TN gov signs bill placing caps on lawsuit payouts

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  • June 16, 2011

NASHVILLE, Tenn. – A measure to cap payouts for medical malpractice and other civil cases is good for business in Tennessee, said Gov. Bill Haslam, who signed the bill Thursday. The law places a $750,000 cap on non-economic damages such as pain and suffering, and the cap will be raised to $1 million in cases involving serious spinal cord injuries, severe burns or the death of a parent of minor children. Punitive damages are capped at twice the amount of compensatory damages or $500,000, whichever is greater. “We wanted to make sure we did everything we could to protect victims’ rights, but also have a predictable playing field for businesses,” said the Republican governor. Valerie Nagoshiner, acting director of the National Federation of Independent Business in Tennessee, said the law should help. “Small businesses are especially vulnerable to frivolous lawsuits,” Nagoshiner said in a release. “It’s hard enough for them to defend themselves against even the weakest of claims, but one outrageous jury award or one frivolous lawsuit can be the difference between a small, family-owned business staying open or closing for good.” Critics say the law weakens company accountability and juries should decide damages. “Everyone should be held accountable when they make a mistake,” said Democratic Sen. Andy Berke of Chattanooga. “All our jury system does is ensure that we have a fair way to judge that. Unfortunately, too often in our society we are seeing personal responsibility and accountability go by the wayside.” Even though the legislation has passed, one issue that remains unresolved concerns bodily injury. The original House version sought to lift the $750,000 cap on non-economic damages if the defendant caused the injury while committing a felony. But the chamber agreed to Senate language to only lift the cap if the defendant is found to have intended to cause bodily injury. Republican Rep. Dennis Vance of Savannah, the main sponsor of the House version, said Thursday that he’s filed legislation for next year to adopt the House standard. “I fully anticipate that being one of the first things we do when we get back in session,” he said. Also Thursday, Haslam signed the state’s $30.8 billion spending plan for the fiscal year that begins July 1. It includes $71 million for disaster relief from recent storms and flooding, and a 1.6 percent raise for state employees, their first pay increase in four years.