Noneconomic Damage Awards Act Exposed

The Noneconomic Damage Awards Act was part of the 1995 Sourcebook of American State Legislation. It was adopted by ALEC's Civil Justice Task Force at the Spring Task Force Summit April 13, 2002. Approved by full ALEC Board of Directors May, 2002. Amended by the ALEC Board of Directors January 9, 2014. Any language removed from the original version is indicated with strikethrough text and additions are given in bold. (Accessed August 2, 2016).

CMD's Bill Summary

This bill limits noneconomic damages, the payments injured plaintiffs receive as compensation for the diminished "quality of life" caused by the injury. It limits these damages to only the time the plaintiff lived, as opposed to the time he or she would have lived had the injury not occurred.

In 2011 WI Act 2, Wisconsin Governor Scott Walker added punitive damage caps to protect abusive or negligent nursing home providers from financial liability (see Wis Stat 893.555). Wisconsin also limits noneconomic damages in medical malpractice cases (see Wis Stat 893.55).

This "model" legislation attempts to arbitrarily limit the amount a jury can award for pain, suffering, disfigurement, or for the loss of companionship from the death of your spouse to an amount equal to the injured or killed American's lost earnings or $250,000. Thus, it limits corporation's liability for injuring or killing an American even if a jury would have determined that a larger amount was warranted based on the particular facts of the case based on the pain, suffering, disfigurement or loss of companionship that was demonstrated at trial. By limiting the amount available for pain and suffering or loss of a spouse to their lost earnings and medical expenses, it also has the effect of valuing an older or poor American less than a richer American, despite the unique circumstances of the case at hand.

ALEC Bill Text

Summary

The Noneconomic Damage Awards Act provides that an award for noneconomic damages shall not exceed [$250,000][1] or the a fixed amount adopted by the legislature or awarded in economic damages, whichever amount is greater. Economic damages, such as medical expenses and lost income, are fully compensated and are not subject to the limitation.

Model Legislation Policy

{Title, enacting clause, etc.}

Section 1. {Title.}

This Act shall be known and may be cited as the Noneconomic Damage Awards Act.

Section 2. {Definitions.}

The following words, as used in this Act, shall have the meaning set forth below, unless the context clearly requires otherwise:

(A) "Noneconomic damages" means subjective, nonpecuniary damages arising from pain, suffering, inconvenience, physical impairment, disfigurement, mental anguish, emotional distress, loss of society and companionship, loss of consortium, loss of enjoyment of life, injury to reputation, humiliation, and other nonpecuniary damages.

(B) "Economic damages" means objectively verifiable pecuniary damages arising from medical expenses and medical care, rehabilitation services, custodial care, loss of earnings and earning capacity, loss of income, burial costs, loss of use of property, costs of repair or replacement of property, costs of obtaining substitute domestic services, loss of employment, loss of business or employment opportunities, and other objectively verifiable monetary losses.

Section 3. {Damage awards.}

In any personal injury action, the prevailing plaintiff may be awarded:

(A) Compensation for economic damages suffered by the injured plaintiff; and

(B) Compensation for the noneconomic damages suffered by the injured plaintiff not to exceed:

(1) $250,000; or [INSERT DOLLAR AMOUNT]; [1] or

(2) the amount awarded in economic damages, whichever amount is greater.

Section 4. {Special damages findings required.}

(A) If liability is found in a personal injury or wrongful death action, then the trier of fact, in addition to other appropriate findings, shall make separate findings for each claimant specifying the amount of:

(1) any past damages; and

(2) any future damages and the periods over which they will accrue, on an annual basis, for each of the following types of damages:

(a) medical and other costs of health care;

(b) other economic loss; and

(c) noneconomic loss.

(B) The calculation of all future medical care and other costs of health care and future noneconomic loss must reflect the costs and losses during the period of time the claimant will sustain those costs and losses. The calculation for other economic loss must be based on the losses during the period of time the claimant would have lived but for the injury upon which the claim is based.

Section 5. {Severability clause.}

Section 6. {Repealer clause.}

Section 7. {Effective date.}

[1] “To allow legislature to make a judgment as to what is appropriate for the state and that particular period of time.” State legislatures have adopted statutory limits on noneconomic damages ranging from $250,000 to $1 million. The ALEC Noneconomic Damage Awards Act recognizes that the appropriate amount is a matter of public policy for consideration of each individual state. Due to the importance of protecting affordable and accessible healthcare, a few states have adopted lower limits on noneconomic damages in medical liability case than applicable in other personal injury cases. Some states have adopted a two-tiered limit, permitting higher noneconomic damage awards in cases involving injuries that are defined as catastrophic in nature. For more information on state-by-state limits, contact ALEC’s Civil Justice Task Force.