When you sue someone, in most cases (particularly personal injury cases), you usually hope to get money damages to compensate you for your injury. There are generally two classes of damages: economic damages and non-economic damages. Economic damages refer to specific costs you have incurred as a result of your injury, such as medical bills or money you spent to repair damaged property. On the other hand, non-economic damages refers to all the other types of damages, such as emotional distress, pain and suffering, etc.
Damages caps are laws that limit the amount of non-economic damages that may be awarded for a case. As of now, each state has its own damages cap. Meanwhile, the federal government has put a $250,000 cap on non-economic damages for medical malpractice claims.
As an initial reaction, you may wonder -- what is the point of a damages cap? It may seem that damages caps are unfair to plaintiffs, the people that bring the lawsuit. If a jury of the plaintiff's peers determines that a plaintiff deserves $10 million in damages, why should the courts override that decision? Although there is merit to this question, the counter-argument is simple: because many people believe high awards can put a drag on the overall economy.
Damages caps are an attempt to manage the high costs of doing business (which are ultimately passed on to the consumer) by reducing the liability of service providers. Think about a medical malpractice case. A doctor's mistake can have devastating consequences for his or her patient, and juries might be inclined to award millions of dollars to the patient in non-economic damages. In most cases, it is the doctor's medical malpractice insurance company that pays those damages -- starting a chain reaction of increasing costs.
To make up for the millions paid in damages (and the risk of future large damages awards), the insurance company increases the costs to the doctor associated with medical malpractice insurance. This in turn means it will cost more for the doctors to practice medicine, which ultimately means that patients will have to pay more on their medical bills to cover these increased costs.
In addition to managing the costs of doing business, damages caps also discourage people from trying to play "lawsuit lotto" -- bringing a suit simply because they think they can win a lot of money. Courts want to ensure that the justice system is reserved for people who are actually injured and seeking compensation.
Juries usually cannot get around damages caps, for the simple reason that most juries do not know about damages caps. Judges and attorneys do not instruct the jury about damages caps because they do not want juries to use the cap as a starting point when they award damages. Instead, juries are encouraged to award the amount they think is fair, and the damages award is modified later according to that state's cap.
If you have questions about how damages caps may affect your case, or if you've been injured and are wondering if you even have a case, you should consider consulting with a local personal injury attorney. A lawyer in your area familiar with the local laws can suggest possible next steps and give you advice tailored to your specific circumstances.
