Why is there a limit on non-economic damages?

More than half of the states in the nation limit non-economic damages in medical malpractice and negligence lawsuits. Non-economic damages include those for pain and suffering, whereas economic damages include items like medical expenses and loss of wages. Whether a non-economic cap is imposed, or not, is determined by the state of jurisdiction. The caps are often debated and change periodically. The Supreme Courts in some states have held that a cap on non-economic damages is unconstitutional.

Instituting a cap on non-economic damages is often a response to the rising cost of medical liability insurance. When Doctors Get Sued (2001, Dodge Publishing) states that an estimated 25% of practicing physicians are sued annually and an estimated 50%-65% are sued at least once in their career. Between 1990-2004, the National Practitioner Data Bank reported almost 200,000 medical malpractice reports for physicians alone. In 2002, 19,000 reports were made for the year. In 2004, the U.S. Congressional Budget Office found that malpractice costs accounted for less than 2% of healthcare spending.

Although there is a limit on non-economic damages in some states, which may have a decreasing value each passing year, there is no artificial limit on recovery of loss of earnings and medical care costs. Furthermore, medical care costs have greatly increased over the years and most wages have increased at a higher rate than inflation. Consequently, it is important that any attorney who pursues a medical malpractice claim understands these economic realities and knows how to obtain evidence to maximize recovery of all economic damages.