Will Victims of the Amtrak Accident Receive Adequate Compensation?

| May 28, 2015 | Comments (0)

Damage Caps in Amtrack Accident Lawsuits

With hundreds of personal injury claims likely to be filed against Amtrak in the coming months, will victims receive their fair share?

On May 12th, 2015, an Amtrak train derailed in Philadelphia, killing 8 and injuring over 200 of the 238 passengers, including 11 critical injuries. Investigators are currently trying to determine whether the conductor was using his cell phone at the time of the accident.

In light of the tragedy, many are discussing The Amtrak Reform and Accountability Act of 1997, which capped ALL damages in cases pertaining to train accidents involving Amtrak. The cap is set at $200 million per accident, which means that even in cases where hundreds people are injured, like the incident last week, the maximum that Amtrak’s insurers will have to pay out is $200 million dollars.

Why do damage caps exist?

Damage caps are instituted on a state and federal level in order to help big insurance companies under the guise of cutting down on the amount of frivolous lawsuits. How would a cap of $200M cut down on frivolous claims? It doesn’t. It’s simply a measure intended to limit the liability of Amtrak, and these reforms are heavily backed by big insurance.

Most caps on damages have been instituted in the area of medical malpractice.  For example, in Texas, all medical malpractice claims are capped at $250,000 in non-economic damages. Does this stop frivolous cases? Of course not; it just prevents insurance companies from having to fully reimburse those with the most serious claims.

Generally, the types of damages which are capped are non-economic or “hedonic” damages, which include permanent disability, disfigurement, blindness, loss of limb, paralysis, or pain and suffering. Medical payments, lost wages, and lost future income are considered economic damages and are usually not capped. However, in cases where the elderly, children, or other persons who do not work are injured, non-economic damages are generally their primary means of compensation.

So what is different about the The Amtrak Reform and Accountability Act of 1997? Well, the act caps all damages, not just certain types. This is relatively rare, especially at the federal level.

Why was the act passed?

In 1997, Amtrak was in big trouble and all efforts to make the rail company self-sufficient without government funding had failed. Their debt obligations had continued to increase but Congress determined that intercity rail passenger service was an essential component of a national intermodal passenger transportation system and they immediately wanted to improve Amtrak’s financial situation. In order to try and keep them afloat, they instituted the damage cap so that, in the case of a massive accident that would potentially cost them hundreds of millions, a lawsuit would not cripple the company and send them into bankruptcy.

However, for victims of the most recent accident, the fact that the nation may need Amtrak to continue providing rail service does not comfort them when faced with the prospect of limited or no damages for their injuries. Why should those who’ve been seriously injured due to Amtrak’s negligence take less money than their owed just to help the business which caused their injuries (or death)?

Often times, companies will deposit the maximum amount allowed via damage cap with the court and the judge will be the one who distributes the money. This often leaves judges in an impossible situation, having to decide which injuries deserve the most money, spurning other injuries in the process. Some injuries which result in long-term medical problems can cost many millions of dollars because the victim is often being compensated for a medical issue which will last for the rest of their life.

Further, if the damages cap is reached, and then later other persons who may have suffered latent injuries wish to file suit, they will be completely out of luck.

What can Congress do?

If Congress feels pressure from their constituents, it is possible that Congress could repeal the act and remove the cap. Most of the concerns which the act addressed are still legitimate, so they would not necessarily have to repeal the entire act, they could just repeal the damage cap. This is a big, visible tragedy and Congress may take note of the plight of the victims in this situation if their claims prove to be limited by this arbitrary damages cap.

Frankly, the effectiveness of damage caps have always been in question. While those in the legal industry see right through this pandering to big insurance, most ordinary people do not fully grasp the gravity of what these caps mean to the victims. Insurance companies make billions of dollars in profit, and their sole raison d’être is to provide the money needed to make victims whole again.  Why are we punishing the innocent victims to protect the negligent company’s financial interests?


Category: In The News

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