To limit liability and increase predictability, scholars and policymakers have long focused on capping damages awards. In particular, they have been worried that there are many runaway jury awards for non-economic damages (i.e., pain and suffering). Because these are not based on tallies of medical bills or lost wages, these are the least predictable component of the jury’s award. Still, statutory caps on damages effectively nullify the jury’s determination (and the trial judge’s oversight) of how much to compensate a plaintiff for pain and suffering. The laws substitute an arbitrary maximum instead (which, in many states, has not adjusted with decades of inflation).
There is now a cottage industry of scholarship that tries to understand the effects of these state caps on payouts, the supply of physicians, liability insurance, economic damages awards, and the aggregate cost of medical care (which may decrease or increase). (See a synthesis of the literature.)
In new work with John Cambpell and Bernard Chao, I study a different way to cabin jury awards for non-economic damages. Rather than capping runaway awards ex post, some states have tried to prevent them in the first place, by manipulating what a jury hears in closing arguments. Continue reading