Bill Passed to Raise Damages Limit in Tort Actions

Damages Cap Increase | Colorado House Bill 24-1472

Colorado has had a series of legislative measures addressing damages caps; these caps limited the noneconomic damages a person could receive in a personal injury claim as well as the wrongful death damages and medical malpractice damages.

Previous caps were often criticized for being outdated and insufficient in covering the true costs incurred by plaintiffs, especially in cases involving severe injuries or long-term disabilities. House Bill 24-1472 seeks to rectify these issues by introducing more realistic and justifiable limits.

Key Provisions of House Bill 24-1472

House Bill 24-1472 introduces several critical changes to the existing damages cap limits in Colorado. One of the most notable provisions is the increase in the cap for noneconomic damages, such as pain and suffering, emotional distress, and loss of enjoyment of life.

These types of damages are often subjective and difficult to quantify, but the new bill aims to provide a more generous cap that better reflects the true impact of these injuries on plaintiffs' lives. The new limits are as follows:

Noneconomic damages will now be capped at $1.5 million. Previously, noneconomic losses had a cap of $729,790 (and $1,45,600 in cases where the plaintiff convinced the court with “clear and convincing evidence” to increase the maximum).
Noneconomic damages in wrongful death suits will now be capped at $2.125 million. Previously, the cap was $679,990. It is also important to note that the court will not impose a limit on damages in cases where the wrongful act that led to a death was considered a felony murder.
Noneconomic damages in medical malpractice wrongful death suits will now be capped at $1.575 million. This cap will remain the same for the next five years, and thereafter, the cap will be adjusted every two years based on inflation.
Noneconomic damages in medical malpractice suits will now be capped at $875,000. This damages limit will also be subject to inflation-based adjustment after five years.

The new caps will be applicable for lawsuits filed on (or after) January 1^st, 2025. It is also important to note that the new law requires that the damages cap be increased more routinely. Before House Bill 24-1472, the damages caps were last increased in January 2020, and prior to that, they were last adjusted in 2008.

Under this new bill, legislators are required to adjust the damages caps based on inflation every two years, starting in January 2028. The bill also does the following:

Eliminates the ability of plaintiffs to ask for the cap to be doubled upon “clear and convincing evidence.”
No longer links the caps to the date the claim arose (i.e., the date of the incident or loss) but simply allows new caps to be imposed on any claim filed on or after January 1, 2025.

Implications for Plaintiffs & Defendants

For plaintiffs, the higher cap means the potential for greater compensation, which can significantly impact their ability to recover and rebuild their lives after an injury. This change is particularly beneficial for those who have suffered severe injuries that result in long-term or permanent disabilities, as the previous caps may have been insufficient to cover their extensive medical and rehabilitative needs. The increased cap also empowers plaintiffs to pursue their cases more vigorously, knowing that the potential compensation is more likely to cover their actual losses.

Many people also estimate that plaintiffs will wait to file their suit until the enactment of this bill (January 2025), resulting in fewer new suits being filed at the end of this year. Unless a plaintiff has a looming statute of limitations deadline, they can take advantage of the new limits.

For defendants, including businesses and individuals, the new cap necessitates a reevaluation of litigation strategies. Defense attorneys will need to consider the increased financial exposure and may adopt more aggressive settlement strategies to mitigate the risk of higher jury awards. This shift could lead to a greater emphasis on pre-trial negotiations and alternative dispute resolution methods, such as mediation and arbitration.

Effect on Insurance Companies

Insurance companies are likely to experience significant impacts due to the increased damages cap introduced by House Bill 24-1472. One of the immediate effects is the potential rise in insurance premiums as insurers adjust their pricing models to account for the higher risk of larger payouts.

Policy terms and conditions may also undergo revisions, with insurers seeking to limit their exposure to high-value claims. This could include the introduction of new exclusions or limitations on coverage, which policyholders will need to carefully review and understand.

The increased cap also affects the risk assessment and underwriting processes within insurance companies. Underwriters will need to incorporate the higher potential payouts into their calculations, which could lead to more stringent criteria for issuing policies.

Get Help with Your Personal Injury Claim

If you or someone you know is involved in a personal injury case, the Law Office of Joseph A. Lazzara, P.C. is here to help. Our experienced attorney is dedicated to quality and reliable counsel, and should you retain our services, you can trust us to help you calculate your damages and understand the laws governing your case.

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Schedule an initial consultation with our team today by calling (720) 809-8262.