Torts - Cases, Principles, and Institutions Fifth Edition, 2016a

Witt & Tani, TCPI 10. Damages
2. Damages reform legislation. The same kind of skepticism of pain and suffering awards
apparent in Judge Wachtler’s decision has produced a tidal wave of tort reform legislation aimed
at reducing damages awards. Beginning with the Medical Injury Compensation Reform Act,
known as MICRA, enacted in California in 1976, damages reform has become a popular
legislative priority in state legislatures around the country, especially in those dominated by the
Republican Party. In all, more than thirty states have enacted statutes placing caps on
noneconomic damages, with caps generally set in the range of $250,000–$500,000, but
occasionally running as high as $1 million.
As hoped by their supporters, caps on non-economic damages seem to have reduced the
number of lawsuits, the average size of awards in lawsuits, and insurance costs. CONGRESSIONAL
BUDGET OFFICE, THE EFFECTS OF TORT REFORM: EVIDENCE FROM THE STATES (2004). There are
confounding selection effects, to be sure: the cases that move forward after the enactment of
damages caps on pain and suffering are more likely to be cases with higher ratios of pecuniary to
nonpecuniary damages. One study found that damages awarded at trial remain roughly constant
across the enactment of reform caps. Catherine M. Sharkey, Unintended Consequences of
Medical Malpractice Damages Caps, 80 N.Y.U. L. REV. 391 (2005). But studies that look
beyond the courtroom find that the effect of damages caps legislation at the settlement stage is to
decrease average settlement amounts. Ronen Avraham, An Empirical Study of the Impact of Tort
Reforms on Medical Malpractice Settlement Payments, 36 J. LEGAL STUD. 183 (2007). Such
effects seem to be driven both by the reduced expectations of plaintiffs and by the decreased
willingness of the plaintiffs’ bar to take on certain types of cases. See Stephen Daniels & Joanne
Martin, The Texas Two-Step: Evidence on the Link Between Damages Caps and Access to the
Civil Justice System, 55 DEPAUL L. REV. 635 (2006).
It is worth observing, however, that the caps only affect those plaintiffs whose pain and
suffering has been found, or is likely to be found, by a jury to have been very high. Plaintiffs
whose pain and suffering is deemed by a jury as minimal are affected not at all. The legislation
therefore takes only from the most seriously injured.
And what kinds of injuries are most likely to be affected? To what kind of people?
Injuries causing relatively little pecuniary damage are especially notable here, since the caps on
damages may mean that the expense of bringing claims in such cases may be too high to warrant
filing suit, especially in costly kinds of litigation such as medical malpractice and products
liability. Injuries to women and to people out of the workforce are especially likely to produce
higher ratios of nonpecuniary to pecuniary losses. Injuries to reproductive or sexual capacities are
another example: in some sense, these injuries may actually save their victims money in the long
run, because of the expense of raising a child, but they may be devastating to the life plans of
victims and therefore produce a high non-pecuniary damage award. For an argument that
nonpecuniary damages caps disproportionately affect women, children, and the elderly, because
the types of harm these plaintiffs suffer may be likely to be nonpecuniary and because the
pecuniary damages they can get may be relatively lower, see Lucinda M. Finley, The Hidden
Victims of Tort Reform: Women, Children, and the Elderly, 53 EMORY L.J. 1263 (2004). Do
damage caps send a message about the value society places on these lives and these harms?
Is it sensible to think of pain and suffering damages as a way in which the inequities of the
market—inequities that are reproduced by measures of pecuniary damages—may be
rectified? Note that one difficulty with this strategy is that it may reproduce its own kind of
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