Non-Economic Damages Caps

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 How to Ensure Non-economic Damages Remain Fair?

The legal system provides a way for the public to receive compensation for their pain and suffering, which is considered non-economic damage. The legal community consisting of providers, patients, lawyers, and judges are in agreement with this.

Health care injury cases in particular involve several non-economic damages. Besides the monetary compensation awarded to the plaintiffs in the medical injury lawsuits, there has to be compensation awarded for the pain and suffering caused by these injuries.

In some situations, medical expenses can rise rapidly. With the help of medical insurance, the injured party, will end up paying some of these costs out of pocket. Medical liability insurance premiums and medical product liability costs skyrocket without a ceiling on non-quantifiable losses. This causes access to healthcare to diminish significantly and causes a negative spiraling effect.

How to Maintain Fair Non-economic Damages Caps?

Maintaining a cap for noneconomic damages allows insurance companies to allocate a feasible amount to cover. For instance, a $250,000 cap on non-economic loss makes the insurance risk manageable. It further stabilizes the insurance market and provides affordable coverage. This allows health providers to have a pool of money available to cover the costs of the losses fully.

Jurisdictions vary in terms of how they cap the damages. There is a difference in whether or not the state caps the damages altogether. You can determine what your state does for this by researching the local state regulations. Remember that some states cap economic damages only, some cap non-economic damages only, some cap both, and some neither.

Also, some states do not include certain cases in their caps. The validation of the caps has been challenged constitutionally in the states. The states have made conclusions about this, and some states have struck down their own damages caps after a violation was discovered.

Below is a breakdown of how the states cap certain types of cases. There are caps for non-economic damages in tort and personal injury claims for the following states. These states include Alaska, Colorado, Hawaii, Idaho, Kansas, Maryland, Mississippi, Ohio, Oklahoma, Oregon, and Tennessee. The caps on product liability or medical malpractice claim damages are more widely accepted.

Moreover, there are caps for state product liability and medical malpractice lawsuits. There are more states that cap damages in product liability claims, medical malpractice claims, or both. The states where non-economic damages in personal injury claims are capped are Alaska, Colorado, Idaho, Kansas, Michigan, Maryland, Mississippi, Ohio, Oklahoma, Oregon, and Tennessee.

Medical malpractice claims have the most commonly capped damages among the fifty states. Twenty-six states cap non-economic damages in medical malpractice claims, while six have “total caps” limiting economic and non-economic compensation: Colorado, Indiana, Louisiana, Nebraska, New Mexico, and Virginia.

Although an overview of state damages caps provides a sense of the caps permitted in the state and for which cases. However, this information does not provide any insight based on these caps, and you would need to research the non-economic damages laws through to learn more about them.

Hawaii is one of those states that defines, what encompasses non-economic damages. For instance, personal injury cases are only limited to “pain and suffering.”

Unfortunately, other kinds of non-economic damages, for instance, trauma or permanent disability, will not be covered by the cap. Furthermore, Colorado has two distinct medical malpractice damages caps. First is a cap on non-economic damages, then a “total” cap covering both economic and non-economic damages in a medical malpractice claim.

Also, Oregon established its cap on non-economic damages in personal injury claims. However, the laws were challenged in court for constitutional validity. As with any other matter of state law, understanding a particular state’s damages caps is crucial in any tort claim.

What Is Considered an Unconstitutional Cap for Non-economic Damages?

Most states have examined their caps and determined their constitutionality for application. For instance, Florida, Illinois, New Hampshire, and Washington courts have determined that the state’s previous attempts to limit damages violated some provisions of the states’ respective constitutions. Furthermore, Alabama and Georgia have had their medical malpractice damages caps invalidated in state courts. However, some states restrict damage caps’ use in personal injury cases. For example, the following five states ban caps on damages in general torts claims: Arizona, Arkansas, Kentucky, Pennsylvania, and Wyoming.

Why Impose the Caps?

There are several reasons why damage caps should be imposed. Local states and federal governments need to collaborate on what could serve as a national cap to create uniformity in the system. One of the most common reasons to use the caps is to lower medical malpractice insurance premiums for healthcare providers. The insurance companies do not want to pay much for medical malpractice insurance.

The large payouts in the medical malpractice settlements dealing with noneconomic damages have resulted in this. Some insurers have refused to provide more coverage for this because it has become exponentially costly. Therefore, formulating a liability cap can help everyone in the long run.

According to HG Legal Resources, no reliable data supports the connection between non-economic damage caps and decreases in medical malpractice insurance premiums. However, the American Bar Association (ABA) took a stance against enforcing a national cap because of the lack of evidence showing this connection in the medical community. The agencies want to shift focus into reforming insurance policies that help lower the overall costs of medical malpractice insurance than those that have only implemented damage caps.

However, critics of the caps say that non-economic damage caps protect the person responsible for committing the wrong. Parties causing harm should be financially held responsible for their wrongdoing. They argue that the state removes personal responsibility from liable healthcare providers by placing caps on the value of an injured person’s claim. Essentially, it fails to safeguard the general public from the possibility of receiving the same negligent care.

The main issue is that the damage caps harm the person it is designed to protect, the injured party. They place a monetary value on something that cannot be measured. Pain and suffering resulting from the injury cannot be quantified. The damage caps disproportionately impact those who have suffered the injuries. They are the ones who will have endured losses that go beyond their medical bills and lost wages.

Non-economic damage’s purpose is to ensure those hurt the most are fairly compensated for all of their non-financial losses. Each accident results in a spiral effect, emotionally impacting many loved ones too. Although the economic losses may be minimal, there can be no measure of emotional distress caused by the incident. The non-economic damages caps reiterate these people’s emotional well-being should meet a certain threshold, and accordingly, the non-economic damages caps are set.

When Do I Need to Contact a Lawyer?

There are both advantages and disadvantages to having a cap on non-economic damages. As stated earlier, there are critics on both sides of the issue. The main purpose of the caps is to keep it manageable for the insurance industry to plan for a possible personal injury lawsuit case.

However, the caps also may hurt the people they are trying to protect because they want to place a quantifiable number on their pain and suffering. If you are dealing with this issue, contact a local personal injury attorney to assist you in your situation.

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