When a person brings a personal injury or civil action lawsuit, the general aim is usually to obtain monetary compensation for damages. This can be medical expenses, lost income, pain and suffering, emotional distress, and so on. But in certain situations, there are statutory restrictions on how much money a plaintiff can receive — these are referred to as damage caps.
Damage caps can have a considerable impact on the outcome of a lawsuit and attorneys’ approach. Whether plaintiff, defendant, or just someone seeking to know more about how civil litigation works, it’s worth understanding how damage caps work, where they occur, and what impact they have on justice and accountability.
What Are Damage Caps?
Damage caps are legal limitations on the amount of money a plaintiff can receive in a civil lawsuit. These caps can apply to different types of damages, such as:
- Economic damages: Tangible losses like medical expenses, lost income, or property damage.
- Non-economic damages: Intangible losses like pain and suffering, emotional distress, and loss of companionship.
- Punitive damages: Additional amounts awarded to punish a defendant for especially harmful or egregious conduct.
Most damage caps apply to non-economic and punitive damages, rather than economic damages, which are usually easier to quantify.
Purpose of Damage Caps
The rationale behind damage caps varies, but the most commonly cited reasons include:
- Preventing excessive jury awards
- Encouraging economic growth by protecting businesses and healthcare providers
- Reducing insurance costs
- Avoiding unpredictable litigation outcomes
- Controlling healthcare and malpractice insurance premiums
Supporters argue that caps create a more stable legal environment. Critics say they limit access to justice and can unfairly reduce compensation for victims who suffer serious, life-altering injuries.
Types of Damage Caps
Damage caps differ depending on the type of case and jurisdiction. Some of the most common types of caps include:
Non-Economic Damages Cap
These caps limit how much a plaintiff can recover for intangible losses. For example, a person who suffered severe emotional trauma or chronic pain might receive a maximum of $250,000 in certain states, regardless of the severity.
Example:
In California medical malpractice cases, non-economic damages (like pain and suffering) were historically capped at $250,000 under MICRA (Medical Injury Compensation Reform Act). As of 2023, these caps have increased, reflecting inflation and modern standards.
Punitive Damages Cap
Punitive damages are intended to punish and deter especially egregious behavior. Many jurisdictions impose caps on these to prevent excessive or arbitrary awards.
Some states limit punitive damages to a specific multiple of compensatory damages. For instance, the cap might be three times the amount of compensatory damages, or a fixed maximum (e.g., $500,000), whichever is greater.
Total Damages Cap
A few jurisdictions impose a total cap on all damages combined. These types of caps are less common and often face constitutional challenges.
States That Have Damage Caps
Damage caps vary significantly from state to state. Here are examples of how some states handle caps:
- California: Medical malpractice non-economic damages were capped at $250,000 under MICRA. New legislation has increased this limit to $350,000 and will continue increasing incrementally.
- Texas: Medical malpractice non-economic damages are capped at $250,000 per claimant and $500,000 in total for all healthcare institutions.
- Florida: The Florida Supreme Court ruled that damage caps in medical malpractice wrongful death cases were unconstitutional.
- Missouri: Has a $400,000 cap on non-economic damages in medical malpractice cases, raised to $700,000 in catastrophic injury cases.
- North Dakota: Non-economic damages are capped at $500,000 in medical malpractice lawsuits.
- Nevada: Caps non-economic damages in medical malpractice cases at $350,000.
It’s important to note that caps are not universal and may not apply to all types of personal injury cases. In states without caps, juries and judges have more discretion to determine damages.
Federal vs. State Damage Caps
Most damage caps are imposed at the state level, particularly in personal injury, wrongful death, and medical malpractice cases. However, in certain federal cases — such as those involving federal employees or claims against the U.S. government — caps may also apply.
Federal Tort Claims Act (FTCA):
Under the FTCA, individuals can sue the federal government for personal injury or wrongful death caused by negligence. While the FTCA itself doesn’t impose a strict cap, damages are often limited by state law where the claim occurred.
Constitutional Challenges to Damage Caps
Damage caps have been the subject of ongoing legal debate. Many courts have ruled on whether caps violate state constitutional rights, such as:
- Right to a jury trial
- Equal protection
- Due process
- Separation of powers
Some state supreme courts — like those in Illinois, Florida, and Washington — have struck down damage caps, ruling they interfere with the jury’s role in determining damages.
Others have upheld caps, emphasizing legislative authority to balance public policy concerns.
Because of this, damage cap laws can change over time based on new court rulings and legislative reforms.
How Damage Caps Affect Plaintiffs and Defendants
For Plaintiffs
- Lower Compensation: Even with severe injuries, plaintiffs may not be fully compensated for their suffering.
- Reduced Leverage: Caps may reduce the plaintiff’s negotiating power in settlement talks.
Unfair to Severely Injured Victims: Victims of catastrophic injuries (such as paralysis or brain injury) may receive the same amount as those with less serious harm.
For Defendants
- Greater Predictability: Helps businesses and insurers assess risk and liability exposure.
- Protection Against Large Verdicts: Limits the financial impact of lawsuits, especially in industries prone to litigation (like healthcare).
Lower Insurance Costs: May help reduce malpractice and liability insurance premiums.
Damage Caps in Medical Malpractice Cases
Medical malpractice lawsuits are among the most common cases where damage caps apply. Proponents of caps argue that they:
- Lower the cost of healthcare
- Prevent physicians from practicing “defensive medicine”
- Encourage doctors to continue practicing in high-risk specialties
However, opponents argue that caps do not significantly impact healthcare costs and often deny justice to patients who are seriously harmed.
Exceptions to Damage Caps
Certain circumstances may exempt a case from damage caps:
- Gross negligence or intentional harm
- Violation of civil rights
- Cases involving death of a minor
- Product liability cases (depending on the jurisdiction)
Additionally, many states allow exceptions to punitive damages caps if there is evidence of fraud, willful misconduct, or intent to harm.
How to Navigate Damage Caps in a Lawsuit
If you’re pursuing a civil lawsuit, understanding damage caps is crucial for setting realistic expectations. Here’s how an experienced attorney can help:
- Evaluate Your Claim
A lawyer can determine whether damage caps apply in your case based on your state and the type of claim. - Calculate Total Damages
Attorneys will assess all categories of damages: medical bills, lost wages, pain and suffering, and more. - Strategize Around Caps
In some cases, lawyers may structure claims to emphasize economic damages (which often aren’t capped) or pursue alternative causes of action. - Advocate for Exceptions
If a case qualifies for an exception (e.g., gross negligence), a lawyer may argue that the cap should not apply. - Negotiate Effectively Understanding the limits of compensation helps lawyers negotiate settlements that reflect what’s realistically achievable.
About the Author
Neil Bhartia
Neil Bhartia isn’t your typical, stuffy attorney that you see on TV. While some have their sights exclusively on money and treat their clients like a number, Neil takes a personal interest in every single client he has. As an empath, Neil understands that people that seek legal help are typically in an involuntary, and stressful situation, and he goes out of his way to diffuse the stress and educate clients on each every detail of the legal process.
