Some personal injury awards are subject to caps or limitations. Below is an overview of such caps.

Rationale for Caps

There are two main reasons for damage caps. First, some people get excited by huge injury awards and file frivolous lawsuits with the hope of winning a jackpot. Allowing limitless injury awards would continue to encourage such people to file their lawsuits. Some of them would win settlement awards — especially when a jury is set to try the case — because some juries make emotional decisions.

Second, huge awards also hurt the costs of doing business, which is detrimental to the society at large. Consider the example of the auto insurance industry. Auto insurance companies can suffer serious losses if auto accident victims win huge or limitless awards. That would cause the auto insurance companies to raise their rates to protect themselves from losses. In the end, motorists would bear the long-term consequences of limitless awards.

Application

Injury cases have two types of damages — economic and non-economic damages. Economic damages compensate for direct monetary losses to the injury victim. For example, if you are a victim of an auto accident, your medical bills, auto repair costs, and lost wages would be economic damages. Other negative effects of the accident, such as pain and suffering, loss of consortium, and mental anguish, make up the noneconomic damages.

States don't cap economic damages since the damages compensate for actual losses and they are easy to quantify. If someone causes you a million dollars' worth of damages, they should give you a million dollars. Hover, most states cap other types of damages.

For states with damage caps, the limitations depend on the type of personal injury case. For example, some states have caps on medical malpractice cases, as well as cases involving product liability, dog bite injuries, or slip-and-fall injuries.

Also, states have different approaches on how they apply the caps. For example, some states have a maximum amount of money an injury victim can get in a specific case or for a specific type of damage. Other states calculate the cap as a percentage of the economic damages. For example, a state might cap non-economic damages at three times the economic damages.

As you can see, there is a lot to learn about personal injury damage caps. Note that even if the jury awards a lot of money, the final check is subject to damage limitations. This means it's in your best interest to maximize your economic damages since they are not subject to limitations.

To learn more, contact a lawyer like Franklin L. Jones, Jr.