delivered the opinion of the Court.
Helena E. Blanchfield, the appellee, filed a declaration in the Circuit Court for Prince George’s County in which she alleged that she had suffered damages as the result of the medical malpractice of Lewis H. Dennis, M.D., the appellant, and his associate, David J. Haidak, M.D. Following a trial before a jury, a verdict in the amount of $800,000.00 was returned in favor of Mrs. Blanchfield against Dr. Demñs. 1 The verdict was reduced to $400,000.00 through remittitur, and final judgment in that amount was entered on February 13,1980. On March 10,1980, Dr. Dennis moved for a new trial under Md. Rule 625 b alleging that certain evidence had been discovered subsequent to the entry of judgment; the motion was denied.
The record shows that Mrs. Blanchfield, a 43 year old divorcee and mother of four, was referred to Dr. Dennis in early 1976, after she had begun to experience blurred vision. She was hospitalized and various tests were conducted; thereafter, on March 23,1976, Dr. Dennis informed her that she was suffering from multiple myeloma, a form of cancer. Mrs. Blanchfield testified that Dr. Dennis informed her that her cancer was incurable, that she had at most one year to live, and that it would be advisable that she "get her affairs in order.” Because Dr. Dennis advised her that it might prolong her life somewhat, Mrs. Blanchfield underwent chemotherapy from March 23 to April 27, 1976. The chemotherapy was discontinued because of the severity of the side effects. After the discontinuance of the chemotherapy, Mrs. Blanchfield continued to make regular visits to Dr. Dennis’ office for blood tests; the last such visit occurred on August 3, 1976, when it was proposed that Mrs. Blanchfield undergo a liver biopsy so that it could be deter *327 mined whether the cancer had spread to that organ. At the urging of her children, Mrs. Blanchfield refused the biopsy and sought admission to the Memorial Sloan-Kettering Cancer Center in New York. Admitted on August 19, 1976, she remained there, undergoing examinations and tests, until September 8,1976, at which time she was released and advised that she was not then, nor had she ever been, suffering from multiple myeloma or any other form of cancer. She filed suit against Drs. Dennis and Haidak on June 23, 1977.
Medical experts, including Dr. Haidak, who was called as an adverse witness by Mrs. Blanchfield, testified that Dr. Dennis, in his diagnosis and treatment of Mrs. Blanchfield, did not conform to acceptable standards of professional care, specifically, that he lacked a sufficient basis for his diagnosis and for instituting chemotherapy and other forms of treatment. Dr. Haidak also testified, over objection, that he terminated his association with Dr. Dennis in September, 1976, one month after Mrs. Blanchfield’s final visit, and that Dr. Dennis’ treatment of Mrs. Blanchfield was one of the faсtors which contributed to his decision to leave the practice.
Evidence was presented which supported Mrs. Blanchfield’s claim that Dr. Dennis’ erroneous diagnosis and treatment had caused her physical and mental suffering. She testified that the chemotherapy caused nausea, vomiting, diarrhea, and weakness. She further testified that the treatment caused an uncomfortable dryness of the mouth, nose, and eyes, and thаt she still suffered from this condition at the time of trial. There was medical testimony that, in addition to the physical discomfort, the needless administration of chemotherapy had increased the odds that she would one day develop a true malignancy. Mrs. Blanchfield testified that the diagnosis and treatment had caused her to become extremely nervous and that she had lived for months in a state of severe depression; she stated that she suffered from chronic memory loss, an inability to concentrate, "head swims,” and nightmares. A psychiatrist testified that she suffered from "anxiety depressive *328 reaction,” that this condition had been caused by the improper diagnosis and treatment, and that she would require some two years of psychotherapy to alleviate her condition. It was also testified, that during the period when she believed her death to be imminеnt, she broke off her engagement to be married and was forced by the side effects of the chemotherapy to quit her job as a school bus dispatcher. She testified that she had been unable to regain this job and that, as a result, she had lost wages.
I Arbitration
Dr. Dennis filed a timely motion raising preliminary objection, on the grounds that Mrs. Blanchfield’s action was barred by her failure to submit her claim to arbitration under the Health Care Malpraсtice Claims statute ("HCMCS”), Md. Cts. & Jud. Proc. Code Ann. §§ 3-2A-01, et. seq. Dr. Dennis contends the trial court erred in denying his motion.
The HCMCS was enacted as § 1 of Chapter 235, Laws of Maryland, 1976, a comprehensive piece of legislation intended to alleviate a perceived crisis in Maryland in the area of medical malpractice insurance. 2 It makes submission to non-binding arbitration a condition precedent to the filing of an action for damages for medical malpractice, stating:
"All claims, suits, and actions, ... by a person against a health care provider for medical injury allegedly suffered by the person in which damages of more than $5,000 are sought are subject to and shall be governed by the provisions of this subtitle. An action or suit of that type may not be brought or pursued in any Court of this State except in accordance with this subtitle. An action in which damages of $5,000 or less are sought is not subject to the provisions of this subtitle.” Md. Cts. & Jud. Proc. Code Ann. § 3-2A-02.
*329
See, Bishop v. Holy Cross Hospital,
Dr. Dennis’ first argument is that HCMCS was intended by the legislature to apply to all malpractice actions pending on July 1, 1976, the effective date of the statute, or pursued thereafter, regardless of when the medical injury occurred. He reasons that Chapter 235, § 5, which we have set forth abovе, was intended to limit only the application of the "substantive” sections of the Act, §§ 2 and 3, and not the application of § 1, the HCMCS, and that, as the HCMCS is "procedural,” it must be given retroactive as well as prospective effect. He would have us conclude that Mrs. Blanchfield’s action in the Circuit Court, filed on June 23, 1977, was barred by the HCMCS, as an action "brought or pursued” after the effective date of the statute, regardless of when Mrs. Blаnchfield’s claimed medical injuries occurred. Alternatively, Dr. Dennis argues that, assuming that the application of the HCMCS is limited by § 5, Mrs. Blanchfield was nevertheless required to submit her claim to arbitration because that claim was for injuries which occurred prior to, on, and subsequent to the effective date of the Act. Drawing an analogy to the "continuing course of treatment” rule employed in interpreting statutes of limitations in malpractice cases, 3 he argues that, as Mrs. *330 Blanchfield continued to be under his care and treatment until August 3, 1976, at least some of the medical injuries alleged occurred subsequent to the effective date of the HCMCS.
We find the arguments unpersuasive. In
John McShain, Inc. v. State,
*331 II Admissibility of Evidence
As we stated above, Dr. Haidak, Dr. Dennis’ former аssociate and co-defendant, was permitted to testify, over objection, that he terminated his practice with Dr. Dennis in September, 1976. He was asked, again over objection: "Did the care and treatment that was accorded to this lady by Dr. Dennis have anything to do with your severing your business relationship with him?” He answered: "I think that it reflected a difference of philosophy in how to manage patients and how to run an office. And in that sense it did contribute to my — eventually to my leaving the practice.” Dr. Dennis argues that the admission of this testimony was error. If this were error it was not prejudical. Dr. Haidak testified that in his opinion Dr. Dennis’ treatment of Mrs. Blanchfield was below acceptable medical standards. Even without the testimony, to which there was objection, the jury would doubtless have inferred that the two were no longer associated and that the mistreatment of Mrs. Blanchfield was at least one of the reasons.
Ill Reduction to Present Value of Future Damages
Dr. Dennis noted several exceptions to the court’s instructions as to damages. The first exception was to the court’s refusal to instruct the jury that it should reduce to present value any damages awarded to Mrs. Blanchfield for loss of future earning capacity. He contends that this failure was error.
There exists considerable authority in other jurisdictions to support Dr. Dennis’ сontention.
4
See, e.g., Osborne v. Bessonette,
That some doubt exists as to the correct rule to be applied in personal injury cases in Maryland is largely attributable to the presence of certain language in the opinion of the Court of Appeals in
Hutzell v. Boyer,
The significance of the language used in
Hutzell
and the exact nature of its holding have never been madе clear. Although we stated in
Lumber Terminals v. Nowakowski,
"By the same token, characterization of the rule as not customary in non-death cases does not mean it is any less the law in such cases. An analysis of the reason for the rule requiring reduction of damages to present value in death cases makes clear that the same principles should apply in non-death cases. There is neither reason nor logic in an argument that it is error not to give the present value instruction in a death case, but error to grant such an instruction in a total and permanent injury case. .. .”
In a similar vein, we commented in
Lumber Terminals v. Nowakowski,
We are of the opinion that, if the issue were before it, the Court of Appeals would hold that it is reversible error to refuse to instruct the jury in a personal injury action that they are to reduce to present value any damages awarded for the loss of future earning capacity. We now so hold. 5
*334
Mrs. Blanchfield argues that such an instruction was not required here because, she asserts, her claim was for wages lost up to the time of trial, not for earnings which would be lost in the future.
See generally, Adams v. Benson,
IV Instruction That Damages Are Free of Income Taxes
At trial, Dr. Dennis requested that the jury be instructed as follows: "Any damages awarded to plaintiff are not income to her within the meaning of federal and state income tax laws, and no income tax will be owed or paid thereon.” The court below declined to give the requested instruction and Dr. Dennis excepted.
In support of his contention that the trial court erred in dеclining to give the tax instruction, Dr. Dennis relies principally upon
Norfolk and Western Railway Co. v. Liepelt,
"Section 104(a)(2) of the Internal Revenue Code provides that the amount of any damages received on account of personal injuries is not taxable *335 income. The section is construed to apply to wrongful death awards; they are not taxable income to the recipient.
"Although the law is perfectly clear, it is entirely possible that the members of the jury may assume that a plaintiffs recovery in a case of this kind will be subject to federal taxation, аnd that the award should be increased substantially in order to be sure that the injured party is fully compensated. The Missouri Supreme Court expressed the opinion that '[i]t is reasonable to assume [that many] jurors [will] believe [that its verdict will] be subject to such taxes.’ Dempsey v. Thompson,363 Mo. 339 , 346,251 S.W.2d 42 , 45 (1952). And Judge Aldisert, writing for the Third Circuit, agreed:
'We take judicial notice of the "tax consciousness” of the American public. Yet, we also recognize, as did the court in Dempsey v. Thompson,363 Mo. 339 ,251 S.W.2d 42 (1952), that few members of the general public are aware of the special statutory exception for personal injury awards contained in the Internal Revenue Code.
' "[T]here is always danger that today’s tax-conscious juries may assume (mistakenly of course) that the judgment will be taxable and therefore make their verdict big enough so that plaintiff would get what they think he deserves after the imaginary tax is taken out of it.”
'II Harper & James, The Law of Torts § 25.12, аt 1327-1328 (1956),’ (Footnote omitted.) Domeracki v. Humble Oil & Refining Co.,443 F.2d 1245 , 1251 (CA3 1971), cert. denied,404 U.S. 883 ,92 S. Ct. 212 ,30 L. Ed. 2d 165 .
"A number of other commentators have also identified that risk.
"In this case the respondents’ expert witness computed the amount of pecuniary loss at $302,000, plus the value of the care and training that dece *336 dent would have provided to his young children; the jury awarded damages of $775,000. It is surely not fanciful to suppose that the jury erroneously believed that a large portion of the award would be payable to the Federal Government in . taxes and that therefore it improperly inflated the recovery. Whether or not this speculation is accurate, we agree with petitioner that, as Judge Ely wrote for the Ninth Circuit,
'To put the matter simply, giving the instruction can do no harm, and it can certainly help by preventing the jury from inflating the award and thus overcompensating the plaintiff on the basis of an erroneous assumption that the judgment will be taxable.’ Burlington Northern, Inc. v. Boxberger,529 F.2d 284 , 297 (CA 9 1975).” (Footnotes omitted.)444 U.S. at 496 ,100 S. Ct. at 759 .
We note that the rule adopted by the Supreme Court in
Liepelt
is contrary to the weight of authority in the states.
See, e.g., Vasina v. Grumman Corp.,
The issue is one of first impression in Maryland. Although we have previously addressed, in
Lumber Terminals v. Nowakowski,
Although the
Liepelt
holding is binding only in FELA cases, its reasoning is persuasive. Undoubtedly today’s juries are tax-conscious in making their awards,
see, e.g., Towli v. Ford Motor Co.,
V Miscellaneous
Dr. Dennis presents two additional contentions, of which only brief mention need be made. At trial, actuarial tables were introduced which showed that a woman of Mrs. Blanchfield’s age had an additional life expectancy of 31.4 years. In its instructions to the jury, the court below, referring to those actuarial tables, stated that "the life tables ... indicate that this lady has a life expectancy of 31.4 years.” Correctly nоting that such tables state the life expectancy of an average person of a specified age and not
*338
the life expectancy of any particular individual,
see, Simco Sales Service of Maryland, Inc.
v.
Schweigman,
Dr. Dennis also contends that the court below abused its discretion in denying his motion for a new trial, filed, pursuant to Md. Rule 625b, on the grounds that certain evidence had been newly discovered. This evidence consisted of a report filed by Mrs. Blanchfield’s employer with the Workmen’s Compensation Commission which, Dr. Dennis contended, indicated that certain symptoms and ailments of which Mrs. Blanchfield complained, and which she attributed at trial to the negligent diagnosis and treatment by Dr. Dennis, were in fact attributable to a pre-existing condition.
Whether the misstatement by the trial court concerning the actuarial tables constituted reversible error and whether the court abused its discretion in denying the motion for a new trial, we need not decide. The instruction to which Dr. Dennis excepted concerned the issue of damages and the newly discovered evidence, as proffered, also concerned the issue of damages. As we hold that a new trial on the issue of damages is necessary, because the jury was not properly instructed conсerning the reduction to present value and the non-taxability of the damages awarded, we need not address these additional contentions.
Judgment vacated.
Case remanded to the Circuit Court for Prince George’s County for a new trial limited to the issue of damages.
Costs to be equally divided.
Notes
. At the close of her case, Mrs. Blanchfield acquiesced in the entry of a directed verdict in favor of Dr. Haidak.
.
See generally,
Attorney General v. Johnson,
.
See,
Decker v. Fink,
. In Chesapeake and Ohio Railway Co. v. Kelly,
. In the absence of expert testimony, the trial court could, of course, require counsel requesting the instructions to produce appropriate tables before the matter could be judicially noticed.