Kentucky Bills Could Lower Lawsuit Costs and Improve Legal Climate

Press Releases | February 7, 2022

These proposals to address increasing tort costs would help reform Kentucky’s increasingly unfriendly liability climate and improve overall costs for families across the board.

Kentucky lawmakers are seeking to improve the state’s liability climate this legislative session.

Last week, Senator Ralph Alvarado (R-Winchester) and Representative Josh Bray (R-Mount Vernon) introduced Senate Bill 142 and House Bill 455, respectively. Each bill proposes a constitutional amendment to allow the state legislature to set caps on noneconomic damages from lawsuits.

Such legislation would bring them in line with neighboring states like South Carolina, Tennessee and West Virginia.

Damages for noneconomic losses are damages for pain and suffering, emotional distress, and other intangible injuries. These damages involve no direct economic loss and subsequently do not have a consistent or precise value.

It’s difficult for juries to assign a dollar value to these losses, given the minimal guidance they typically receive from courts. Consequentially, these awards tend to be erratic and, because of the highly charged environment of personal injury trials, excessive.

The discretion given to juries in awarding noneconomic damages is one of the greatest contributors to the inequities and inefficiencies of the tort liability system.

A recent study by the American Medical Association shows Kentucky leads the nation in increases in medical liability plan costs, meaning each Kentucky resident pays higher health care costs. Higher medical liability insurance rates also drive doctors out-of-state, potentially leading to health care shortages, particularly in rural areas.

In addition to the stress on the medical community from ballooning costs, the lack of action on liability reform in Kentucky creates a detriment to economic development efforts.

Senator Alvarado has filed this legislation during past sessions of the General Assembly, but this will be the first time in several years the House of Representatives considers this type of legislation.

These proposals to address increasing tort costs would help reform Kentucky’s increasingly unfriendly liability climate and improve overall costs for families across the board.

A recent study shows that on average, Kentucky residents pay more than $725 every year in a “tort tax.”