Effect of Tort Reform on Personal Injury Cases

Tort reform is legislation that limits a plaintiff's ability to recover compensation in a personal injury lawsuit - and it's a controversial subject.

Tort reform refers to legislative changes (both laws that are proposed and laws that are passed) that would change the way personal injury cases work. "Tort" is just another legalese term for personal injury.

What is Tort Reform?

More specifically, tort reform typically involves placing caps on how much an injured person can receive after a successful lawsuit -- a limitation on the dollar figure known as damages.

In a typical personal injury claim, such as one stemming from medical malpractice, a plaintiff can receive damages that are intended to compensate for:

1. Medical treatment costs (economic damages)
2. Lost income/earnings (economic damages)
3. Pain and suffering (non-economic damages)
4. Emotional distress (non-economic damages)
5. Punitive damages (meant to punish a defendant for egregious or outrageous conduct)

Tort reform efforts usually try to limit non-economic damages, punitive damages or both.

Arguments for Tort Reform

Those who argue in favor of tort reform assert that caps on damages are essential for protecting many facets of society from the crushing costs of unreasonable jury verdicts. In medical malpractice cases, for example, tort reform is seen as one way of helping to keep down the skyrocketing costs of medical care.

In injury cases in general, there is a belief that juries may be overly sympathetic to injured victims, and will award damages that are out-of-bounds with what is appropriate. The risk of high, uncapped damage awards results in insurance being quite expensive. Returning to the medical malpractice example, doctors, hospitals and health care providers have to pay more money for malpractice insurance, so as a result, medical care costs more because this cost has to be borne by consumers. It is also argued that doctors sometimes make decisions based on the fear of a lawsuit, rather than solely on what they believe is best.

Arguments Against Tort Reform

Equally compelling are the arguments against tort reforms. Counterarguments assert that it is not fair to cap damages and prevent plaintiffs from getting full compensation for losses that were caused by someone else's negligence. Some argue that tort reform efforts are unconstitutional, and in fact some state constitutions do have prohibitions against these types of caps (Arkansas, Kentucky, and Pennsylvania are a few).

Finally, in the context of medical malpractice lawsuits, it has been asserted in some states -- like California -- that plaintiffs are having a hard time finding lawyers to take malpractice cases. California has a $250,000 cap on non-economic damages in medical malpractice cases, and attorneys are typically paid a percentage of damages as their only fee in these cases. Since malpractice is expensive to prove, this cap on damages acts as a potentially significant hindrance to lawyers taking on malpractice cases. When plaintiffs can't find lawyers, doctors don't get sued and there is even less accountability or incentive to refrain from negligence. So the argument goes.

What States Have Medical Malpractice Damage Caps?

While there are plenty of arguments on both sides, the fact is many states have instituted caps when it comes to damages in medical malpractice lawsuits. A table of the rules regarding damage caps is below but it is important to note two things: 1) most of these caps adjust annually for inflation so the ceiling may be different at the time of your reading and 2) laws in this area are evolving. The table, then, should be considered a guide but should not be used as your definitive answer on whether malpractice damages are capped in your state:

State Damage Caps
Alabama None
Alaska Non-economic: $250,000. Wrongful death or a disability considered more than 70% disabling: $400,000
Arizona Constitutionally prohibited
Arkansas None
California Non-economic $250,000
Colorado Non-economic: $300,000. Total damages: $1 million
Connecticut None
Delaware None
District of Columbia None
Florida Non-Economic Damages: $500,000 for practitioners; $750,000 for non-practitioners; $1-million for permanent vegetative state or death
Georgia Punitive: $250,000. Non-economic: $350,000 against providers. Additional $350,000 against each health care facility. Total maximum for non-economic: $1,050,000
Hawaii Non-economic: $375,000 with exceptions for specific situations
Idaho Non-economic $250,000, adjusted annually for inflation. Does not apply to willful/reckless negligence or felonies.
Illinois Non-economic: $500,000 against providers. $1,000,000 against hospitals
Indiana $1,250,000 total if it occurred after 1999. Providers liable for a maximum of $250,000 with the rest to be paid through state's Patient Compensation Fund.
Iowa None
Kansas Non-economic: $250,000
Kentucky None
Louisiana $500,000 total. Health care providers liable for only $100,000 with the rest paid by compensation fund
Maine Non-economic: $500,000 on wrongful death
Maryland Non-economic: $710,000 as of 2013 to increase $15,000 annually. Applies to all claims and to all defendants from the same injury, or to wrongful death cases with only one plaintiff. If two wrongful death plaintiffs- $125% of current non-economic cap.
Massachusetts Non-economic damages: $500,000 except in catastrophic injuries
Michigan Non-economic: As of 2010 $408,200 or $729,000 for catastrophic/disabling injuries. Adjusts annually for inflation
Minnesota None
Mississippi Non-economic: $500,000/plaintiff
Missouri Non-economic: $350,000; but cap ruled unconstitutional by Missouri Supreme Court in 2012
Montana Non-economic: $250,000
Nebraska $1,750,000 total except maximum of $500,000 for those qualifying entities under the Hospital-Medical Liability Act
Nevada Non-economic: $350,000 except with limited exceptions
New Hampshire None
New Jersey Punitive: The greater of $350,000 or 5x compensatory damages.
New Mexico Total: $600,000 except for past/future medical bills and punitive damages. Maximum provider liability is $200,000 with the rest paid by compensation fund.
New York None
North Carolina None
North Dakota Non-economic: $500,000 however any award above $250,000 may be reviewed by judge
Ohio Non-economic damages: $250,000 or 3x economic damages up to $350,000/plaintiff, whichever is greater. $500,000 total for multiple plaintiffs. In catastrophic cases, $500,000 or $1,000,000
Oklahoma Non-economic $300,000 for OB/ER cases or if there's an offer of judgment
Oregon Non-economic: $500,000 for wrongful death. Other non-economic caps not constitutional
Pennsylvania Punitive: Twice actual damages. Constitutional prohibition on caps of economic damages
Rhode Island None
South Carolina Punitive damages: $350,000 or 3x compensatory damages. Non-economic: $350,000 or facility against each provider adjusted annually for inflation. Total claim with multiple providers capped at $1,050,000
South Dakota Non-economic $500,000
Tennessee None
Texas Non-economic damages: $250,000 physicians or providers. Additional $250,000 against each health care institution
Utah Non-economic $250,000 against physicians/ providers. $250,000 additional from each health care institution.
Vermont None
Virginia Total damages $2,000,000 for acts occurring after July 2008.
Washington None
West Virginia Non-economic $250,000, adjusted for inflation annually with an absolute maximum of $375,000. In catastrophic cases, $500,000 adjusted annually up to a max of $750,000
Wisconsin Non-economic $750,000 for medical negligence. Wrongful death actions: $500,000 for minors and $350,000 for adults
Wyoming Constitutionally prohibited
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