Kansas Cap on Non-economic Damages in Personal Injury Cases is Unconstitutional: Businesses Should Urge Insurers to Re-evaluate Relevant Pending Matters

By and | June 19, 2019

On Friday, June 14, 2019, the Kansas Supreme Court ruled that the statutory cap on non-economic damages in personal injury actions (e.g., for pain and suffering) violates the Kansas Constitution. See Hilburn v. Enerpipe LTD., __ P. 3d __, 2019 WL 2479464 (Kan. June 14, 2019). Specifically, the court held that K.S.A. § 60-19a02(b), which currently imposes caps of $250,000 or $325,000 depending on the year,  infringes on the inviolate right to a jury trial provided by section 5 of the Kansas Constitution Bill of Rights.

Hilburn wasn’t an insurance case. It was an auto accident case, involving complicated issues of Kansas constitutional law. But Hilburn is important from a business insurance perspective. As a result of Hilburn, businesses with personal injury exposures in Kansas (e.g., product liability, medical malpractice, automobile, and premises liability)  suddenly may face liability for higher damage awards, even in existing matters. Businesses must take steps to ensure liability insurance protection is effective against these potentially higher damage awards.

While we doubt that many businesses have attached significance to the K.S.A. § 60-19a02(b) damage caps in making insurance limits purchasing decisions, businesses may consider the elimination of these caps as one factor among many in making limits purchasing decisions. More immediately, Hilburn could have a meaningful impact on businesses with pending personal injury matters. Liability insurers may have evaluated damages in these matters based on the  damage caps. Now those evaluations may not be reliable. And insurer decisions to reject settlement demands or not to pursue settlement discussions may be invalid. In some cases, insurers that fail to re-evaluate and revisit settlement strategies based on Hilburn may breach legal duties to their insureds and subject those insureds to liability in excess of insurance policy limits.

In appropriate cases, businesses facing potential liability for non-economic damages in pending Kansas personal injury matters should urge their insurers to re-evaluate damages and revisit settlement strategies. Businesses should ask those insurers to disclose their case evaluations. Businesses that suspect their insurers have not taken appropriate action in response to Hilburn should consider asking experienced insurance coverage counsel for help.

Scott HechtChristina Arnone

Contact Scott Hecht or Christina Arnone for more information.