One Size Does Not Fit All In Pain And Suffering Damages

A one size fits all cap on pain and suffering damages, such as, $200,000, assures that the least injured are fully compensated and that the most injured are definitely not fully compensated. Balancing the books on the backs of those who suffer the most is grossly unfair. I will try to put it plainly: pain and suffering damages should be based upon the actual pain and suffering that the victim has experienced in the past and is reasonably expected to experience in the future.

A glaring flaw in most caps proposed for pain and suffering (non-economic) damages is that a one size fits all cap, such as, $200,000, assures that the least injured are fully compensated and that the most injured are definitely not fully compensated. Balancing the books on the backs of those who suffer the most is grossly unfair. The Legal Theory Blog posts an abstract from a paper that has one half of a good idea. The paper appears to understand the unfairness that will result from any mechanical method of calculation or limitation imposed by statute upon a jury. Unfortunately, it then goes on to devise a scheme that starts wtih the medical expenses and applies multipliers based on certain facts. The paper is right to want pain and suffering damages to be determined by a jury of citizens on a case-by-case basis but very wrong to want to require a relationship to the medical expenses.

I will try to put it plainly: pain and suffering damages should be based upon the actual pain and suffering that the victim has experienced in the past and is reasonably expected to experience in the future.

The Blog’s Download of the Week is Putting a Price on Pain-and-Suffering Damages: A Critique of the Current Approaches and a Preliminary Proposal for a Change by Ronen Avraham. Here is the abstract:

Pain-and-suffering awards make up approximately fifty percent of total awards, at least in some areas of personal injury cases. It is the subject of almost every tort reform, including the current administration attempts to reform medical malpractice law. Is there a rational way to quantify pain-and-suffering awards? In this paper, written for a special centennial issue of NU law review, I explain some of the suggestions for pricing pain-and-suffering put forward in the literature and preliminary offer a different way to look at the problem.

The theoretical approach I adopt in this paper to the pricing of pain-and -uffering is to analyze it from a law and economics standpoint, which also incorporates a limited notion of global fairness. My starting point is the “majority view” which states that efficient tort law requires pain-and-suffering damages to be awarded so tortfeasors will internalize the full social costs of their conduct, including the non-monetary ones. My focus in this paper is the fundamental unresolved issue of how to price such damages.

After reviewing various proposals for pricing pain-and-suffering, I argue that all of these proposals are analytically problematic, and undesirable as a matter of policy. I then propose a new way to price pain-and-suffering. Under my proposal, a system of age-adjusted multipliers would be assigned to plaintiffs’ medical costs (but not to other economic costs) in order to calculate the pain-and-suffering component. The multipliers would be non-binding, allowing the jury to fairly deviate when justice required. This system solves the problem of unpredictability and, at the same time, approximates optimal deterrence, all at very low administrative costs. It combines the advantages of efficiency and fairness by having a jury determine awards on a case-by-case basis, without the high complexity of assessing pain-and-suffering losses present in other proposals.