Damage Caps in Texas Personal Injury Lawsuits

Personal injury claims in Texas include damages stemming from car accidents, medical malpractice, and other “tort” actions. Tort is an old English legal term which basically means the action (or omission) of one person which leads to the injury of another person. These actions and omissions can be fairly broad and courts often look to the state of mind of the individual who caused the injury, relying on the negligence standard. The negligence standard includes:

  1. The defendant had a duty to the injured party
  2. The defendant breached that duty
  3. The defendant’s negligent conduct was the cause of injury
  4. The victim was injured

Over the past decades, Texas has placed limits on the amount of damages a victim may receive in limited situations, despite the proof that the defendant was negligent and breached their duty of care to the victim. These limits distinguish between different types of damages – punitive and actual. Punitive damages are awarded in limited situations where the defendant’s negligent conduct is reckless or malicious. Actual damages are the actual amount of damages which a victim sustained as a result of the incident, including medical care.

“Tort reform” has been a hot-button issue throughout Texas in recent years, as various special interest groups lobby the legislature to increase and decrease damage caps. In 1995, the Texas Legislature passed Senate Bill 25, which capped punitive damages at the greater of:

  1. $200,000; or
  2. Two times economic damages plus an amount not to exceed $750,000 for noneconomic damages.

This legislation further stated that “nominal actual damages” could not support punitive damage awards, unless the court determined that the defendant acted with malice. Additionally, the legislation imposed strict interpretation of when punitive damage could be awarded, changing the burden of proof from a mere “preponderance of the evidence” to “clear and convincing evidence.”

During 1995, Texas also passed Senate Bill 31, which altered the penalties and procedures as applicable to frivolous litigation stemming from personal injury claims. A person who filed a claim arising from the frivolous action could be forced to pay court costs, attorney’s fees, and other costs from the lawsuit.

This damage cap remained in place for nearly 10 years, until the 2003 Texas legislative session. The “Medical Malpractice and Tort Reform Act of 2003” capped noneconomic damages for medical malpractice victims at $250,000, and even $100,000 in certain public hospitals. This legislation further prohibited personal injury attorneys from receiving expenses if their client won the lawsuit, and also placed restrictions on contingency fee arrangements. This change in damages not only capped the malpractice recovery but also altered the negligence standards for medical professionals in Texas.

The existing damage caps for medical malpractice claims has led to an increased number of medical professionals throughout the state who do not have to worry that they will lose millions of dollars from a medical malpractice claim. Unfortunately, this has also impacted victims, who might find themselves unable to file a claim for the full amount of their damages.