By Francis M. Smith
It may seem counter to one's intuition for there to be limits on the damages an injured person can be awarded other than the jury's judgment of proper compensation for all the elements of an injury, but there is legislation that can, in some instances, place a cap on the amount that can be awarded as compensation for certain types of damages. Most of the time, these laws apply only to non-economic damages, as these are inherently more subjective and do not correspond directly to a financial loss on the part of the injured person.
Broadly speaking, there are two categories of damages for which an injured person can seek to be compensated: economic damages, which include any expenses or financial losses that the plaintiff incurred as a result of their injuries, such as medical bills, property damage, and lost wages; and non-economic damages. This second category includes those damages that the law recognizes as genuine losses, but don't have a fixed dollar value associated with them, including the pain and suffering caused by the plaintiff's injuries, or the negative impact those injuries have had on the plaintiff's ability to partake of customary activities and generally enjoy their life. Punitive damages, which are intended primarily as a punishment and future deterrence for the negligent defendant rather than a measure of compensation for the injured plaintiff, also fall under the heading of non-economic damages. Because non-economic damages are necessarily subjective in nature and are not tied to a specific dollar figure lost by the plaintiff, these are the damages usually targeted by legislative caps intended to curb “frivolous” lawsuits and “excessive” damage awards.
Numerous states have enacted laws capping the amount that can be awarded for non-economic damages in medical malpractice cases, due to pressure from the medical community and concerns over the cost of medical liability insurance. These caps often range from $350,000 to $750,000 – though in the case of a patient's death or serious, permanent injury including the loss of a limb or organs, the cap is generally lifted to a much higher figure or waived entirely. A few states somewhat incredibly include caps like this on all personal injury suits, not just medical malpractice cases.
Punitive damages are a common target for legislation intended to limit damage awards. Because these damages are intended as punishment for the negligent party and as a way to curb future wrongdoing, the details of the injured plaintiff's losses and suffering are less of a factor in determining the sum of punitive damages. Instead, the major determining factor in these damages is the wealth of the negligent defendant. The average individual or small business might be severely burdened by a punitive damage decision of $100,000, but a national corporation would barely notice that sum, and must therefore be assigned significantly higher damages if the intent is to punish them. This can result in damage awards that may be popularly viewed as “grossly inflated,” if the negligent party is a corporation with “deep pockets.”
A decision by the US Supreme Court in 2005 established guidelines to limit punitive damage awards, but many state legislatures have decided that the decision did not go far enough, and enacted legislation to further cap punitive damages. Some states use a fixed dollar-value cap, while others limit punitive damages to a specific multiplier of the value of the other damages in the case. New Jersey's law limiting punitive damages incorporates a combination of both approaches: punitive damages are limited to $350,000 or five times the value of the compensatory damages in the case, whichever figure is higher. It should be noted, however, that punitive damages are rarely a factor in the average personal injury suit, which will usually involve negligence and not intentionally evil behavior, so it's relatively unlikely that this law would affect your own injury case.
A few other legislative factors affect the way injury damages are calculated and assigned. The collateral source rule, for instance, is one that tends to work in the plaintiff's favor. This rule prevents the negligent party's defense lawyers from presenting evidence about any insurance payments or other compensation the injured plaintiff has received for their injuries. The concern over this kind of evidence is that a jury might reduce the damages that the plaintiff receives if they believe that the injured person has already been compensated, despite the fact that the defendant was still negligent and is still liable for the injuries they caused. But in New Jersey the judge will usually "mold" a verdict to deduct out what has been paid by insurance - like medical expense or disability payments for lost wages. In addition, health insurance plans can sometimes place a lien on any damage award received by an injured plaintiff for medical expenses paid by the plan (when governed by federal law, and not state law), up to the total figure that the medical benefits plan paid out. If the jury reduced the amount that the plaintiff received in damages because of insurance payments, the plaintiff could end up with nothing left after the insurance company took its compensation back. A competent personal injury attorney knows how to handle these issues for you and provide the right kind of information to make sure you are properly compensated after an injury resulting from another's fault.
If you or a loved one have been injured in a serious accident, please contact me or call me at 908-233-5800 for a free consultation.