A Proposal
By John Merriam
I have a problem with putting a price on emotional distress and pain and suffering even though I’ve represented injured plaintiffs for my entire career. By contrast, I am very comfortable putting a price on bad behavior in the form of punitive damages, when punitive damages are available. This article suggests that the State of Washington exchange the two by eliminating general damages and allowing punitive damages.
“Pain and suffering damages can account to up to half of the total tort damages paid in product liability and medical malpractice cases.” Ronen Avraham, Should Pain and Suffering Damages be Abolished from Tort Law?, 55 Univ. of Toronto L. J. 941 (2005). But “giving victims money does not free them from pain.” Richard Abel, General Damages are Incoherent, Incalculable, Incommensurable and Inegalitarian (but Otherwise a Great Idea), 55 DePaul L. Rev. 253, 259 (2006). “The relationship between general damages and the overarching goal of tort law (compensation, deterrence and corrective justice) is tenuous.” Joseph Sanders, Reforming General Damages: A Good Tort Reform, 13 Roger Williams University L. Rev. 115, 142 (2008). Instead of relieving physical pain and emotional distress, one commentator has called awarding general damages “slot-machine justice”. Abel, supra, 55 DePaul L. Rev. at 296.
There have been efforts to make awards of general damages less like buying lottery tickets by adopting ratios – pegging general damages to special damages, and other formulas. See, e.g., Ronen Avraham, Putting a Price on Pain-and-Suffering Damages: A Critique of Current Approaches and a Preliminary Proposal for Change, 100 NW U. L. Rev. 87 (2006); Yun-Chang, Theodore Eisenberg, Tsung Li & Martin T. Wells, Pain and Suffering Damages in Personal Injury Cases: An Empirical Study, Coase-Sandor Working Paper Series in Law and Economics, No.749 (2016) (study of general damage awards in Taiwan where there is no jury system). None of these suggested formulas solve the basic problem: that of using money to try to relieve pain and distress. General damage awards may, in fact do more harm than good.
Pain and suffering damages in tort law cause the expected marginal cost of manufacturing products to increase by the amount of the actuarial cost of providing such insurance. These costs, however, may be passed back to consumers through higher product prices. Thus, consumers are essentially purchasing pain-and-suffering coverage in the form of higher product prices. . . . Is providing pain-and-suffering damages efficient?
Avraham, supra, 55 Univ. of Toronto L.J. at 944-945. What goal does an award of general damages achieve?
Any normative theory of damages must also attend to victim concern with prevention, acknowledgement of responsibility, and recognition of the wrong. General damages are at best an indirect means toward these ends and at worst irrelevant, distracting and inconsistent.
Abel, supra, 55 DePaul L. Rev. at 266.
No other legal system “needs” American-style general damages. Like many features of our law (as Holmes declared), general damages are the product of experience, not logic. Maybe it is time to jettison this bit of American exceptionalism.
Abel, Id., 55 DePaul L. Rev. at 326.
Washington state is one of only five U.S. jurisdictions that prohibit punitive damages. Punitive damages are available under the federal maritime law in some types of cases. In my own practice, there has been a noticeable improvement in behavior by vessel owners since 2009, when punitive damages became available to seamen wrongfully denied maintenance and cure benefits. In Atlantic Sounding v. Townsend, 557 U.S. 404 (2009), my new-best-friend Clarence Thomas joined the four liberals on the Supreme Court to allow punitive damages on maintenance and cure claims. He reasoned that such damages should be available to injured seamen now because they were probably available in 1787, even though there were no cases back then that were on point. See also, Clausen v. Icicle Seafoods, 174 Wn.2d 70 (2012) (same).
Let’s face reality: Punitive damages are already awarded, de facto, in the state courts of Washington in the form of heightened general damages, when egregious behavior is involved. How many readers of this publication have asked a jury to “send a message” to the defendant in the form of a large award of general damages? The ‘message’ has nothing to do with the damages suffered by the plaintiff, and everything to do with changing the defendant’s bad behavior. In many cases, large awards of general damages are nothing more than punitive damages in sheep’s clothing. Why not end the hypocrisy and call these enhanced damage awards what they really are?
I have bounced this proposal off colleagues on both sides of the personal injury bar. A common reaction is that insurance premiums would skyrocket. However, if punitive damages were substituted for general damages in Washington, I suggest that insurance premiums would fall rather than rise. First, punitive damages require a high level of culpability and awards are the exception rather than the rule. In the run-of-the-mill motor vehicle accident – a negligent failure to yield, for example – only special damages would be awarded, not punitive damages and, under this proposal, no general damages either.
Some defenders of general damages say that it provides a pool of money from which lawyers can take their fees. Sanders, supra, 13 Roger Williams Univ. L. Rev. at 142. This raises the question of whether general damages serve the best interest of injured victims, or the best interest of their lawyers. Under the proposal here, lawyers would still get paid. First, where punitive damages are recovered, there would be a pool of money from which lawyers could take contingent fees. For other cases, involving only special damages, there are other solutions. Special damages are usually straightforward and easy to calculate. Specials-only cases should settle quickly without the need for litigation. Where litigation over special damages is required, attorney fees could be recovered by removing the $10,000 lid on statutory offers of settlement. R.C.W. 4.84.250 et seq. See also, R.C.W. 7.06.050 (offers of compromise following arbitration awards).
Special damages consist primarily of medical bills, wage loss and property damage (in some cases). Property damage in motor vehicle accidents is usually settled between insurance carriers and is rarely the subject of litigation. Medical bills could be taken out of the equation by Medicare for all. (Universal, one-payor, healthcare is beyond the scope of this article.) That leaves only income loss, past and future, to calculate.
New Zealand eliminated awards of general damages in 1974, but it still allows punitive damages. Allan Beever, The Future of Exemplary Damages in New Zealand, 24 New Zealand University L. Rev. 197 (2010). All civil liability, except punitive damages, was abolished when the state provided compensation for all injury victims regardless of fault. Perhaps the U.S. has something to learn from New Zealand . . . ?
Eagle John Merriam is a former merchant seaman, now a sole practitioner at Fishermen’s Terminal in Seattle, who limits his practice to representing claimants for maritime wages and injury. Research assistance for this article was provided by APR 6 law clerk Daniel Brown.