• Manufacturers remain strictly liable regardless of filing date

If You’re a Senior Facing Financial Exploitation

Contract violations may now constitute elder abuse:

• Wrongful evictions
• Security deposit disputes
• Unfair billing practices
• Breach of lifetime care agreements

These claims can result in treble damages and attorney fees.

9. Common Questions About 2025 Law Changes

Will insurance companies actually pay more under Moody?

This has yet to be seen as insurance companies are still deciding if they will be changing their behaviors to address Moody. The coming year should shed more light on this area.

When will we know if the wrongful death cap is unconstitutional?

The Ritchie v. Helbig Court of Appeals decision is currently pending (oral arguments were held in December 2024). A ruling could arrive in early 2026. Regardless of the outcome, the case will almost certainly be appealed to the Oregon Supreme Court, meaning a final resolution is likely still 1–2 years away.

Does SB 1173 protect doctors from malpractice claims?

No. SB 1173 only shields healthcare providers from strict product liability for medical devices and drugs. Traditional medical malpractice claims (negligent surgery, misdiagnosis, medication errors, etc.) are completely unaffected.

Can I still recover if the at-fault driver has minimal insurance?

Yes, through multiple avenues:

• Your own Uninsured/Underinsured Motorist (UM/UIM) coverage
• Moody claims against your own insurer if they improperly handle the claim
• Personal assets of the at-fault driver (though often limited)

10. Why Legal Representation Matters More Than Ever

The 2025 legal landscape is more complex and more volatile than at any time in recent Oregon history. Insurance companies are simultaneously facing new exposure (Moody) while trying to exploit narrow windows (SB 1173 timing, statute of limitations traps).

An experienced Oregon personal injury attorney can:

• Identify all available sources of recovery
• Navigate the tension between competing insurance policies
• Preserve Moody rights through proper claim-file discovery
• Challenge the wrongful death cap with constitutional arguments
• Ensure you don’t miss critical filing deadlines
• Maximize recovery by calculating all economic and non-economic damages

Most personal injury attorneys work on a contingency fee basis—you pay nothing unless you win.

Don’t Navigate These Changes Alone

If you or a loved one has been injured in Oregon in 2025, you’re facing a legal environment that is fundamentally different from just two years ago. The rules have changed—often in your favor, but only if you know how to use them.

Johnson Law, P.C. stays at the forefront of these developments. We actively litigate Moody expansion claims, challenge wrongful death caps, and understand the nuances of SB 1173’s effective date. We know which doors have opened and which have closed.

Contact us today for a free consultation to discuss your case and ensure you’re taking full advantage of Oregon’s evolving personal injury laws.

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Summary Table: 2025 Oregon Personal Injury Law Changes

Looking Ahead: What to Watch in 2026

The legal landscape will continue to evolve. Key developments to monitor:

• Oregon Supreme Court review of wrongful death cap cases
• Expansion or limitation of Moody doctrine through additional case law
• Legislative response to Gilbert verdict and appellate decisions
• Federal preemption challenges in medical device cases
• PLO lien and subrogation regulations from the state

One thing is certain: 2025 has fundamentally reshaped Oregon personal injury law, and injury victims who understand these changes—and work with attorneys who do—will be in the strongest position to secure full and fair compensation.

This article provides general information about Oregon personal injury law changes in 2025 and should not be construed as legal advice for your specific situation. Laws change frequently, and the application of these principles depends on the unique facts of each case. If you’ve been injured, consult with an experienced Oregon personal injury attorney to understand your rights and options.

Published: December 12, 2025