In the upcoming Session of the Maryland General Assembly, lawmakers are considering eliminating the cap on non-economic damages—compensation for pain, inconvenience, and other hard-to-quantify losses awarded in lawsuits. Advocates warn this change could raise insurance premiums, increase legal costs, and create unfair burdens for businesses and consumers. If these concerns become reality, the proposal could harm Maryland’s economy and residents. The Maryland Alliance for Fair Liability Laws sat down with Grason Wiggins of the Maryland Chamber of Commerce to discuss the issue in greater detail.
Q. Let’s start by explaining what non-economic damages are.
Grason Wiggins: In Maryland, non-economic damages are payments awarded for injuries that cannot be quantified, like pain and inconvenience. These are different from economic damages, which can be quantified and documented, like a medical bill or lost wages.
In Maryland, there is no cap on economic damages - they’re fully recoverable. However, non-economic damages are capped because pain and inconvenience are difficult to quantify, and a reasonable cap is the best way to avoid excessive trial verdicts and misuse of the legal system. Currently, Maryland allows up to $950,000 for non-economic damages, and that amount increases annually under Maryland law.
Q: What’s the impact of eliminating caps on non-economic damages?
GW: Eliminating the cap could trigger a domino effect. Businesses facing higher liability and legal costs might need to offset those costs by increasing the price of goods and services for consumers. Insurance premiums—home, health, and business—could also rise, and those financial pressures would be exceptionally burdensome for both businesses and consumers.
Eliminating the current cap doesn’t just affect one type of business—it can ripple through the entire economy. Maryland has broad tort laws – which cover liability claims – so eliminating the non-economic damages cap would have widespread implications across many industries. The resulting liability expansion would create financial pressures that negatively impact businesses and consumers alike, making the state less competitive and increasing costs for everyone.
Q: Let’s get more specific. What are some examples of what you’re talking about?
GW: Personal injury cases include many types of lawsuits, from dog bites to product and premises liability. For example, when someone slips in an apartment building or gets injured because of another resident’s actions, the apartment building can be sued. Right now, there are limits to how much money someone can get for their pain and inconvenience, but eliminating those limits may cause the cost of housing to increase to offset the additional liability. Maryland is currently experiencing a significant affordable housing shortage, and the state simply cannot afford to risk increasing housing prices through expanded liability.
We have a shortage of affordable housing in Maryland, and the last thing we need is to introduce higher costs that could ripple across construction, renting, homeownership, and other sectors, ultimately increasing liability, costs for consumers, and operating expenses for businesses statewide.
Homeowners could be affected as well. Imagine someone getting hurt while your house is being built, or a guest getting injured while visiting your home. Maryland law says you could be responsible for these accidents. This means if someone slips on your icy walkway or gets injured in your backyard, you might be facing a lawsuit. As a result, eliminating the cap on noneconomic damages would expose every homeowner in Maryland to increased liability.
Keep in mind, for all these examples, there is a limitless ability to recover for economic damages like lost wages or medical costs. Removing the cap for non-economic damages would unnecessarily increase liability for subjective damages like inconvenience, take more money out of Marylanders’ pockets, and put more money into the pockets of attorneys.
Q: You also think eliminating caps may impair hiring, correct?
GW: That’s right. My concern is that eliminating the cap could discourage businesses from hiring individuals with less-than-perfect work histories, like returning citizens rebuilding their lives after incarceration.
Under Maryland’s negligent hiring statute, an employer can be sued if an employee commits a tort and it is determined that the employer should have known that the employee had a propensity for such behavior. Removing the cap would expand an employer’s liability in those cases, and as a result, the businesses may be less willing to provide valuable job opportunities to people who need them.
Maryland already has one of the slowest job growth rates in the country. Adding more liability costs would make it harder for businesses to take hiring risks, further limiting opportunities for workers and compounding the state’s workforce challenges. It’s worth noting that some of the same organizations that are advocating for removal of the cap on non-economic damages have also opposed repealing the negligent hiring statute in prior years. Those organizations are working hard to make sure Maryland businesses continue to be subjected to liability for negligent hiring while seeking to increase the amount of that liability.
Q: Can you speak more to how this might impact the legal environment for businesses?
GW: Expanded liability can pressure people and businesses into settling lawsuits, even if they don’t believe they’re at fault. This creates an environment where fear of litigation outweighs justice, pushing consumers and businesses to pay large sums for subjective claims involving inconvenience.
Maryland’s tort system is so broad that the full impact is difficult to predict, but one thing is clear: eliminating the cap on non-economic damages would have a chilling effect on Maryland’s residents and businesses who are operating in good faith. That’s not justice – it’s open season on Maryland’s small businesses and job creators.
Maryland is already one of the most expensive states, and eliminating the caps on non-economic damages would significantly increase potential liability for every Marylander. The result could be higher costs for goods and services, fewer opportunities for Maryland workers, and increased expenses for every Marylander.
To learn more about this issue or get involved, you can visit the Maryland Alliance for Fair Liability Laws at https://www.fairliabilitymaryland.com.