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| Burns, Cunningham & Mackey, P.C.

The problem with caps – artificial ceilings on the amount that a wrong doer will have to pay regardless of the damage caused – is that caps trade justice for predictability while dealing with unpredictable events.

Those of us on the Gulf Coast saw billions of dollars in damages from the recent BP gusher in the Gulf. The OPA $75 million cap on oil spill damages, if enforceable, would pass billions of dollars in damages from BP to innocent parties damaged by the pollution. Fortunately, the facts of the BP disaster will support gross negligence so the cap, in that case, will be inapplicable.

However, sometimes caps do apply and the consequences can be devastating. For instance, the Amtrak Reform and Accountability Act of 1997 limits the damages train crash victims can receive to a total of $200 million. That sounds like a lot of money until we consider that one train wreck can kill and injury many people. On September 12, 2008 a texting engineer on a French train in California ran a red light killing 25 people and injuring over 100 others. The company is relying upon the Act to limit its liability to $200 million even though, according to the victims, that will not even pay all of their medical bills. If the Act is enforced many victims will face bankruptcy.

Do we really want laws that force the injured parties to pay their own medical bills? Clearly that is not just compensation especially for the seriously injured party who in addition to her disabilities must deal with the loss of a bread winner in the same catastrophe.

Congress needs to recognize that any cap on civil damages is a bad idea. We cannot predict the cost of constructing a building until we have the relevant facts. Similarly, we cannot tell how much it will cost to compensate disaster victims until we see the scope of the disaster. Limiting damages – regardless of the harm caused – is a failed experiment.

One Comment

  1. Gravatar for Gerry McGill
    Gerry McGill

    Pete, it's ironic that you write about the Amtrack Reform and Accountability Act of 1997 and its $200 million cap on damages on the seventeenth anniversary of the wreck of the Amtrack Sunset Limited which occurred just outside of Mobile on the way to Pensacola, Florida.

    In the early morning hours of September 23, 1993 the Sunset Limited was on the last leg of its cross country trip when it slammed into a steel railroad bridge which had been displaced approximately 3 feet by the tug Mauvilla and its barges alliding with it. (An allision is where a vessel strikes a fixed object rather than a collision between two vessesl.)

    Forty seven persons were killed. Their ages ranged from two months to 78 years old. The cases were eventually settled but many victims and their families received nothing. The reason is that the General Maritime Law only allows recovery in death cases for pecuniary damages which means damages for loss of income. Since many of the victims were either children who did not have jobs or older people who were retired there was no loss of income.

    Finally, I note that the Amtrack "Reform and Accountability" Act and its damage cap was enacted four years later. I'm sure that's just a coincidence.

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