What are non-economic damages?

Non-economic damages are injuries that cannot be quantified and are commonly referred to as “pain and suffering.” These are different from economic damages, which can be quantified and documented with information like a medical bill or lost wages.  

There is no cap on economic damages in Maryland, so those objective damages would be unlimited and fully recoverable.

How did we get here?

A non-economic damage cap was first enacted in Maryland in 1986 and set at $350,000. This cap has been adjusted over the years and increases automatically at a rate of $15,000 per year. It is currently set at $950,000 and automatically increases next year.  

Why did Maryland cap non-economic damages?

Maryland chose to cap non-economic damages because pain and suffering are difficult to quantify, and putting a reasonable cap on damages is the best public policy to balance a need for injury recovery with avoiding excessive trial verdicts and legal gamesmanship.  

How does Maryland’s approach compare to other states?

Many states have caps on non-economic damages, and Maryland’s cap is already one of the highest in the nation.  

Who would be harmed by removing the cap on non-economic damages?

When some legislators tried to remove Maryland’s cap on non-economic damages in 2024, an analysis conducted by an independent actuarial firm found that it could have increased personal auto liability by as much as 19%, and commercial auto liability by as much as 30%. These increases would create serious cost burdens for residents and businesses alike.   

How would removing the cap on non-economic damages impact our legal system?

Frivolous lawsuits already strain our system and increase legal costs like defense, settlement, and claims administration. Removing the caps could contribute to increased legal system abuse and attract more attorneys who encourage their clients to hold out for jackpot verdicts. Many clients do not know that the lawyers in these cases often receive a significant portion of the financial reward.  

Will removing the cap on non-economic damages open the door to legal manipulation?

In recent years, investors have begun to seed fund lawsuits seeking lucrative verdicts, targeting legal environments where jackpot verdicts are more likely. The increased verdicts lead to increased legal fees that provide the funders a high return on investment, further decreasing the injured parties recovery. 

This return on investment for funders comes at the expense of the rest of us and the legal system! We can’t afford to be faced with an increased cost of doing business in Maryland or a further burdening of an already burdened legal system as costly lawsuits and legal maneuvering exhaust limited judicial resources.