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State Limits on Certain Damages

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States are imposing limits on general or non-economic damages with increasing regularity. This movement is commonly referred to as tort reform. Tort reform refers to any type of law that is passed to change the tort system in the U.S. These laws are commonly statutory limits on certain types of damages in various types of civil litigation. The most common cap put in place is one on noneconomic damages in medical malpractice cases. Tort reform is a hot-button issue in the United States. Those for and against it often get very passionate about their opinions. When a lot of money is at stake, people get testy. Understanding both sides of the issue is the first step towards forming an educated opinion on the matter.Proponents of state statutorily imposed limits on damages are of the mindset that damages are far too erratic and unpredictable. When damages from one jury trial come out as a very low award, then damages from a very similar case come out extraordinarily large in a different jury trial during the same time period, insurance companies have difficulty calculating their risks. Because non-economic damages are very subjective, a jury can come up with a wide array of amounts to any case. Sometimes, juries have a tendency to want to stick it to the bad guy.They know that large companies have a lot of money. For this reason, they will sometimes come up with awards in the number of millions of dollars. Although rare, these instances drive up the cost of professional indemnity and malpractice insurance on professionals. Businessmen and doctors argue that the costs of their insurance become so high that it can be prohibitive. High insurance costs can make it more difficult for a business owner to turn a profit. If smart, dedicated business owners cannot turn profits, the system may be flawed. That type of limitation is bad for the economy as a whole. Advocates of tort reform argue that the legal system wastes resources litigating frivolous cases and they argue that some undeserving lazy plaintiffs make millions of dollars for minor injuries.

Opponents of state-imposed statutory limitations on injury damages argue that those ideas area a bunch of hogwash. It is easy to dispute that many frivolous cases are making a killing. In fact, going through formal litigation is extremely expensive, almost prohibitively so. In order to even risk it, a plaintiff has to be very confident that he or she will succeed. Plaintiff’s attorneys will argue that frivolous cases do not end up getting any compensation at all. They believe that legitimately injured parties are routinely under-compensated because insurance companies know that the victims will want a quick settlement in order to help pay for the costs of being injured.

Opponents of limitations on damages will also argue that the court system was designed to make a jury of our peers the decision-makers. To arbitrarily set a limit of say, $250,000 would be an enormous miscarriage of justice as an award for a victim who had their entire life destroyed by the negligence of another. If a victim is damaged to the extent of a million dollars, (which takes a life-changing amount of harm) why not allow them to recover an amount that will make them whole? Why take the power away from a jury system that has worked in the United States for hundreds of years and give that power to a disconnected few who are paid by lobbyists who are paid by insurance companies who profit by paying out lower amounts so that they can offer lower prices and attract more business? Are we sacrificing the good of one for the small benefit of many? Perhaps.

Both sides of this argument are compelling. Currently, many states do have hard caps set on noneconomic damages. Utah has a cap on noneconomic damages in medical malpractice claims; that cap is currently set at $450,000. If you or a loved one believe you have a possible medical malpractice claim, an attorney can review your claim for free and advise you as to your best course of action.

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This article is offered only for general information and educational purposes. It is not offered as and does not constitute legal advice or legal opinion. You should not act or rely on any information contained in this article without first seeking the advice of an attorney.

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