California’s Uber Liability Deal Signals a New Approach to Tort Reform

By: Anne Marie Ellis, July 7, 2026

Governor Newsom signed SB 623 on June 25, 2026. The law imposes new restrictions on medical lien practices in ride-hailing accident cases while establishing enhanced driver background-check and safety requirements for ride-hailing companies.

This was a negotiated compromise between Uber and the Consumer Attorneys of California that avoided what was shaping up to be a costly ballot measure fight over ride-hailing liability and personal injury litigation. Both sides agreed to withdraw competing ballot initiatives after reaching a legislative solution.

The law includes several notable provisions:

• Limits recovery of certain medical expenses associated with lien-based treatment in ride-hailing accident cases
• Prohibits the sale of medical liens.
• Restricts attorney referrals to medical providers with whom they have close ties.
• Requires annual criminal background checks for ride-hailing drivers.
• Expands the categories of criminal offenses that disqualify individuals from driving for ride-hailing companies.
• Imposes additional safety requirements sought by consumer advocates and trial attorneys.

Notably, the law does not cap attorney contingency fees, a key component of Uber’s original ballot proposal. It is also limited to ride-hailing accidents rather than applying broadly to all California motor vehicle claims.

Why It Matters

Although SB 623 applies only to Uber, Lyft, and similar services, the legislation reflects a growing focus on medical liens, recoverable medical expenses, and litigation-related costs—issues frequently raised in product liability, transportation, and personal injury litigation. The compromise demonstrates how businesses and plaintiffs’ attorneys may use the ballot initiative process as leverage to negotiate targeted liability reforms that might otherwise be difficult to achieve through traditional legislation.

For companies facing significant litigation exposure, the broader takeaway is that California may be providing a new model for addressing recurring liability concerns through negotiated legislative reform rather than all-or-nothing ballot campaigns.

This communication is not intended to create or constitute, nor does it create or constitute, an attorney-client or any other legal relationship. No statement in this communication constitutes legal advice nor should any communication herein be construed, relied upon, or interpreted as legal advice. This communication is for general information purposes only regarding recent legal developments of interest, and is not a substitute for legal counsel on any subject matter. No reader should act or refrain from acting on the basis of any information included herein without seeking appropriate legal advice on the particular facts and circumstances affecting that reader. For more information, visit www.buchalter.com.