The Press-Citizen has an editorial today speaking out against damage caps in Iowa. Having both a legal and an insurance background, I thought I’d put my 2¢ into the mix.



On the one hand, the PC has it right that Iowa is not generally known for it’s unreasonably large jury awards. As this survey of legal professionals shows, Iowa juries are considered among the most fair in the nation. I’d like to think it’s because we have a good deal of common sense – at least, where verdicts are concerned.



I also understand where the plaintiff’s bar gets quite worked up at damage caps set as low as $250,000. Given the “going rate” on medical bills, legal fees, and so on, and given that it doesn’t take into account the egregiousness of the tort or the amount of pain and suffering, this could result in a statistically significant number of plaintiffs being under-compensated.



Of course, because plaintiffs' attorneys generally make their money by fees taking 33-40% of any award given to the plaintiff, contingent upon recovery, this law could slice into their pocketbooks quite a bit as well. Not that anyone is crying about poor, poverty-stricken lawyers. But they are the source of the lobbying power that brings this issue into the public arena, though they generally neglect to mention their own interests are being served along with the injured plaintiffs’.



On the other hand, just because the Iowa court system is doing well so far in comparison with other states, doesn’t mean it’s guaranteed to continue that way. I would think any reasonable person could conclude that there is a point at which intangible “pain and suffering” awards become ridiculously punitive and too stifling of a free marketplace.



The temptation to bring frivolous lawsuits in order to try to “ring the bell” with a huge verdict, or to use such a possibility to coerce nuisance-value “cost of defense” settlements in sufficient numbers to eventually culminate in increased insurance rates, apparently proves irresistible to many of my trial attorney colleagues.



I would therefore be in favor of a cap of some sort, to prevent the type of over-the-top awards that have occurred in other states. Perhaps try something in line with the US Supreme Court’s rulings on punitive damages, where the test is whether or not the damages are in proportion to the tangible damages incurred. Perhaps in the five to ten multiplier range? For example, a claimant who has $5000 in lost wages and medical bills, he or she would be capped at a multiplier of, say, seven times that amount, or $35,000 in past or future “pain and suffering” intangible damages. That would leave in the flexibility for those who are very severely injured in a very egregious manner to obtain the larger awards, while setting a reasonable cap that would track with jury trends in the past.



It seems a common-sense solution that should satisfy all but the greediest on both sides. Therefore, because we’re talking about the political system, it’s likely that either: 1) it’s never going to be proposed, or 2) if proposed it will be fought tooth and nail by both liberal and conservative politicians.