Illinois legislators moved legislation this week to allow punitive damages in wrongful death lawsuits, a bill opposed by the insurance industry.
The Illinois House of Representatives passed the bill Tuesday by a 70-40 margin. It heads to the state Senate and Gov. J.B. Pritzker, D, is reportedly supportive. Like the House, the Illinois Senate is also under Democratic Party control.
For years, Illinois law has “consistently held that, absent specific statutory authority or very strong equitable reasons, punitive damages are not permitted in Illinois in an action under the Survival Act or as part of a common law action for wrongful death,” a judge wrote in a 2009 lawsuit against Walgreens.
Only those injured by corporate wrongdoing can recover punitive damages.
“Right now, you have less liability if your actions lead to the death of someone instead of injuring them,” state Rep. La Shawn Ford, D-Chicago, told Corporate Crime Reporter website.
The American Property Casualty Insurance Association opposes the bill, claiming it will add costs for everyone involved.
“This legislation would likely increase claims, litigation, jury verdicts, and settlements costs,” the APCIA said in a statement. “It would have a detrimental impact on Illinois civil defendants, consumers, businesses, health care providers, and insurers.”
There are no caps on the wrongful death punitive damages amount in Illinois. Most other states that allow punitive damages have the caps on amounts, the APCIA pointed out.
“Passage of the bill would reverse current law which prohibits insurers from paying punitive damages and would make Illinois an extreme outlier state in terms of allowable damages for wrongful death cases,” the statement said.
The law includes some exemptions, including actions against the state or a unit of local government.
Insurance industry concerns
Compensatory damages are meant to compensate the injured party for the injury sustained, and nothing more. For example, if a defendant runs into a pedestrian plaintiff causing $500 in
medical bills and $500 in lost wages, the compensatory (or actual) damages would be $1,000.
Punitive damages, however, “are intended to punish the defendant for its outrageous, wanton, or willful conduct and to deter the defendant from engaging in similar behavior in the future,” Chubb noted in a review of U.S. punitive damages.
Punitive damage awards can end up far exceeding compensatory damages, awards that the insurance industry can end up responsible for depending on the defendant’s coverage.
In Bullock v. Phillip Morris USA, the plaintiff, a 64-year-old woman with inoperable lung cancer, sued Phillip Morris for negligence, strict product liability, and fraud. A Los Angeles jury awarded $850,000 in actual damages and $28 billion in punitive damages. The California Court of Appeals reversed the judgment of the punitive award only and a new trial was held in which a second jury awarded $13.8 million in punitive damages.
On appeal, the Court found that the award was not unconstitutionally excessive based on Phillips Morris’ “extreme reprehensibility.”
A similar version of the Illinois bill was first introduced by Ford in January 2022. That version of the bill died, as it was never placed on a committee schedule. Opponents of that bill included representatives of the Illinois Retail Merchants Association, Illinois Health Care Association, Illinois Manufacturers’ Association, Illinois Chamber of Commerce, and Illinois Defense Counsel.
InsuranceNewsNet Senior Editor John Hilton covered business and other beats in more than 20 years of daily journalism. John may be reached at email@example.com. Follow him on Twitter @INNJohnH.
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