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How the Justice System Caps You

Mon, 02/23/2015

Gregory Posch, student intern Jacoby & Meyers, LLC

According to the Consumerist, General Motors’ (GM) ignition switch vehicle defect might have been detected much sooner if the justice system did not have its flaws. GM and federal regulators knew of the deadly defect before the issue was made known to the public, while the legal system helped conceal the defect for almost a decade. Families pursuing legal action against GM were brushed off because of high legal costs, or because they had settled outside of court and agreed to confidentiality.

The legal costs have become too high to litigate in most states because state laws have capped awards for noneconomic damages, limited punitive damages, or changed the process on how damages are assessed. Caps place a ceiling on the amount of money the injured can receive in compensation.

  • Noneconomic damages are generally used to make up for the loss of enjoyment someone has experienced in their life due to injury.  Common examples include pain and suffering and emotional distress.
  • Punitive damages are used for punishment and deterrence, and are awarded when the defendant's conduct is found to be especially harmful.

These cap laws create an elevated risk in addition to those associated with a high expense of competing against a large corporation like GM. This leaves law firms reluctant to take on the challenge of such a lawsuit.

In 2007, a Wisconsin family was denied representation because the value of their family member's life, which was killed in a 2006 Cobalt accident, was too small to justify the lawsuit. The damage cap allowed only $350,000 for the value of the teen’s life--this is the maximum recovery of loss under Wisconsin law. The cost to firms of taking on such a lawsuit can easily meet or exceed such caps. These laws, along with confidential settlements have helped conceal the true damages of the ignition switch defect from the public.

Families are bound by settlement agreements to limit the amount of information they may disclose. If these families do not comply with the agreement then they face losing their whole settlement with GM. Families have attempted to bring lawsuits against GM, but have experienced difficulties because the lawsuits known against GM were not allowed to be disclosed to the public. This confidentiality requirement in the legal system, along with its cap laws on damages, hurts consumers across the nation. Caps do not account for the severity of injury, and apply regardless of any particular circumstances regarding the case at hand, denying the right of individual judges and juries from assigning values to damages given the nature of particular cases.

The American Tort Reform Association (ATRA), a pro-tort reform organization whose members are largely liability insurance companies and large corporations, shows many states have enacted tort reform laws placing a cap on noneconomic damages. California has placed a noneconomic cap in medical liability cases at $250,000. The California Supreme Court upheld this cap, claiming that it did not violate equal protection or due process. Georgia has limited noneconomic damages to $350,000 per healthcare provider, with an overall aggregate damage limit of $1.05 million, and North Dakota has limited noneconomic damages in medical liability cases to $500,000. These are just a few examples of the many states that have implemented anti-tort laws placing a cap on noneconomic and punitive damages.

As we can see, the justice system's flaws are multifarious, with high court costs and an increased risk due to so called “tort reform” laws placing caps on noneconomic and punitive damages. These caps limit the legal capabilities needed to litigate against large corporations such as GM. GM’s cases illustrate how deadly issues such as the ignition switch defect might be hidden and allowed to continue because of tort reform. Luckily for its client, Jacoby & Meyers has experienced personal injury attorneys that can most often help.

If you or someone you know has experienced serious injury or death as a result of this automobile defect or car accident contact Jacoby & Meyers for a free case evaluation.