Sauron, who’s your wife?
Actually, to my mind the most compelling leg of the tort reform platform is to allow defendants to recover expenses from frivolous lawsuits. IMNSHO there’s going to be more benefit of reducing legal costs for business by making it clear that if the judge and jury find that the plaintiff was indulging in spurious reasoning when the suit was brought, that there will be consequences for the plaintiff.
Of course, like the idea of capping jury awards, this also could become an abused practice, too.
Me!Me!Me! 
I’ll agree with you on possible criminal charges. Taking someone’s money for a non-existant insurance policy is theft, not business error. WRT additional damages for a pattern of abuse, we’ll have to agree to disagree. Not because companies like that don’t deserve to be punished, but because it is where the biggest abuses come from. I like the idea of a strict cap on punative damages, based on the value of compensatory damages. 10x is my choice, if I have one.
If a company has a pattern of fraud, that pattern of 10x damages will add up fast. Open it up to a jury, and you wind up with sillyness like this, where the punative damages are >100x because the company has deep pockets. I recall one other insurance company suit, where they actually paid the claim, and still got socked with insanely high punative damages, $100s of millions, IIRC.
Jodi nailed it on what the judge can or can’t do with respect to the verdict. However, if the compensatory damages were $10,000,000 then the actual damages do not seem to have any relationship to the actual damages. As such, the judge could reduce the award and probably should.
It is true that Mississippi and Alabama are notorious for their big Plaintiff vedicts. If I’m not mistaken (which I might be) some states have percentages of the punitive awards go to a state victims fund. That way, the plaintiff doesn’t get some huge windfall, but the company or individual can still be punished.
But I’ve got to vehemently disagree that juries are composed of a bunch of idiots who couldn’t get out of jury duty. It’s truly surprising how often 12 people can come up with the right verdict. I’ve seen some won and some lost, but I’ve heard of relatively few cases where the verdict was not based on the evidence and reasonable. Lay people only really hear about the outrageous verdicts–not the right ones.
Ah, nice. Sauron is one of favorite posters.
The tort reform proposals that I’ve seen tend not to limit the value of damages to compensatory damages, but only for punitive damages. I agree wholeheartedly that if you suffer an injury that is somebody elses fault, you should be compensated for that injury. Your 100th plaintiff should get just compensation for the extent of his injuries, without regard to a cap. But, as I said earlier, compensatory damage awards by juries that are so incredibilty out of line with actual damages and out of line with reality, do more harm than good. So, limiting compensatoriy damages to a specific dollar amount - Bad. Limiting compensatory damages to reality - Good.
However, punitive damages can, I think, justly and fairly be capped.
This sounds a lot like the idea I proposed near the top of the page (have the company donate most of the money to a charity of the plaintiff’s choice). A very good idea if it is in fact done! (and I see I have only come up with an idea that greater minds than mine have already thought of…)
Dani
Out of curiosity, how would you propose capping them?
It seems to me–and I certainly don’t have a legal or macroeconomic mind–that capping punitive damages makes less sense then capping compensatory damages. I think if a company does something bad, the punitive damages should be big enough to make it hurt–especially given the HORRIBLE track record of the DoJ and OSHA in going after companies that repeatedly break the rules (there was a great series in the LA Times on this a month or two ago). It seems like the only way to garauntee that a cap would be punitive enough to have a deterent effect is to scale them based on the economic stature of the entity being sued…
Exactly what did the company or the agent do that was fraud? Did they keep sending her statments that she was still green? If not, then is the company even liable? If someone sends me money for no apparent reason, I am not responsible for it, right?
smiling bandit, to answer your question:
The life-insurance industry is very, very leery of situations like this, for good reason: There have been a number of unscrupulous agents (and, in some cases, companies) who have bilked customers out of millions and millions of dollars.
I dunno whether the actual charge in this case would be “fraud,” but it’s certain that the woman was under the impression she had a binding contract with the company, was paying for that contract to remain in force, and yet had no actual coverage.
I used to attempt to sell life insurance with MetLife (I was a miserable failure at that), and we had it drilled into our heads over and over that we were duly licensed and authorized representatives of the company; what we did affected the company as a whole. Life insurance agents actually have a serious amount of power – if they sign a policy application and accept payment, the company is bound to honor that policy, even if the potential insured had five minutes to live and no actuary in the world would have approved the policy.
There are dozens of schemes that unscrupulous agents can use to increase their commissions without actually helping their clients. The scenario mentioned in the OP is one of the more blatant ones, though – one has to wonder how either the agent or the company (or both) thought they would get away with this in the long run.
What really cracks me up is that the next time the jury members get an insurance policy invoice, and the premium is significantly higher than last year, they will not understand the relationship between the 1 BILLION dollar verdict and an increase in what they pay in premiums.
There was an article in the USA Today paid for by State of Washington neurosurgeons complaining that competent doctors are leaving the state because they cannot afford malpractice insurance any longer due to the rising number of ridiculous verdicts. They urged citizens to support Tort Reform. My husband has a client, a gynecologist in Florida, who dropped his malpractice insurance altogether because he could not afford it. He said that if he gets sued, he may have to just close his practice. (In Florida, they cannot go after your home.) The people in the state of Alabama are notorious for their ridiculous verdicts. In the end, we will all pay for it with higher premiums, but those who live in the states where the verdicts are insane will pay for it more dearly. The doctors will leave. The insurance companies will quit writing policies. The only people left will be the lawyers.
But back to the little old lady. Someone ripped her off. She deserves to get her money back, along with an apology. The people who defrauded her should be horsewhipped and made to stand in the town square with a sign on their backs that read “I attack little old ladies.”
Me like Sauron too! He smash good!
Capping punitive damages is fairly common; however in the states I am familiar with (Oklahoma and Texas) the “cap” can be removed in certain situations i.e., where the conduct is more willful and egregious.
Tort reform has also recently been passed in Texas regarding caps on non-economic damages (mental anguish and pain and suffering) but not on straight economic damages. At this point, this cap is only on medical malpractice cases, but there is now a state constitutional amendment in place allowing the possibilty to put this cap on all personal injury cases. Even as a defense attorney I am against the cap on non-economic damages. Juries usually come up with fair numbers anyway and what about that case where the damages are mostly noneconmic damages–we’re capping them without any heed to the actual case.
For instance, there was an icident in Texas right before tort reform passed for med mal. A doctor removed a patient’s penis during a surgery to remove a tumor from the man’s bladder. There was no consent for the doctor to remove the penis, the doctor could have waited and gotten consent or additional testing but decided not to do so. Turns out there was no cancer on the penis. So, this guy probably has about $100,000 in non-economic damages, but he is very limited in what he can get for his pain and suffering and mental anguish and that’s where all of his damages are.
It is a sad, sad day for the SDMB when at least three separate attorneys have weighed in on this issue without mentioning State Farm Mutual Automobile Insurance Co. v. Campbell (April 7, 2003). Yes, Virginia, there are constitutional limits to punitive damages awards.
Shit, MINTY, what crawled up your ass and died? It’s a sad, sad day for the SDMB when the fourth attorney can’t add something pertinent and informative to a discussion without slagging off the others, none of whom ever said anything about the constitutionality of punitive damages either way.
That’s a great citation, BTW – pertinent and informative about the whole issue. Too bad you had to be so damn superior in posting it.
Calm down, Jodi. I was surprised none of you had mentioned it, but I wasn’t slagging you for it.
For better or for worse, this is pretty much as calm as I get. Respectfully, if your intent is to express surprise, maybe you should try “Gee, I’m surprised no one has mentioned . . .” as opposed to “It’s a sad, sad day . . . .” Just a thought.
Well it is rather like taking a Civ Pro exam without mentioning Erie, but that doesn’t make you a bad person.