Colorado Gov. Says No on Increase to Cap Non-Economic Damages

Colorado Gov. Bill Owens has vetoed legislation (SB 25) that would have put in place automatic inflation adjustments for the cap on non-economic damages.

“The Property Casualty Insurers Association of America (PCI) urged Gov. Owens to veto the bill which would have increased the cap on non-economic damages from $366,000 to $440,000 next year and allowed for additional increases on an annual basis,” said Michael Harrold, assistant vice president and regional manager for PCI. “The cap on non-economic damage has been very effective at keeping Colorado’s tort reform system in balance. The current system provides protection for injured individuals without the excessive damage awards experienced by other states.”

In his veto letter to the Senate, Gov. Owens expressed opposition to the linkage of non-economic damages to inflation as a way to mitigate any perceived reduction in value of the award over time.

“While these inflationary adjustments may seem benign, they are actually unwarranted and harmful,” said Owens. “Colorado’s cap on general non-economic damages is the centerpiece of our current civil justice system, which helps limit increases in Colorado’s litigation and insurance costs. The award of non-economic damages is designed to be a supplemental form of compassionate compensation that is not related to economic damages.”