COMPEN-DAMAGES.13TORTS OUTLINE -- FALL -- HUBBARDTOPIC: COMPENSATORY DAMAGESI. IntroductionA. Types of damages -- summary (See below for more details)1. Actuala. Pecuniary/tangible/economicb. Non-pecuniary/intangible/noneconomic (pain and suffering, mentaldistress)2. Punitive3. NominalB. Goals and Effects - Damages do two things at once: (1) “harm” defendant by making him pay; and (2) benefit plaintiff by compensating1. How do these effects relate to the goals of tort law? Consider: a. Deterrence – internalize costs to wrongdoerb. Corrective justice – wrongdoer must restore victim to status quo antec. Spreading (See II-B-3-a below) 2. Is compensation a goal of tort law or a method of achieving goals in 1 above? C. Size of awards 1. Pattern of increased size of verdicts and reasons for pattern (See n. 12. p. 727) a. Inflation (See footnote *, p. 711)b. “Real” increase in standard of living Page 1 of 12c. Concern for increased protection of “interests” d. Better skills by plaintiffs’ attorneys [?] 2. Role of review of jury award by trial judge and by appellate judges. See Seffert (p. 711)a. Standard of review(1) trial judge review of jury verdict (See b below)(2) appellate judge review of trial judge B abuse of discretion. Thus, for example, reversal of denial of defendant’s motion for new trial if appellate court determines that amount so high that it “shocks the conscience.” b. Posttrial motions based on verdict being excessibly large or small(1) New trial. Standards for granting: (a) so grossly excessive/inadequate that it necessarily implies that the verdict must have been the result of “passion and prejudice”; verdict “shocks the conscience” (p. 714)(b) excessive (unsupported by evidence or based on error by jury) – thirteenth juror doctrine (See p. 714)(2) remittitur B merely excessive (See p. 714; nn. 6–7, pp. 724–725) (3) additur B merely inadequate (See n. 7, p. 724)c. New trial on damages alone or on liability and damages B rules and application vary3. “Tort reform” measures to address size of damages awards. What reasons might support the cap? (See II-B-4-d below)a. Caps (partial immunity) (pp. 726–728)(1) cap on total award (for all or only some types of tort claims) (n. 13, p. 727) Page 2 of 12(2) cap on intangible award (“noneconomic damages”) (for all or only some types of tort claims) (n. 11, p. 726) (See II-B-4 below)(3) punitive award(a) cap(b) government shareb. Some other proposals (n. 14, p. 726)(1) Limits on contingency fees. Though limits are often defended as “fair” to successful plaintiffs, they also help defendants (and hurt the injured victims) because limits reduce plaintiff=s attorney=s incentives to take cases with lower probability of success but higher potential damages.(2) Early Offers(a) generally: “offer of judgment”(b) contingency feeD. Lump sum approach (“single judgment”)1. Strengths (See pp. 710–711)a. Lower administrative costs b. Incentive to Aget better@2. Shortcomings -- uncertainty as to futureE. Expert witnesses play a crucial role in many damages determinations, particularly as to: 1. earning ability2. future expenses3. discount4. enjoyment of lifePage 3 of 12II. Elements of Actual Damages (Basic Measure B status quo ante (p. 710)) A. Tangible1. Income2. Consequential -- lost profits3. Property - repair, rent, replacement4. Medical care5. Servicesa. Needed as a result of injuryb. Lost as a result of the injuryB. Intangible (See IV below)1. Pain and suffering (physical aspect involved)2. Mental distress (psychological) B componentsa. Victim B examples: (1) Fear before injury(2) Anguish/loss afterwards: disfigurement, “hedonic” damages, loss of enjoyment, etc.b. Persons with relationship to victim(1) Consortium B relative lives(2) GriefBrelative dies (wrongful death claim) (3) Third party bystander claim B direct victim dies or suffers serious bodily injury. 3. Arguments for and against (Seffert dissent at pp. 716–717; n. 5, p. 722) (See I-B above) Page 4 of 12a. Note that these arguments often emphasize use of strict liability spreading schemes. Are the arguments valid if spreading is not the goal?(1) Jaffe article stresses that payment from a “pooled insurance Fund” would substantially dilute the deterrent impact. (2) Traynor (dissenting judge in Seffert) is a proponent of“spreading” accident costs through strict liability schemes(note language on p. 716 – “distribution of losses”)b. Consider also the argument that intangibles pay the attorney’s fee so that the plaintiff is made whole in terms of economic damage4. Amount of damages: Proposals for “reform” (see I-C-3 above) (nn. 10–14,pp. 724–728). Caps on intangibles have been adopted in many states, but these vary widely. They have also been criticized as unfair because of unequal impact in terms of race and gender. (See n. 2 at p. 79) Some of the variables involved in differences among jurisdictions:a. amount of capb. nature of claim - e.g., medical malpractice onlyc. exceptions or higher cap for certain claims or injuries - e.g., wrongful death, severe brain injuryd. reasons for reform - e.g.,(1) speculative nature of amount(2) solve a “crisis” in liability(3) economic development5. Should types of psychic harm (pain and suffering, mental distress, loss of enjoyment) be combined or treated separately? (see IV-C-4 below)C. Costs of bringing suit -- e.g., attorney’s fees -- not included unless, for example, a statute authorizes recovery of such costs. Remember, these costs are different from an “award of costs.” The “costs” in this award are narrower and include, forexample, filing fees. D. Collateral Source Rule (See VI below)Page 5 of 12III. Computing Tangible Damages (See Seffert at p. 713; nn. 1-3 pp. 718–721)A. Past tangible loss1. Actual expenditure on repair, replacement, medical care, etc. -- a matter ofreceipts. a. However, in applying collateral source rule, valuation in “write-off” situations can be complicated. See n.5, p.748.2. Estimated value of lost earnings/profits before trial. (See B below.) a. Expert witness can be helpful, for example, in terms of earnings or profits.b. Will measure be pre or post tax earnings? (See Part V below.)3. Prejudgment interest – generally not recoverable (Note that postjudgment interest will be recoverable; rates of interest vary among jurisdictions.)B. Future tangible loss1. Discount. All