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What does a cap on injuries mean for the victims of negligence?

September 15, 2011

The Pop Tort reports:

The Indiana Fair Stage Collapse and Ruing a State Cap – Again.

Indiana-State-Fair-Stage-CollapseBack in 1975, Indiana lobbyist Frank Cornelius, whose clients included the Insurance Institute of Indiana, helped secure passage of a hard $500,000 cap on compensation for patients injured by medical malpractice in Indiana.  On October 7, 1994, Cornelius wrote an op ed in theNew York Times but it’s not what you think.  The article was called “Crushed by my own reform,” and he wrote about the tragic, horrible mistake he made lobbying for this cap, saying he “rue[s] that accomplishment.”  Here’s why. Beginning in 1989, Frank Cornelius experienced a series of medical catastrophes that resulted in his wheelchair confinement, respirator-assisted breathing and constant physical pain. Though his medical expenses and lost wages amounted to over $5 million, his claims against both the hospital and physical therapist at fault settled for a mere $500,000 – the cap.  (The Times archives don’t go back that far, but you can find lots of reference to this article like herehere.)

Why is it that people don’t seem to realize the impact of these callous, one-size-fits-all caps until something happens to them?  Or to 160 people in a horrific train collision?  Or when environmental catastrophes occur like the BP explosion and oil spill?  Or when a horrifying stage collapse kills seven people and injures more than 40?  Who exactly do people think are hurt by caps?

Turns out that Indiana doesn’t just cruelly cap compensation for medical malpractice victims.  It also severely caps responsibility for the stage collapse – at $5 million.  This is about what one catastrophically-injured person – someone like Frank Cornelius, say – might need just to survive.  Or as the Indianapolis Star Tribune put it:

Consider this: If the families of the seven people killed each received the maximum allowed under the law, those payments would eat up $4.9 million — leaving only $100,000 to split among the more than 40 other people injured. The medical bills of just one victim who spent more than a few days in the hospital would easily eclipse that.

The bottom line is not pretty. Despite the state’s pledge to pay out the liability funds as quickly as possible, the sheer number of injuries and deaths means victims and their families are not likely to receive the $700,000 maximum allowed under law. And many are likely to receive payouts far short of their actual medical bills.

Indiana state Rep. Ed DeLaney (D-Indianapolis) says, “This is a place where we actively invited people to come, we chose not to regulate, and then we chose not to shut (the concert) down. Our role is so deep that we need to take care of our people.” So he plans to introduce a legislation to increase the cap, although he admits that even this effort may result only in a one-time only waiver of the cap and not a permanent change in state law.  I’m sure the Insurance Institute of Indiana’s new lobbyist is working overtime to make sure that doesn’t happen.  And looks like he/she may have some allies, like “Senate Appropriations Committee Chairman Luke Kenley, R-Noblesville, who says, ‘I probably would not be in favor of that, not a general raising of the cap. I think this is a call to arms by trial lawyers a little bit’ and ‘Once you start arguing whether a cap should be raised one time, you should be saying, “Do we want the cap raised in all cases?”‘  Uh, yeah.

The Star Tribune notes, “there is precedent for stepping outside the lines in the wake of a major tragedy — both in Indiana and elsewhere.”  For example,

[I]n Minnesota, after the 2007 bridge collapse that killed 13 and injured more than 100 others, the Legislature waived its existing liability cap of $1 million per occurrence. In all, the state ended up paying out a total of $38 million to victims.  None of the lawyers took any fee. …

“When the legislature passes those kinds of (liability caps), they don’t really think about that kind of catastrophic event until it happens,” said Carla Ferrucci, executive director of the Minnesota Association for Justice, a trial lawyers group. “What if (victims) need to have lifetime outside health-care support? And with medical bills being what they are, it’s pretty easy to rack up a million-dollar medical bill.”

And what about taxpayers who might argue that the state shouldn’t pay these victims?  Well, when victims like this aren’t compensated, they’re forced onto Medicaid.   Taxpayers are gonna pay, one way or another.

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