Sunday, July 28, 2013

There is a chance California will vote on increasing the cap on pain and suffering damages

In 1975, California enacted a bill capping pain and suffering damages at $250,000.  That was a generous amount then, but it is one of the, if not the lowest of caps around the country today.  If it were to be adjusted for inflation, the $250,000 value of the cap in 1975, should be $1.1 million today.  For this reason, a new ballot initiative has been proposed to raise the limit of the cap.  If it gathers enough support, it could qualify for the November 2014 ballot.  Unless, the legislature finds a way to compromise and amends the bill before then.

Not surprisingly, the opposing sides of the debate are the predictable ones.  For increasing the limit of the cap are consumer advocates, victims' advocates, plaintiffs' lawyers, medical malpractice victims, among others.  Against it are large corporations, supporters of tort reform, the insurance industry, the medical establishment and organizations that defend them, etc.  Interestingly, those opposing the measure have not been able to find any new arguments other than those that have been proven false so many times.  You would think that, with all their resources, they could come up with something better, or new, or true.

My prediction is that the Legislature will eventually come up with an amendment that will raise the cap to somewhere around $500,000 which is a common amount in other states.

Those advocating for the ballot initiative should be prepared to negotiate for that compromise.  But the most important part of that negotiation has to be to make sure the new law includes a formula to continue to increase the amount periodically, either based on the rate of inflation or in some other way.  That way, once you determine what is a fair amount based on the current value of the dollar, you can make sure the value continues to be the same in the future.  Otherwise, down the road, the measure becomes unfair to victims and a windfall for tortfeasors. 

I don't favor creating caps on damages at all, but if you have to have a cap, increasing the amount and creating a formula to continue to increase it in the future is not a bad compromise.

Unfortunately, like I said, I can see the first part happening but past history suggests a measure to adjust the cap automatically is not likely to be adopted.  But you can always hope...

Here is a link to a recent article on the subject.

Thanks to the TortsProf blog for the link.