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Under a recently passed law, Colorado has increased the limits on compensation recoverable through personal injury, medical malpractice, and wrongful death actions. These caps will automatically increase biannually according to inflation. The law also makes other changes to wrongful death actions in Colorado, including authorizing siblings of decedents to file claims under certain circumstances.
The legislature made these changes to ensure that the statutory limits on financial recovery in personal injury claims reflect current economic circumstances. The goal is that, by adjusting them automatically in response to inflation, the legislature will no longer need to pass new laws regularly to change the limits.
Why Are Colorado’s Damage Caps Changing?
Colorado first established caps on various forms of compensation in personal injury claims in the 1980s. Some of these statutory caps on personal injury compensation have remained untouched for nearly two decades, despite economic developments during recent years that have reduced the purchasing power of the dollar. This lack of action has effectively reduced the value of many types of compensation recoverable in personal injury cases.
With that in mind, the Colorado government has decided to increase the statutory caps on personal injury, medical malpractice, and wrongful death claims in response to economic changes in recent years – particularly the high interest rates experienced in the U.S. Their new law also ensures that caps will adjust automatically on a biannual basis to reflect inflation over the past two years. This change eliminates the need for the legislature to pass a new law increasing the caps, avoiding situations where the statutory caps remain untouched for years and eventually no longer reflect the current economic reality.
The law also gradually adjusts the increase in the cap on medical malpractice compensation over the next five years, which can help prevent sudden, drastic increases in medical malpractice insurance costs for providers. Instead, it gives providers and insurers a timeframe to plan for and evaluate how the increased caps may affect medical malpractice compensation awards in Colorado. Contact our Denver personal injury attorney today for help.
What Are the New Changes Regarding Damage Caps in Colorado?
Under the new Colorado law, the cap on compensation for non-economic losses will increase from $250,000 to $1.5 million. For wrongful death compensation, the law imposes a new cap of $2.125 million. These new caps will apply to cases filed on or after January 1, 2025. Beginning on January 1, 2028, the caps will adjust based on inflation every two years.
The law also implements a schedule to gradually increase the cap on non-economic losses in medical malpractice claims from $300,000 to $875,000 over five years, beginning on January 1, 2025. After that, the cap will adjust every two years for inflation. Similarly, the cap on medical malpractice compensation in wrongful death cases will increase gradually over five years beginning on January 1, 2025. It will eventually reach a limit of $1.575, adjusting every two years after that for inflation.
What Is the Difference Between Economic and Non-Economic Damages?
Among the biggest changes made by the legislation are those involving non-economic damages. In personal injury and wrongful death cases, non-economic losses refer to the emotional suffering and trauma that someone experiences due to injury or a family member’s wrongful death. Common examples of non-economic losses include:
- Physical pain from injuries or subsequent medical treatment
- Emotional trauma or distress from an accident
- Lost quality of life caused by disabilities or disfigurement and scarring
- Loss of consortium, or the marital closeness shared by spouses
- Emotional grief and sorrow from a loved one’s wrongful death
Non-economic compensation in personal injury and wrongful death cases differs from compensation for economic losses – such as medical bills, lost wages, or long-term care costs – in several ways. First, compensation for economic losses focuses on providing money to pay for specific financial expenses. In contrast, non-economic losses focus on the emotional and physical suffering experienced by a victim.
Claimants in personal injury or wrongful death claims can calculate economic losses by referring to financial records such as medical bills, invoices, receipts, pay stubs, and income statements. This documentation allows claimants to reasonably estimate future economic losses. On the other hand, determining fair compensation for non-economic losses typically involves subjective considerations based on lived experience and common sense to determine the value of physical pain and emotional suffering that a claimant has experienced.
Should I File My Lawsuit Now or Wait Until the New Year?
The new law states that the increased caps will take effect for cases filed on or after January 1, 2025. As a result, the new caps will apply based on when a plaintiff files their personal injury, medical malpractice, or wrongful death claim instead of when the claim accrued. Some plaintiffs with injury or wrongful death claims may benefit by waiting to file a lawsuit in their case until after New Year 2025, as they can take advantage of the increased caps by filing in the new year.
However, individuals and families with personal injury, medical malpractice, or wrongful death claims should consult with an attorney about when to file their claims to maximize their potential financial recovery. For example, people who have claims for which the statute of limitations will expire before January 1, 2025, may have to file their claims before the New Year or risk losing the opportunity to seek any compensation in court. Once the statute of limitation expires on a claim, defendants can move to have it dismissed.
Contact a Colorado Personal Injury Lawyer
If you’ve been hurt or lost a loved one due to someone else’s negligence in Colorado, you may be entitled to compensation for what you’ve suffered. Contact The Wilhite Law Firm today for a free, no-obligation consultation with an experienced personal injury attorney to learn about the new Colorado damage caps and how they may affect your case. We are prepared to handle your case at no upfront cost to you, accepting our fee only if we recover compensation on your behalf.
