Gov. Mark Sanford on Monday signed into law a bill limiting the amount of money victims of medical mistakes can be awarded in malpractice lawsuits.

"What this bill is fundamentally about is lowering the cost of medicine," Sanford told about 100 people gathered outside Roper Hospital's emergency room entrance in downtown Charleston. "It's fundamentally about having medicine practiced by doctors, not by lawyers."

Roper is home to some of the loudest voices in the growing chorus in recent years calling for caps on damages as medical malpractice rates have soared in South Carolina and elsewhere.

The new law limits punitive damages -- those due to non-economic factors such as pain and suffering -- to $350,000. The cap can go as high as $1.05 million if additional doctors and hospitals are involved. With Sanford's signature, South Carolina joins 28 other states that have embraced similar caps.

"This is a great day for patients," said Dr. Dawn Clancy, an internal medicine physician at MUSC. "It will make this, again, one of the best places to practice medicine in the country."

Critics said Monday wasn't so great a day for patients. They said the new law will significantly weaken the best, and many times only, defense patients have against medical errors.

"I've never been so devastated," said Drew Untener, a 52-year-old Charleston resident who attended Monday's bill-signing. "Sanford is just there for the insurance companies and the doctors."The act sets the same lawsuit limits for nursing homes that it does physicians. It also encourages out-of-court settlements by penalizing the party rejecting the settlement if the jury awards damages to the other side.

In addition, the new law protects emergency-room and trauma doctors from liability in emergency cases.

It does not place caps for any situation in which the doctor is grossly negligent. And there are no caps for economic damages.

Physicians hope the changes will help bring malpractice rates under control. Although rates in South Carolina remain some of the lowest in the nation, general surgeons have seen their premiums grow five-fold in the last few years. Obstetricians have also seen their payments skyrocket at a similar rate, with some specialists paying as much as $60,000 a year for malpractice insurance.

Although the overall number of doctors practicing in South Carolina has increased in recent years, physicians contend the trend has prompted some specialists to leave the state, retire early or limit their practice. They also believe the cap is necessary to keep them from practicing "defensive medicine," or ordering extra tests that may be unnecessary yet are given out of fear of a lawsuit.

Convinced that caps were the only way to eliminate this problem, doctors began to protest, staging rallies in Columbia over the past few years.

Last year, Dr. Chris Hawk, a Roper surgeon, generated national headlines after he proposed that the American Medical Association tell doctors it was not unethical to avoid treating trial lawyers who file medical malpractice lawsuits. The AMA rejected Hawk's suggestion.

For years, efforts to get a cap passed met with little success because a malpractice reform bill could not make it past the state Senate. This year was different. The Senate approved the measure in February. Two weeks later, the House passed the bill. On Monday, after the two chambers reconciled their respective versions of the bill, the governor signed it into law.

State Senate President Pro Tem Glenn McConnell, R-Charleston, said the November elections put more senators in office who favor lawsuit limits. He also said that a change in Senate rules reducing the number of senators needed to kill a filibuster also led to his chamber's approval.

Despite the new caps, no one believes malpractice premiums will go down.

"The goal is to stabilize rates," Hawk said Monday.

"It's not realistic to lower rates. We just want to stop the escalation."

Others maintain that the new law will do nothing to keep insurance companies from raising their malpractice premiums. They say that insurance companies' investment losses are the real reason that malpractice rates have been going up.

"I'm sorry that the people of South Carolina have been so betrayed by the insurance industry, and I'm sorry for the doctors who've been victimized by the insurance industry," said Ken Suggs, vice president of the American Trial Lawyers Association and a Columbia malpractice attorney. "It won't do a thing for doctors."

Sanford, however, noted that the cap should encourage more malpractice insurers to do business in South Carolina. A more competitive market, the governor said, should mean a leveling off of rates, if not a reduction.

Sue Berkowitz, executive director of the South Carolina Appleseed Legal Justice Center and one of the state's most visible advocates for the poor, said she worries the new law will mean that those seriously injured by a medical mistake won't get enough to care for their needs.

"I really hope doctors see their insurance rates come down," she said.

"If they don't, it will be a real shame."