What is a Damages Cap?

When you go through with a lawsuit, you typically have money damages and compensation in mind. This may be to cover the cost of your injury in a personal injury case. There are typically two types of damage caps, known as economic and non-economic damages. What is the difference?

  • Economic damages: These refer to the damages that the plaintiff or insurance company has paid out or will continue to pay out as the result of an injury. This could include medical bills that are related to the injury.
  • Non-economic damages: These are every other category of injury damages. They may refer to pain and suffering or loss of enjoyment of life. Many states have non-economic damage caps for medical malpractice cases. The cap amounts can range from $350,000 to $750,000. Damage cap laws make exceptions for cases involving death and serious injury. In these exceptions, a higher damage cap may be permitted or eliminated altogether.

Then, there are what are known as punitive damages. These are damages that are designed to punish intentional wrongdoing and deter future bad conduct. They are based on the defendant’s wealth primarily. If a plaintiff proved that a very wealthy defendant intentionally caused the plaintiff injury, then the punitive damage award could vastly exceed other damages.

Why do damage caps exist?

Damage caps may be misconstrued as unfair to plaintiffs due to scenarios where a jury believes that somebody should receive $10 million in damages and a court overrides this decision. The reason, though, is simple: Many people believe that higher awards can put a drag on the overall economy. Damage caps are a restrictive measure, in a way. They are used in an attempt to manage the high costs of doing business be reducing the liability of service providers. However, in addition to just managing the costs of doing business, damage caps also discourage people from trying to play “lawsuit lotto,” which is essentially bringing a lawsuit because they have a belief that they can win a lot of money from it. Courts, in the end, want to ensure that the justice system is reserved for people who are actually injured and seeking fair compensation.

Is a jury able to get around damage caps?

Normally, no. Juries will not be able to get around damage caps. The simple reason behind this is because most juries don’t know about damage caps. Judges and attorneys may avoid instructing juries about them because they do not want the juries to use the cap as a starting point when they award the damages. Instead, juries are encouraged to award the amount that they think is fair.

When you have questions about your own situation or if you have been injured, you should consider speaking with a personal injury attorney. At MDL, we are waiting to hear from you and take on your case! It is important to go into a case knowing if your particular state has a damages cap and other state laws that may affect your personal injury case in full.