Non-economic damages caps 2910182 199222527 2008-03-19T00:09:00Z Delirium 6827 cut down the specifics in the intro, since actual laws vary widely across jurisdictions {{POV|date=December 2007}} '''Non-economic damages caps''' are somewhat controversial [[tort reforms]] to limit (''i.e.'', "cap") [[damages]] for intangible harms such as severe pain, physical and emotional distress, disfigurement, loss of the enjoyment of life that an injury has caused, including sterility, loss of sexual organs, physical impairment and loss of a loved one, etc. <p> Non-economic damages compensate injuries and losses that are not easily quantified by a dollar amount. Also known as quality-of-life damages, this compensation covers the family of victims who have died, or severely injured victims. ==Efficacy of Caps== Many states have debated, passed legislation or amended their constitutions to create such caps. President [[George W. Bush]] has proposed a nationwide $250,000 cap in [[medical malpractice]] cases. In the area of [[medical malpractice]], tort reform advocates claim that insurance premiums would decrease, both making medical care more affordable and eliminating a disincentive for doctors to practice. In contrast, critics contend that high medical malpractice insurance rates are a result of the cyclical nature of the insurance industry, lack of competition, mismanagement of reserves and a decline in investment income. [http://www.ispub.com/ostia/index.php?xmlFilePath=journals/ijhca/vol3n1/capping.xml]<p> California is often cited as the model for tort reform. In 1975 California passed the Medical Injury Compensation Reform Act (MICRA). This legislation capped non-economic damages at $250,000. However, after an initial reduction in premium rates, premiums continued to rise. “By 1988, twelve years after the passage of MICRA, California medical malpractice premiums had reached an all-time high- 450% higher than 1975, when MICRA was enacted.” (Glassman, 2004, p. 17). Since capping awards had not resolved the problem of rising malpractice premiums, California enacted California Insurance Code 1861.01, Proposition 103, which mandated insurance premium rollbacks of up to 20%. As a consequence malpractice rates fell immediately. Within 3 years malpractice premiums had dropped by over 30.7% when adjusted for inflation (Glassman, 2004).[http://www.ispub.com/ostia/index.php?xmlFilePath=journals/ijhca/vol3n1/capping.xml]<p> In Texas, voters passed Proposition 12 amending the state constitution. Proposition 12 limited non-economic damages to $250,000, in an attempt to "curb rising malpractice premiums, and control escalating healthcare costs". However, in 2004, one year after the legislation was passed, the Medical Protective Co., a large medical malpractice insurer, filed for a 19% rate increase. The company stated that non-economic damages amount to less than 1% of its payouts (Modern Healthcare, 2005).[http://www.ispub.com/ostia/index.php?xmlFilePath=journals/ijhca/vol3n1/capping.xml]<p> There are further disputes over if these caps would reduce overall medical costs for patients at all. A [http://www.cbo.gov/showdoc.cfm?index=4968&sequence=0 study] by the U.S. [[Congressional Budget Office]] published in 2004 found that “Malpractice costs account for less than 2 percent of [[health care]] spending." Although tort reformists cite other possible effects of limiting tort liability, such as reducing the extent to which physicians practice “defensive medicine” and preventing widespread problems of access to health care, the evidence for this is weak or inconclusive (CBO Brief, 2004).[http://www.ispub.com/ostia/index.php?xmlFilePath=journals/ijhca/vol3n1/capping.xml] ==Fair Compensation== Non-economic damages are the only compensation a jury can provide for the injury itself, as opposed to reimbursement of [[out-of-pocket expenses]] such as the plaintiff's lost wages, medical bills, and legal fees. This type of compensation is especially important for people who do not work outside the home, like the elderly, children, and homemakers. The "worth" of a homemaker's work inside the home is not easily measured by a dollar amount, and would only be compensated through non-economic damages. Tort reform supporters argue that it is difficult for juries to assign a dollar value to these losses with the guidance they are normally given. They claim that there is no basis for non-economic damages, and uncapped non-economic damage would violate the equitable principles of [[justice]] by being inherently quite random, because different juries will always come to different results. Because of this highly charged environment of personal injury trials, they fear some unbounded non-economic damage awards. In ''[[Ernst v. Merck]]'', a Texas [[Vioxx]] products liability case, the jury issued a verdict of $24 million in non-economic damages for a widow of a 59 year old triathelete who died from arrhythmia, or an irregular heartbeat that could have been prevented had Merck provided warnings about the drug. Tort reform supporters point out the widow had not been married a long time, and suggest this award was excessive.[http://www.lawyersweeklyusa.com/usa/3topten2005.cfm]<p> In contrast, opponents of tort reform contend that jurors should assess damages on a case-by-case basis and that damages should not be arbitrarily capped by a legislature. Limiting non-economic damages would fail to provide fair compensation to people who are "crippled, disfigured, blinded or live in severe pain or humiliation" as a result of a negligent hospital or doctor.[http://www.jacksonwilson.com/articles/article_tort_reform_contract.htm] For example, in some jurisdictions with $250,000 caps on non-economic damages, a judge would be required to reduce an award of $1,000,000 in damages for pain and suffering down to $250,000 even in a case where a victim was rendered [[quadriplegic]] by a drunk driver or by a dangerously [[product liability|defective product]]. <p> For example, Steven Olsen is blind, brain damaged and physically retarded because of medical negligence. When Stephen was two years old, he fell on a stick in the woods while hiking. The hospital gave Steven steroids and sent him home with a growing brain abscess, although his parents had asked for a CAT scan. The next day, Steven Olsen came back to the hospital comatose. At trial, medical experts testified that had he received the $800 CAT scan, Stephen would have his sight and be perfectly healthy today. The jury awarded $7.1 million in "non-economic" damages for Steven's preventable severe disability and suffering. However, the jury was not told of a state cap on non-economic damages. As a result,the judge was forced to reduce the amount to $250,000. The jurors only found out that their verdict had been reduced by reading about it in the newspaper. [http://www.consumerwatchdog.org/malpractice/fs/?postId=4718&pageTitle=HR+4600+Will+Harm+Patients+%26+Enrich+Only+Insurers]<p> ==Constitutionality of caps== ====Right to Trial by Jury==== Opponents of caps on damages argue that caps on the amount of damages jurors can award violate the right to a [[trial by jury]].[http://www.seanet.com/~rod/marbury.html] Because tort law has historically been a question of state law, states have the power to establish a constitutional right to a trial by jury in civil cases. Historically, juries have decided both the question of liability and the question of how much damages to award in tort cases, subject to instructions on the law by a judge. Several state appellate courts that have considered the issue have struck down damages caps as violative of state constitutions.[http://www.centerjd.org/free/mythbusters-free/MB_Unconstitutional.htm] <p> ====Separation of Powers==== Some tort reform supporters, such as the conservative Federalist Society, have criticized such decisions as a violation of the concept of [[separation of powers]].[http://www.fed-soc.org/pdf/Nullification.PDF]. <p> In contrast, critics of caps contend and state courts have held that legislatures violate the principle of separation of powers when they attempt to impose arbitrary damage caps on juries, who function as part of the judicial branch of government. In ''Best v. Taylor Machine Works'', the Illinois Supreme Court ruled that a $500,000 cap on non-economic damages functioned as a "legislative remittitur" and invaded the power of the judiciary, in violation of the separation of powers clause. The court noted that courts are empowered to reduce excessive verdicts where appropriate in light of the evidence. The cap, however, reduced damages by operation of law, without regard to the specific circumstances of the case. [http://www.roscoepound.org/new/digest/wint98.htm]<p> ====Equal Protection==== In 2005, a Wisconsin court ruled that a $350,000 cap on non-economic damages in medical malpractice cases violates the state's [[equal protection]] guarantee. In ''Ferdon v. Wisconsin Patient's Compensation Fund'', the court ruled that there was no rational relationship between the objectives identified by the legislature that were intended to prevent a medical liability crisis in Wisconsin and treating people with more severe injuries and higher noneconomic damage awards different from people with lower noneconomic damage awards. [http://www.wisconsinmedicalsociety.org/physician_resources/court_ferdonshort.cfm][http://www.centerjd.org/free/mythbusters-free/MB_Unconstitutional.htm] ==External links== * [http://cbo.gov/showdoc.cfm?index=4968&sequence=0 CBO Economic and Budget Issue Brief, 2004] * [http://www.ispub.com/ostia/index.php?xmlFilePath=journals/ijhca/vol3n1/capping.xml The Internet Journal of Healthcare Administration] [[Category:Tort law]]