Non-economic damages caps are somewhat controversial tort reforms to limit (i.e., "cap") damages for intangible harms such as severe pain, physical and emotional distress, disfigurement, loss of the enjoyment of life that an injury has caused, including sterility, loss of sexual organs, physical impairment and loss of a loved one, etc.
Non-economic damages compensate injuries and losses that are not easily quantified by a dollar amount. Also known as quality-of-life damages, this compensation covers the family of victims who have died, or severely injured victims.
There are further disputes over if these caps would reduce overall medical costs for patients at all. A study by the U.S. Congressional Budget Office published in 2004 found that “Malpractice costs account for less than 2 percent of health care spending." Although tort reformists cite other possible effects of limiting tort liability, such as reducing the extent to which physicians practice “defensive medicine” and preventing widespread problems of access to health care.
Tort reform supporters argue that it is difficult for juries to assign a dollar value to these losses with the guidance they are normally given. They claim that there is no basis for non-economic damages, and uncapped non-economic damage would violate the equitable principles of justice by being inherently quite random, because different juries will always come to different results. Because of this highly charged environment of personal injury trials, they fear some unbounded non-economic damage awards. In Ernst v. Merck, a Texas Vioxx products liability case, the jury issued a verdict of $24 million in non-economic damages for a widow of a 59 year old triathelete who died from arrhythmia, or an irregular heartbeat that could have been prevented had Merck provided warnings about the drug. Tort reform supporters point out the widow had not been married a long time, and suggest this award was excessive.
In contrast, opponents of tort reform contend that jurors should assess damages on a case-by-case basis and that damages should not be arbitrarily capped by a legislature. Limiting non-economic damages would fail to provide fair compensation to people who are "crippled, disfigured, blinded or live in severe pain or humiliation" as a result of a negligent hospital or doctor. For example, in some jurisdictions with $250,000 caps on non-economic damages, a judge would be required to reduce an award of $1,000,000 in damages for pain and suffering down to $250,000 even in a case where a victim was rendered quadriplegic by a drunk driver or by a dangerously defective product.
For example, Steven Olsen is blind, brain damaged and physically retarded because of medical negligence. When Stephen was two years old, he fell on a stick in the woods while hiking. The hospital gave Steven steroids and sent him home with a growing brain abscess, although his parents had asked for a CAT scan. The next day, Steven Olsen came back to the hospital comatose. At trial, medical experts testified that had he received the $800 CAT scan, Stephen would have his sight and be perfectly healthy today. The jury awarded $7.1 million in "non-economic" damages for Steven's preventable severe disability and suffering. However, the jury was not told of a state cap on non-economic damages. As a result,the judge was forced to reduce the amount to $250,000. The jurors only found out that their verdict had been reduced by reading about it in the newspaper.
In contrast, critics of caps contend and state courts have held that legislatures violate the principle of separation of powers when they attempt to impose arbitrary damage caps on juries, who function as part of the judicial branch of government. In Best v. Taylor Machine Works, the Illinois Supreme Court ruled that a $500,000 cap on non-economic damages functioned as a "legislative remittitur" and invaded the power of the judiciary, in violation of the separation of powers clause. The court noted that courts are empowered to reduce excessive verdicts where appropriate in light of the evidence. The cap, however, reduced damages by operation of law, without regard to the specific circumstances of the case.