Caps On Damages Restrict Injured Person's Right To Receive Full Damages


As part of its tort reform legislation, the Ohio legislature enacted a statute that limits the amount of money a jury can award for what are known as non-economic damages. When a person is injured because of someone’s negligent act, the law divides that person’s harms and losses into two categories: economic losses and non-economic losses. Economic losses include both past and future estimates for medical bills, lost wages, and other out of pocket expenses. Non-economic losses include money awarded for pain, loss of ability to do various activities, worry, anxiety, permanent scarring, and other intangible harms.

The law places no limit on the amount of money that can be awarded for economic losses. However, the law does now limit the amount that can be paid for non-economic harms. In most cases, the maximum a person can recover for non-economic losses is $250,000. The law also allows another measure of non-economic losses that permits non-economic damages based on a formula of three times the economic losses up to a maximum of $350,000. The statute exempts certain claims from these caps. In what are viewed as extremely serious claims, caps are removed for claims that involve permanent and substantial deformity, loss of use of a limb, loss of a bodily organ system, or injuries so serious that the person can no longer care for himself in the activities of daily living.

In most cases, an injured person will be subject to these damage caps. The best way to understand the caps is to take several examples. Assume that a person (age 40) sustains a very serious ankle fracture in an auto accident. The person has medical bills of $40,000 and lost wages of $20,000. Although the bones heal, the ankle joint deteriorates due to arthritis brought on by the fracture. In order to walk without pain or swelling, the person must permanently wear a brace on his ankle. An avid skier and tennis player, this person can no longer participate in those activities. He cannot be on his feet for longer than a few hours at a time. At the end of the work day, this person takes off his brace, ices it, and spends the remainder of the day off of his feet. All would agree that this person’s quality of life has been severely affected. Under the law on caps, this person would be limited to a recovery of $310,000 regardless of how much money a jury believed he was entitled to receive. The $60,000 economic damages would be recoverable, but any award for non-economic damages would be limited to $250,000.

If we take these same facts, but this time let us assume that the person will definitely need surgery in a few years to fuse his ankle and the cost of the surgery will be $60,000. Now the injured person’s economic damages are $120,000. In this instance, the measure of damages should be computed using the formula. If one multiplied his economic damages by 3, the figure would be $360,000. However, the statute says that using the formula, the maximum amount cannot exceed $350,000. Under this example, the injured person would be limited to a recovery of $470,000 ($120,000 plus $350,000).

Prior to the change in the law (which occurred on April 7, 2005), the jury was the sole decider of how much money an injured person was entitled to receive. Proponents of the law (insurance companies and manufacturers) argued that these protections were needed because juries could not be trusted to make reasonable awards. Prior to the change in the law, judges had ways to correct a jury verdict if it was far greater than what the evidence called for. A judge could order a remittitur, an order that would require the plaintiff to accept a much smaller figure or face a new trial. Thus, the law already had a procedure in place to deal with unreasonably high jury verdicts.

The new law now impacts almost everyone who is injured seriously and permanently but has not lost the use of a limb or the use of an organ system. Many injured persons have non-economic losses that are greater than $250,000 or $350,000. However, insurance companies no longer have to pay full damages for a person’s harms and losses.

This law does not apply to death claims and a different statute limits damages in medical malpractice claims.  Thus, the law applies to persons who are injured (but not killed) in all types of negligence cases except medical malpractice actions.   

The legislature should undo what it did four years ago. Ohioans are entitled to have all of their harms and losses determined by a jury without any arbitrary limitations. Contact your legislators and have them repeal this very unfair law.