Proponents of tort reform have long touted the benefits of caps on damages as a means of stopping runaway liability.  The argument goes that caps are necessary to reduce costs in certain areas, such as healthcare, and are necessary to promote business growth as they provide employers greater certainty with regard to potential liability.  Perhaps in the abstract, damages caps seem like a useful tool.  Caps, however, can create grave injustices in real life cases.

Tragedy struck this past August at the Indiana State Fair in Indianapolis.  As a crowd of 10,000 watched country band Sugarland perform, explosive winds caused the stage to collapse, killing seven people and injuring fifty-eight others.

Victims of the collapse and heirs of the deceased brought suit against the state to recover damages for their injuries.  But the sixty-five plaintiffs in the case are upset that they will not be able to obtain adequate compensation for their injuries due to a cap on damages that the state must pay.  The Indiana damages cap at issue limits the state’s liability to $5 Million for injuries arising out of a single incident.  The law also limits the state’s liability for damages to an individual to $700,000.

Plaintiffs are challenging the constitutionality of the law on due process and equal protection grounds.  To date, there has not been a ruling on the law’s constitutionality.

Without getting into the merits of the plaintiffs’ suit against Indiana, i.e., whether proper precautions against high winds were taken, etc.,  the unfairness of the damages cap is manifest.  This damages cap — like all damages caps — is arbitrary in the sense that it assigns a limit of liability to a case irrespective of its facts.   It takes away a jury’s ability to award compensation commensurate with the harm done so that a plaintiff can be made whole.  In some cases, and likely in this case if the cap stands, caps deny injured persons money to fully treat and recover from their injuries.  That result can be especially painful for plaintiffs suffering permanent injuries.

Assigning appropriate compensation to plaintiffs is an essential jury function.  Juries have been trusted from the inception of our legal system to determine what amount an injured person needs to return to a healthy life.  If a jury awards an unreasonable amount, there are legal mechanisms that allow judges to try to keep the judgment in line with the facts of the case, e.g., remittitur.

Moreover, our civil justice system also serves to discourage wrongdoers — both those who harm others through intentional acts, and through careless or negligent acts.  Juries encourage negligent defendants to take better precautions in the future by awarding liability against them.  Damages caps reduce the effectiveness of this system.  If a defendant will not be brought to account for the full amount of harm he causes, he loses the incentive to behave better in the future.

Perhaps the fundamental problem with caps is they quantify liability before the harm ever occurs.  Under such a scheme, problems of proportionality between harm and liability are inevitable.

Indiana’s cap of $700,000 for individuals suffering serious injuries or death likely will impair victims’ abilities to receive full compensation for their tragic injuries.  We keep all who suffered in this event in our thoughts and prayers.



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