Bill would nearly double Md. cap on noneconomic damages

Maryland lawmakers are weighing legislation that would raise the cap on noneconomic damages in personal injury and wrongful death cases, a change that supporters say would more fairly compensate people for their pain and suffering.

Business groups and insurers, however, are staunchly opposed to the bill and claim it would cause insurance rates to skyrocket.

Sen. Jeff Waldstreicher, a Montgomery County Democrat who sponsored the bill, asked delegates this week to consider why there is no cap on economic damages — such as for medical bills and lost wages — but there is one for noneconomic damages, which cover pain and suffering, disfigurement or mental anguish following the death of a loved one.

“Ask yourself why it’s that side of the ledger where the current cap is so restrictive,” Waldstreicher told the House Judiciary Committee. “Allow our constituents to recover more on the more important side of the ledger.”

Under current law, noneconomic damages in Maryland are capped at $950,000. The cap increases by $15,000 each year. There is no cap on economic damages or punitive damages.

Waldstreicher’s proposal originally eliminated the cap on noneconomic damages entirely, but came out of the Senate Judicial Proceedings Committee amended. The new version of the bill would nearly double the current cap to $1.75 million. The cap would also increase by $20,000 per year.

The bill does not apply to medical malpractice cases, which are handled under a different statute, and it does not change existing liability caps in suits against state or local governments, Waldstreicher said. The only exception is the Maryland Transit Administration, which is not covered under the Maryland Tort Claims Act, according to a fiscal note attached to the bill.

Maryland is among just 10 states that cap noneconomic damages in personal injury cases, the senator argued, and the 40 states that have no caps do not have astronomical insurance rates.

The cap on noneconomic damages is also particularly unfair to women and people of color, Waldstreicher said. Economic damages, such as those for lost wages, benefit people who earn more money, he said, while capping noneconomic damages hurts people who are systemically paid less for their work or who stay at home to be caretakers.

Opponents argued that the current cap provides fair compensation while also protecting businesses and insurers from “nuclear verdicts,” or massive payouts sometimes awarded by juries.

“Nearly doubling the cap on noneconomic damages would inevitably lead to higher insurance rates and increased costs that would be passed onto Maryland residents and businesses,” Mary D. Kane, the president and CEO of the Maryland Chamber of Commerce, said in a letter issued this week.

“This shortsighted legislation puts our state at a competitive disadvantage and hinders our ability to attract and retain job creators.”

Carville B. Collins, a lawyer with DLA Piper who spoke on behalf of Maryland Employers for Civil Justice Reform, said the original cap on noneconomic damages was created in the 1980s in response to a crisis in insurance availability and affordability. A task force ultimately recommended the cap after studying the issue.

“Why ever would the General Assembly want to risk inviting back an insurance crisis by removing these caps?” he asked the Senate Judicial Proceedings Committee at a hearing in February.