Economic vs. Non-Economic Damages: What You Need To Know

Every business attorney Tulsa should know that in April, 2019, Oklahoma law changed considerably for personal injury cases.
In 2011, the Oklahoma legislature passed a series of tort reform laws designed to reduce exposure for businesses at the time of a jury trial. But you and your business attorney Tulsa can not that most of these laws have been declared unconstitutional for one reason or another.

In 2019, one of the biggest tort reform bills was declared unconstitutional. The law at issue was commonly referred to as the “non-economic damages cap”, ask your business attorney Tulsa for more details. At the initial stage of a civil trial involving personal injury, the jury is attempting to determine the amount of two types of damages: economic and non-economic. Economic damages are damages that you can easily quantify and attach a specific number. For example, if it costs $3,000 to fix someone’s car and they lost $1,800.00 in wages, then, if the jury found for the Plaintiff, they would return an amount of damages of $4,800.00 in economic damages.

Non-economic damages are different. This type of damages is where the jury is trying to award damages for things that are difficult to quantify. For example, if a person used to be a marathon runner but can no longer run because of an injury event, how much is that worth? What if a grandparent is no longer able to play with his/her grandchildren in the yard? This is where the jury is trying to come up with a number for the amount of damages for losses that are difficult to quantify. Unfortunately, all business attorney Tulsa know that there is very little guidance given to the jury and this is very much left to their broad discretion.

Up until April of 2019, the amount of non-economic damages a jury could award was capped at $350,000.00 unless certain criteria was satisfied. Here are the relevant portions of the statute:

On Oklahoma 23, 2019, the Oklahoma Supreme Court issued a sharply divided decision declaring this statute unconstitutional. The case giving rise to the Court’s review of this statute is Beason v. I.E. Miller Services, Inc. Briefly, Todd Beason worked in the oil fields and had to undergo two amputations of parts of his arm after a boom fell and hit him. The boom weighed 82,000 pounds. The jury awarded $5 million in non-economic damages to Todd and $1 million in non-economic damages to his wife. The district court judge applied 23 O.S. § 61.2 and reduced the non-economic damages to $700,000.00 ($350,000.00 each). The Beasons appealed.

The Oklahoma Supreme Court reviewed 61.2 to determine whether or not this statute was constitutional. Ultimately, a majority of the Court held that it was unconstitutional. The Court reasoned that the statute violated Article 5, Section 46 of the Oklahoma Constitution which prohibits the Legislature from passing “special laws” that treat similarly situated individuals differently. The Court reasoned that a law which treats survivors of injury causing events different from the deceased is a special law. As an aside, the Oklahoma Constitution contains a specific provision that precludes capping damages in a death case and no business attorney Tulsa can deny it.

The Beason decision marks an eight-year fight by the Plaintiffs’ bar to get the non-economic damages cap declared unconstitutional. Whether we agree or disagree with the decision, as it stands on the date this article was written, Oklahoma has no cap on non-economic damages.

It is not just business attorney Tulsa that are impacted but other states have faced similar circumstances. Missouri had a case around the same time period as Oklahoma’s decision that declared Missouri’s non-economic damages cap of $350,000.00 unconstitutional. Typically, unless the amount is extremely high, tort reform laws aimed at limiting non-economic damages do not stick around for very long.

So what does all of this mean for you and your business? Let this business attorney Tulsa tell you a few things. First, it means that previous limits of protection on non-economic damages no longer exist. If there is a bad accident and a non-employee is harmed or killed because of the acts or omissions of one of your employees while working, then there could be some serious exposure. Second, the non-economic protections that previously limited punitive damages verdicts no longer exist. In a separate article, I discuss punitive damages. In the first two categories, there is a possibility that a court award the amount of actual damages or double the amount of actual damages. That could be a very high number.

So what should you do to protect yourself? The first is to ensure that your company is operating as safely as it possibly can. If your employees drive, prevent cell phone usage while driving entirely. There are programs available where the cell phone will not work while the vehicle is on. I as a business attorney Tulsa would recommend looking into some type of program such as this. Second, if there is a company event where alcohol is involved, order an Uber or Lyft to send the person drinking home. I mention in another article about a case I once defended where someone got drunk at a company event and nearly killed two people. That case was very lengthy and costs tens of thousands of dollars in litigation fees to defend. Third, document your safety efforts. Whatever safety efforts you employ, make sure there are documents to confirm that you do as you say you do.

If you believe your company’s safety procedures are not as good as they could be, give this business attorney Tulsa a call. Remember, the initial consultation with this business attorney Tulsa is free!