Should There Be “Caps” on Damages That Juries Can Award?
One of the fondest dreams of insurance carriers is that they will get to continue charging high rates for insurance but that our legislature will cap their potential downside risk. Big businesses like car manufacturers and investment companies also love the idea that the amount they have to pay for the damage they cause can be limited—no matter how much damage they did. These are the same people, remember, who think it’s a good idea to pay themselves million dollar bonuses right after begging the government for a bailout of the companies they have mismanaged into bankruptcy.
The Big Lies Insurance Companies Tell for Damage Caps
The arguments made for such caps are basically two: First, spokesmen for insurance carriers point to silly lawsuits filed in other states to “prove” that there is a problem here. In editorial after editorial by representatives of a “concerned citizens group” fronting for insurance companies we hear about the McDonald’s spilled coffee case (a thirty year old New Mexico verdict which settled for a fraction of the verdict awarded) and a silly case filed in New York ten years ago against fast food companies for serving food with a high fat content. What we don’t hear is why either of these cases is relevant to a discussion of what is happening here—and why either case could be relevant to the discussion of whether to artificially cap damages awarded to people when a Texas jury, a Texas trial judge and a Texas court of appeals all believe the injured person deserves the money.
But saying that caps on damages have anything to do with frivolous lawsuits is just silly. A frivolous lawsuit is one where any reasonable person would agree that the plaintiff should get nothing. Damage caps, by contrast, only come into play when twelve reasonable jurors, a trial judge and then a panel of appellate judges agree that the plaintiff’s case is not only not frivolous—but that the plaintiff is entitled to recover a large damage award. Put another way, what big business and insurance companies are really asking for is for laws to prevent people who really have suffered catastrophic damages from getting justice from the people who caused the damage.
In order to actually get paid in our system today, first 12 jurors have to agree that you deserve the damages, then the trial judge has to sign a judgment agreeing, and then the losing party can appeal that decision and get the damages reduced if they are not supported by the evidence. After going through all of that—12 jurors, a trial judge and three appellate judges—there is no way to argue that the damages weren’t actually suffered, and certainly no argument to be made that the case was “frivolous”.
The second argument made for damage caps is that insurance coverage is too expensive. But this argument is never, ever, followed by a promise that insurance rates will be lowered if damage caps are put in place. The insurance lobby says that we must have damage caps on what seriously injured people who deserve the money can recover, so that we can all have lower rates. Well, it seems to me that if we are all going to give up our rights based on that argument, then we ought to get a promise to lower rates in return. But we never do: in fact, we get just the opposite. In exchange for a real loss of rights for the innocent injured, the public gets…nothing.
The Only Protection You Have is the Courts
You should also know this: when a doctor commits malpractice, or a manufacturer knowingly sells a defective tire and kills a family member or maims you, they’re not going to compensate you for the damage he causes out of the goodness of their hearts. Their insurance companies have no heart at all and are interested only in profits, not your problems. That “concerned citizens tort reform” group funded by big business and the insurance industry won’t help you, and neither will the politicians they put in office. Only the court system can help you, and it won’t be able to help if the insurance and corporate lobbyists get their way.
