Undermining of Non-Economic Damages Next Step in Erosion of Consumer Safety

The function of punitive damages has been all but eliminated in most states. 32 states have caps or restrictions on punitive damages, and most of those restrictions accomplish exactly one thing: they prevent any "punitive" damages awarded from actually having a punitive impact. The point of punitive damages was to discourage companies from behavior that was harmful to consumers.

Jurors in a recent Vioxx case used the concept of punitive damages precisely as it was intended-upon hearing that Merck had hoped to save $229 million by delaying changes to its warning labels, the jury awarded $229 in punitive damages. Wiping out the profit derived from willful misconduct is precisely the kind of thing punitive damages were intended to do, but caps on punitive damages wiped out most of that verdict, ensuring that it remained highly profitable for Merck to decide not to tell patients about known dangers of its product.

But the limitations on the freedom of judges and juries to do what seems fair to them in personal injury, product liability, and medical malpractice cases doesn't end there. In fact, 23 states currently cap or otherwise restrict the award of non-economic damages. Thus, awards for pain and suffering, emotional distress, and other non-economic losses are limited, regardless of how serious. In some states, those limits are lower in medical malpractice cases than in regular personal injury cases, meaning that your doctor is held less accountable than a driver who looks down at his CD player in traffic and causes an accident.

Specific liability limits can be even more extreme, and bring about even more skewed results. For instance, an Alabama woman sustained permanent injuries in May, when she was struck by a police motorcycle after stepping into the street on explicit instruction from another police officer. She has permanently lost all use of her left arm, which causes her constant pain, and it remains unclear whether or not doctors will be able to save her leg, which was broken in five places and is infected.

However, an Alabama statute caps liability to any one individual at $100,000. The same statute caps liability for a single event at $300,000, regardless of the number of victims, so if a large number of people were injured in a single incident, none could expect reasonable compensation.

The insurance lobby talks a lot about the "cost to society" of litigation, in terms of higher prices, higher insurance premiums, companies unwilling to manufacture certain product, increased medical expenses. Maybe it's time that we considered the costs to society of failing to compensate injury victims for their medical expenses and other losses that might limit their ability to be self-supporting. States may be forced to pick up many of those medical expenses, or hospitals to write them off, at expense to all of us. And, the correlation between uninsured medical expenses and bankruptcy can't be ignored, either. Ensuring that the responsible party bears the costs of an injury helps to protect society against those burdens.