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How Do Damage Caps Work?

By Tanya Roth, Esq. on February 15, 2013 9:51 AM

How do damage caps work?

Personal injury damage awards can rise to the millions. That's where the whole concept of the ambulance-chasing attorney comes from. It's the idea that you can become a millionaire overnight for tripping on someone's driveway.

Well, that might be a stretch. But nevertheless, some believe that lawsuits are a get-rich-quick scheme. As a result of this and general public policy, legislators in many states have enacted damages caps.

Damages caps limit the amount that can be awarded in certain types of cases. For example, many states have limits on how much can be collected for pain and suffering in medical malpractice lawsuits. Damage caps are also common in certain employment lawsuits.

Let's take a look at how damages work in a personal injury case.

When a person is injured, they look to be made whole. That's the underlying notion behind damage awards.

In order to make the injured person whole, they need to prove that they suffered injury. Injury can be measured as purely economic loss, such as lost wages or damaged property. It can also be measured as hedonic damages, for loss of enjoyment of life.

Other damages address things like pain and suffering.

Damages caps can be an inconvenient limitation to lawsuit recovery. As a result, crafty attorneys know their way around damage caps.

Here's one creative way around damage caps: An experienced personal injury attorney can pursue different types of claims than ones that would be limited by a damage cap. For example, if a patient is injured through a combination of medical malpractice and bad drugs, then both lawsuits can be filed. If a medical malpractice suit faces a cap on damages in that particular state, then the plaintiff can still recover a good amount through a product liability lawsuit.

Many would say that damage caps are a good thing. They prevent lawsuit-happy litigants from unnecessarily filing claims. But others argue that damage caps unfairly limit the recourse available to the injured.

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