What would happen if you were left without compensation for your injuries that were caused by someone else? Who would pay your medical bills? What if a life-altering injury required a complete change in your lifestyle and there was no one to ensure that your new expenses were covered?
The spotlight recently focused on the topic of limiting damages in injury lawsuits. The Duck boat case in Philadelphia settled for $17 million on May 9, 2012. However, if the Jones Act applied, the Duck boat accident victims would have been limited to the $1.8 million of total compensation, which was the agreed upon value of the boats involved. This was a case in which two teenagers lost their lives, and several others were injured. Viewed in this context, it is obvious that the available recoverable damages would have been vastly insufficient to cover the extent of the injuries.
The Jones Act is just one example of a law that limits the amount of damages that injured parties can recover. This law states that liability is limited to the value of the boats involved. The limitation on recoverable damages does not apply if the owner’s negligence causes the loss. That is the reason it did not apply in the Duck boat accident; the tug operator’s negligence was determined to be the cause.
Caps on damages do in fact exist in Pennsylvania when the Commonwealth itself or a municipality is the defendant. In another recent case that was the focus of the news media, a $14 million verdict against Pennsbury School District was reduced to $500,000. In that case, the school district acknowledged responsibility for the accident that occurred when the district’s bus ran over student Ashley Zauflik and 19 others. Zauflik lost her left leg in the accident. But, because of the Political Subdivision Tort Claims Act, damages recoverable against state entities and local governments are capped at $500,000. The court was therefore forced to reduce the verdict to $500,000.
Most states already have caps on damages in medical malpractice cases, putting Pennsylvania in the minority.
Proponents of caps argue that caps would make access to healthcare more affordable across the board. They argue that caps would result in lower premiums for physicians. They also argue that without caps, physicians might be forced to stop practicing medicine because of increased costs of malpractice insurance coverage. However, in 2004, the nation’s largest medical malpractice insurer – GE Medical Protective Inc. – openly admitted that damage caps did nothing to lower physician premiums. In a regulatory filing before the Texas Department of Insurance, the company stated, “noneconomic damages are a small percentage of total losses paid,” and that “capping non-economic damages will show loss savings of 1.0 percent.”
The truth is that nationally, medical malpractice claims have actually reduced 45% since 2000, yet doctor’s premiums for malpractice coverage have remained almost the same with or without caps on damages. This has resulted in greater profits for medical malpractice insurance companies.
Noneconomic damages, such as pain and suffering, which are targeted by caps, are, in reality, a very small percentage of the total payouts by insurance companies. Medical malpractice claims account for only about 2% of total healthcare expenditures. The fact is that caps shield potentially negligent doctors from the judicial system by denying injured patients any meaningful recourse. When doctors practice medicine knowing there are no consequences for their negligent actions, there is no incentive for them to place patient safety as the highest priority.