Freedom From Unnecessary Litigation Act of 2005

The Freedom From Unnecessary Litigation Act of 2005 (H.R. 3076) was a legislative proposal designed to change how medical malpractice and surgical complications are handled under the tax code. The bill sought to encourage the use of private insurance and alternative dispute resolution rather than traditional lawsuits.

Specifically, the bill would have:

Provided a tax credit* to individuals who purchase insurance specifically to cover the costs of a "negative outcome" from surgery, including complications resulting from medical malpractice.

Exempted from federal income tax* any money awarded to a patient through binding arbitration in a medical malpractice case.

For the average citizen, this bill aimed to make it more financially attractive to resolve medical disputes outside of the court system and to provide a tax-advantaged way for patients to protect themselves against surgical risks. Introduced in June 2005, the bill did not advance past the committee stage and never became law.