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Caps on Non-Economic Damages

The Tort Reform Act

In 2011, the State of Tennessee passed the Tort Reform Act. This legislation placed a statutory cap of $750,000 for non-economic damages in personal injury cases. The legislation included exceptions for catastrophic losses and injuries including those to the spinal cord resulting in paraplegia, quadriplegia, amputation of hands/feet, and extensive burns. In these cases, the cap for non-economic damages is $1 million.

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Proponents of the legislation claim it protects businesses from bearing the burden of fraudulent or malicious claims. The reality is that the legislation protects businesses and their insurers from having to pay victims a fair amount following a serious personal injury.

Non-Economic Damages Caps in America

Many states have caps on non-economic damages. These range between $250,000 to $750,000. Each state has their own guidelines and specifications that personal injury lawyers must follow depending on the type of injury the victim has suffered. In states where non-economic damages caps have been instituted, legislators and business owners claim these caps keep insurance costs down which makes it possible for companies to operate within their state.

Challenges to Non-Economic Damages Caps in Tennessee

The Tennessee Supreme Court recently ruled that caps are not a violation of the law. This followed an earlier ruling by Circuit Court Judge Neil Thomas who ruled that the legislature's attempt to limit non-economic damages in personal injury cases violated citizen's rights.

The judge argued that in a trial by jury, the jury should have the discretion to determine a fair and just compensation for the victim. He further argued that caps violated a plaintiff's right to due process and equal protection per the Tennessee Constitution.

What the Ruling Means for Future Personal Injury Cases

The ruling has upheld non-economic damages caps in personal injury cases throughout the state. However, the Supreme Court did not rule on the constitutionality of non-economic damages caps. This means that there is the possibility in the future to challenge them on these grounds.

It is likely that Judge Thomas will decline to enforce the caps set by the state. If he does this, the defense will no doubt appeal, and the case will make its way back to the Supreme Court. When that happens, they will have to review the constitutionality of non-economic damages caps. If they rule that caps are unconstitutional, it will be a considerable victory for plaintiffs seeking compensation for serious personal injuries and changes to their quality of life.

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