Product Safety News

How Product Liability Damage Caps Would Discriminate Against and Harm Low-Income Americans

So-called product liability "reform" legislation would severely impact low-income Americans. It would limit damages in successful claims, and could even cut off claims completely. Here are some previously proposed provisions, and how they would affect the poor.

Limits on Damages Affect Low-Income Plaintiffs More Than High-Income Plaintiffs

Non-economic damage caps disproportionately affect low-income Americans because their economic damages are less than those of richer people. Non-economic damages are for injuries that cannot be easily translated into dollar amounts, but are still real injuries that should be compensated. These injuries include pain and suffering, loss of sexual or reproductive function, and other injuries which, though they are costly to the individual affected, do not result in any loss of income or added expense. Also known as quality-of-life damages, this compensation covers the most severely injured patients, such as people who are paralyzed and can't use the bathroom without assistance or a child who is brain damaged and will never have a chance to attend school, get married and work.

• Should damages for an injury be more for the rich than for the poor? Imagine two people: an insurance executive earning $1,000,000 per year and a minimum wage worker. If both suffered the same painful, disabling injury, the insurance executive would have much higher economic damages. But is that how we should measure a person's worth – by how much money he or she makes? A limit on non-economic damages is a greater burden for the worker than for the executive. In A Tale of Two Women, Wall Street Journal reporters outline how caps are "turning out to have the unpublicized effect of creating two tiers of malpractice victims."
  
  Often, product liability "reform" legislation caps non-economic damages in certain actions at $250,000, no matter how painful or debilitating the injury, and no matter how long it persists. This means that children and other non-wage (or low-wage) earners with the most severe injuries will be those most negatively affected by an arbitrary cap.

• Abolishing joint liability harms the poor. A person who is hurt by the actions of others should not be stuck with the bills while those responsible for the injuries argue about who should pay, and how much. Joint liability enables an injured person to hold accountable any parties responsible for causing that injury and to fully recover his or her damages from the wrongdoer. Preserving joint liability means that an injured person doesn't have to specify in court every person who might have played a role in the injury. It also means that if one of the defendants is bankrupt or otherwise unable to pay, the injured person can still be fully compensated.

• Caps on punitive damages discriminate against low-income Americans. Punitive damages are awarded in the worst cases of abuse, such as when defendants recklessly endanger consumers. While rare, these damages play a critical role in deterring malicious conduct. For instance, when punitive damages are awarded in medical malpractice cases, it is usually because the defendant sexually abused a patient while the patient was anesthetized. In product cases, they are often awarded when it is proven that a manufacturer knew that the product is dangerous, but sold it anyway.

Often, product liability "reform" legislation caps punitive damages at three times the plaintiff's economic damages, or $250,000, whichever is higher. If a patient is sexually abused by her physician, the punitive damages could be capped as low as $250,000, no matter how outrageous the abuse.