This article uses the tools of law and economics analysis to assess the recent evolution in liability concerning medical malpractice. This evolution has led to the insurance crisis that France has experienced following the 2002 Kouchner law and that the US is still suffering from. What is at stake is greater safety in real medical practice, through the setting up of a decentralized regulation system. Courts and insurance companies are now in charge of designing safety and quality standards and of reducing healthcare costs. Law and economics allows estimation and discussion of the expected economic consequences of medical liability rules. According to economic literature, applying the negligence rule is justified by its promotion of appropriate prevention implemented by physicians, the resulting low administrative costs, the specificity of the medical profession and the existence of asymmetric information in the care contract. Despite the fact that theoretically it is not possible to insure for medical malpractice, insurance is nevertheless considered as a private system of liability law. Indeed, the insurance industry has written up specific contracts: they do not require deductibles, premiums are based on medical specialization or on location. The law and economics basic model concludes that, if the definition of the standard of care is based on efficiency, there should be no negligence, no claim and no demand for insurance. A number of authors have expressed doubts about the definition of the standard of due care and they point out the costs induced by defensive medicine and growing lawyerization. This demonstrates that the negligence rule for medical malpractice is irrelevant and calls for reforms of medical malpractice legal rules. Extending liability to hospitals may solve the physician?s judgement proof problem. This risk may become insurable and defensive medicine may decline, provided that amounts are limited and statutes of limitations are set.