California Governor Gavin Newsom signed Senate Bill 623 into law on Thursday, instituting new regulations to curb inflated medical billing in lawsuits related to ride-hailing car crashes. The legislation represents a negotiated compromise reached after months of contentious debate and averts a potentially divisive ballot battle scheduled for the November elections involving Uber and the state’s trial attorneys.
The law targets a common practice in personal injury cases where doctors provide treatment on a lien basis, meaning their fees are paid from lawsuit settlements rather than insurance claims. Uber and its supporters argue that this system has incentivized collusion between healthcare providers and attorneys to artificially inflate medical bills, thereby increasing the settlement amounts and legal fees they receive.
Under the new rules, medical charges for patients involved in lawsuits against ride-hail companies will face capped rates. The statute also mandates enhanced background checks for ride-hail drivers, requiring annual screenings and broadening the list of offenses that disqualify individuals from working in the industry. These measures will take effect for accidents occurring on or after January 1, 2027.
Nicholas Rowley, a national attorney involved in the negotiations, expressed optimism that the reforms will enhance safety for both patients and ride-hailing passengers. Uber’s western U.S. public policy head Ramona Prieto described the legislation as a step toward greater transparency and accountability in the medical lien system.
The deal ends a costly and high-profile campaign by both sides. Over the past several months, Uber and California’s trial lawyers invested tens of millions of dollars in dueling ballot initiatives. Uber initially proposed limiting attorneys’ fees in auto accident cases to curb what it described as unethical practices by lawyers inflating claims. In response, trial attorneys countered with a measure to increase legal liability for ride-hail firms in cases involving sexual assault during rides, citing reports of such incidents in Uber vehicles.
Douglas Saeltzer, leader of the Consumer Attorneys of California, criticized Uber’s efforts as motivated more by protecting corporate interests than victims. The trial attorneys’ measure would have imposed significant new liabilities on ride-hail companies. Both groups agreed to withdraw their ballot initiatives following passage of the new law.
The legislation, sponsored by Assemblymember Diane Papan (D-San Mateo) and Senator Tom Umberg (D-Orange), also addresses third-party investors who purchase doctors’ liens in personal injury cases. These investors buy the liens at discounted rates and collect full settlements, a practice the bill aims to restrict to prevent excessive profits flowing to private equity and hedge funds.
In a related development, Uber filed lawsuits last year against two prominent Los Angeles personal injury firms—the Law Offices of Jacob Emrani and Downtown L.A. Law Group—accusing them of inflating medical bills and pressuring clients into unnecessary surgeries to increase claim values. The firms have denied wrongdoing and sought dismissal, arguing Uber failed to substantiate fraud claims. Uber’s outside counsel said the litigation targets specific fraudulent actors rather than the broader plaintiff bar, but Emrani’s attorney characterized the suit as an attempt by a large corporation to intimidate lawyers and hinder consumer claims.
With the legislation now signed, California’s regulatory framework for ride-hailing crash litigation is set to change significantly, aiming to balance the interests of accident victims, healthcare providers, lawyers, and companies operating in the fast-growing shared mobility sector.