The controversy over personal injury damage caps is consistently traveling through state courts causing increasing debate. In state supreme courts, there are conflicting court rulings on the constitutionality of the legislative caps on punitive damages. Unlike compensatory damages, punitive damages go one step further and are awarded to punish and prevent wrong-doing in the future.
The state courts that uphold the caps often find that there is no violation of a plaintiff’s right to a jury, where that jury is supposed to be deciding all questions of law in the case. However, given the trend in states upholding the caps, there is nothing to prevent the court from completely disregarding the jury’s verdict. This inevitably brings up the question of whether there is a violation of the separation between the judicial and legislative branches of the state governments. Many critics of the caps feel that these courts are refusing to provide a remedy at law and, more importantly, violating the important rights to due process and equal protection.
In some states, jury awards have been cut by 30% or more, at the expense of medical malpractice victims. In California, this result was caused by the Medical Injury Compensation Act. Acts such as this result in institutions, such as hospitals, practicing less caution when treating patients since they know that their liability will not carry heavy monetary consequences.
Additionally, as the debate heats up, the effect on personal injury firms is becoming evident. Lawyers may be hesitant to take on a medical malpractice case given the low awards in relation to the cost in litigating the case, as most are taken on a contingency basis.
Courts that uphold the caps seem to be more interested in protecting corporate entities rather than securing the safety of its citizens. The rationale of these courts is that the legislative caps are “rationally related to a legitimate state interest.” That is, they are assisting these companies to remain of business. This relatively low standard is enough to find the caps constitutional in this context.
Lastly, there is much debate among state legislatures concerning the “collateral source” rule when it comes to personal injury cases. Under this rule, juries are prohibited from considering any other money received by the plaintiff for their injury. This type of compensation can be in the form of the defendant’s insurance policy. Many state legislatures are considering abolishing the rule. If this happens, the result will be essentially the same as applying caps to personal injury cases. Again, state legislatures are protecting businesses from paying the price of their tort liability. And, similar to legislative caps, business are less likely to take preventive measures if they know the insurance policy they have already purchased will cover the injury.
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