Non-economic damages are losses that cannot be quantified monetarily, such as pain, suffering, and emotional distress. They play an important role in compensating injured parties, but their subjective nature has led to controversy and limits in some jurisdictions. Proponents argue that limits are necessary to prevent excessive awards, while opponents argue that they interfere with a jury’s rights and limit just compensation. The issue has been debated in state courts and may eventually be decided by the US Supreme Court.
In law, the term “non-economic damages” refers to damages that cannot be quantified monetarily. For example, in a traffic accident, it is easy to define the totalized value of a vehicle and related medical expenses. It is more difficult to value the premature loss of a limb, the ability to work, or the life of a loved one. These types of damages, along with physical discomfort, pain, suffering, impairment, emotional distress and disfigurement are referred to as non-economic damages.
Non-economic damages play a very important role in the legal system because they are the only means available to a jury to financially compensate an injured party for many types of losses. Some losses are so difficult to assess that the award of these damages is very subjective and based on the whims and judgment of the composed jury. Jury selection, for this reason, is taken very seriously by attorneys in non-pecuniary damages cases.
In order for the jury to give fair value to a loss, it helps if the jury has a point of reference from which to judge. An individual factory worker might have an easy time figuring out an injured worker’s lost wages, but a harder time putting a fair value on a homemaker’s loss of ability to care for the needs of her children and husband. Careful questioning of the pool of prospective jurors can give attorneys insight into the minds and priorities of those who may be adjudicating the case at hand.
There has been much controversy surrounding these types of damages, and many jurisdictions have initiated limits on them through tort reform measures. Some places in the US, like Texas, have low damage caps. In Texas, non-economic damages for medical malpractice suits are limited to $250,000 United States Dollars (USD) unless two or more hospitals are involved. Other states have higher limits, ranging up to $500,000 USD.
Proponents of these limits argue that juries cannot fairly assign values to these damages, and postulate that awarding them violates the fairness principles of justice as they are inherently random. Without guides and caps, the amounts awarded vary widely, citing the case of Ernst v. Merck, in which a Texas jury awarded $24 million in non-economic damages to the widow in the death of a man who died of side effects of taking Vioxx. The two weren’t married for long and the man was 59 years old. As a result, many people felt the premium was excessive. Additional arguments for these limits are more industry specific and include the position that the limits would reduce the cost of medical liability insurance for doctors and help stabilize rising costs.
Opponents argue that the limits on damages interfere with a jury’s rights to determine damages on a case-by-case basis, as provided for in the US Constitution. Furthermore, they argue that many hard-to-quantify damages deserve compensation, and these limits unfairly limit compensation that is just and equitable. Some acts cause such immeasurable loss and others are so egregious that they deserve higher accolades. These opponents of tort reform and damage limits argue that federal government bureaucrats should not arbitrarily limit a jury’s ability to fairly compensate injured people in such a large, sweeping, and inflexible way.
The dispute is unlikely to be resolved anytime soon. The conflicting parties have argued all the way to the State Supreme Court in many jurisdictions in the U.S. Some state high courts have overturned these laws as unconstitutional. The fate of non-economic damages in the US will likely rest with the US Supreme Court at some point.
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