Maryland’s ‘Lawsuit Inferno’ Lawmakers Aim to Repeal Damage Limits, Increasing Costs for Residents

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Marylanders’ Annual $1,731 ‘Tort Tax’ May Increase with Proposed Changes in Annapolis

Yesterday, the American Tort Reform Association testified against House Bill 113 in the Maryland House Judiciary Committee. This bill seeks to remove the state’s limit on the amount recoverable in non-economic damages, or “pain and suffering” awards, in civil lawsuits.

“If lawmakers approve this bill, Maryland businesses and consumers will see their costs increase and access to justice decrease,” ATRA’s president Tiger Joyce said.

Such limits are common in other states and generally are viewed as good public policy due to the subjective and unquantifiable nature of pain and suffering. Placing reasonable limits on these types of damages balances the need for injury recovery while avoiding excessive awards and providing some level of predictability within the civil justice system.

Maryland’s limit on non-economic damages is currently set at $950,000 and increases by $15,000 annually. In civil litigation, plaintiffs’ attorneys typically take 30% to 40% of awards.

Last year, when lawmakers attempted to raise the limit, Pinnacle Actuarial Resources, Inc., an independent actuarial firm, estimated that raising the limit would have increased

personal auto liability premiums by as much as 19% and commercial auto liability premiums by as much as 30%.

The Maryland Senate was named a “Lawsuit Inferno” in ATRA’s inaugural “Legislative HeatCheck” report due in part to last year’s attempt to increase the limit on non-economic damages by 87%. However, lawmakers successfully expanded liability for recreational facilities, cementing its Lawsuit Inferno status.

“Removing or increasing these award limits on non-economic damages will likely attract more litigation and trial lawyers eager to take advantage of the potentially limitless recovery, making Maryland even more of a Lawsuit Inferno,” Joyce said.

Estimates further show that Marylanders’ personal auto liability costs could increase by $189 per year absent the current statutory limit. Maryland residents already pay one of the highest “tort taxes” in the nation every year, at more than $1,731 per resident due to excessive litigation costs. These costs further result in a loss of nearly 92,000 jobs per year.

House Bill 113 is a partisan bill sponsored by Democratic Delegates Ziegler, Boyce, Charkoudian, Foley, Kaufman, Ruff, Terrasa, and Wu that will increase costs for all Maryland residents. It is a companion bill to Senate Bill 584 sponsored by Democratic Sens. Waldstreicher and Smith. Every sponsor on each of these bills also sponsored the same legislation that was rejected by their colleagues in the House last year.

ATRA’s full testimony on H.B. 113 is available here. ATRA additionally testified against the Senate version, S.B. 584, in the Senate Judicial Proceedings Committee last week.

ATRA will also testify against another problematic bill on March 5, House Bill 1099, which would make civil litigation in Maryland more complicated and subjective. H.B. 1099 would also create a new “surcharge” that defendants would be forced to pay on any punitive damage amount.

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