Canadian Underwriter

U.S. Supreme Court again limits civil awards

May 23, 2003   by Canadian Underwriter

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On the heels of a decision to limit civil judgements against State Farm, the U.S. Supreme Court has again declared two separate multi-million-dollar verdicts against Ford Motor Co. as excessive.
This week, the Supreme Court said that judgements of $290 million in California and $18 million in Kentucky must be reconsidered by lower courts as they are too high.
Recently the high court made a similar judgement in the case of State Farm v. Campbell to limit jury verdicts. State Farm had been hit with $145 million in punitive damages on compensatory damages of only $1 million.
“Since the Supreme Court handed down State Farm v. Campbell, those who opposed rational and principled limits on jury verdicts have been trying to qualify the decision,” notes Peter Bisbecos, legislative and regulatory counsel for the National Association of Mutual Insurance Companies. “There have been many statements that this decision only applies in limited circumstances. The Supreme Court’s action in these two cases lays much of that speculation to rest.”
In the State Farm case, the court suggested no more than a single-digit ratio (i.e. no higher than a 9:1 ratio of punitive to compensatory damages) is appropriate in most cases.

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