In brief:

A new law (signed March 18, 2021) has expanded the options of injured Virginians (and their lawyers) to pursue moderate injury damage awards. Since 2011, there has been a $25,000 cap on personal injury lawsuits brought in Virginia’s General District Courts (smaller-claim cases tried with a judge only). This limit has long frustrated lawyers attempting to help moderately injured people recover what they deserve when the provable damages exceed $25,000, because the higher litigation expenses in Circuit Court can cancel out the additional benefits. The new limit is $50,000, effective July 1, 2021. This will give people with moderate injuries—think temporary, non-disabling injuries that require more than a single emergency room visit—a fair option for speedy and low-cost litigation in General District Court. It will also encourage insurance companies to offer fair settlements in cases where only lower insurance coverage is available, which they seldom do now without litigation. Finally, this will save much time and money by reserving jury trials for the most serious injury cases.

What does the amended law do?

SB 1108 amends several existing Code sections (mainly Code §§ 8.01-195.4 and 16.1-77) to change the maximum amount of recovery for “injury to person, regardless of theory, and any action for wrongful death” to $50,000, and should take effect on July 1, 2021. Senator Bill Stanley, Jr. (Republican, District 20) introduced the bill in 2020, and the Governor signed it on March 18, 2021, demonstrating its bipartisan appeal. As worded, the limitation affects only civil lawsuits for “personal” injuries. This likely refers to injuries to the “person” from negligence (such as automotive collisions, assaults, or slips and falls due to hazardous premises), not strictly economic injuries like breaches of contract or commercial litigation.

Why was the (old) $25,000 limit such a problem?

Most collisions and other physical injuries are (thankfully) minor and temporary in nature. For these people, there are several advantages to litigating their cases in General District Court. The big ones are speed and cost savings. Trials and hearings in General District Court are calendared more quickly (usually within 1-3 months), since they do not have a “discovery” procedure, and a judge decides the verdict (not a jury). By contrast, Circuit Court lawsuits typically take from 9 months to 2 years to complete. They have more complex discovery and motions, and the delays inherent in scheduling longer, jury trials.

Besides being quicker, the biggest advantage of General District Court for injured clients is that it is much less expensive to present the case for trial. Let’s discuss two very significant examples. First, since there are no depositions, clients save thousands of dollars in court reporter fees and transcripts, which must be deducted from any Circuit Court recovery or settlement.

Second, General District Court permits an attorney to prove his client’s medical evidence (injuries, diagnoses, treatment) and the related bills with only an affidavit (sworn written statement) of a treating medical provider. But to prove the same evidence in Circuit Court, we must hire and pay at least one expert witness, usually a doctor. Avoiding this saves the client a LOT of money. When doctors do this work, they charge a rate that approximates what they are losing by not seeing patients. So, Circuit Court cases regularly involve paying medical experts $450-1000 per hour for case reviews and opinions disclosed by rules before trial, plus another $5,000-$10,000 (plus travel) for testifying at trial.

In Virginia, the existing limit of $25,000 is usually sufficient for minor cases involving a single trip to the emergency room and temporary injuries that heal without complications or additional treatments. But clients with moderate injuries who need additional treatment or suffered lingering pain and limitations have long faced a frustrating and unjust dilemma.

Want an example?

Take this illustration: A client has injuries worth approximately $40,000. A verdict in General District Court of the maximum $25,000 (on a claim worth $40,000) would result in a maximum recovery of $16,666 ($25,000 minus one-third attorney’s fee), and would usually be available a few months after filing suit. If the client chose to pursue the value of $40,000 in Circuit Court, such a verdict would net $26,640 after deducting the same one-third attorney fee. But the Circuit Court evidence rules also require at least one qualified medical expert (sometimes more) to prove the injury diagnoses and necessary treatment. This adds up to another $10,000 or more in additional costs by the time of trial. So, the net recovery of a $40,000 Circuit Court verdict is now $16,640, and it would take three to four times as long to get as a General District Court judgment netting the same amount. Take out another $1000-2000 for a court reporter’s deposition fees and transcripts, and you end up worse off than just filing for a $25,000 demand in General District Court.

The result was that under the prior $25,000 cap, a client with claims worth $30,000-50,000 had to seriously consider limiting herself to $25,000 in General District Court, since the net result would be similar (or better). This prejudiced the injured person, while creating a tactical excuse for insurance companies to pay less on settlements as well.

Why a $50,000 cap will help injured people and save court resources:

With this change, all those clients with damages in the $25,000-50,000 range may now pursue their cases in General District Court without hesitation. That means more cases will be in a faster and less expensive forum, benefiting the injured person. Each of those cases consumes much less of the judges’ and clerks’ overall time than a jury trial, and lightens up the calendar in Circuit Courts for seriously injured people to have their cases heard sooner. This will save a LOT of money that the Courts now spend on staffing lower-value cases, since the costs of impaneling a jury are the same regardless. It will also ensure that the precious time and attention of the Virginia citizens called to serve on those juries is reserved for more serious cases.

Most importantly, Virginians with moderate injuries will net more money from their cases than they currently do. This really matters to good lawyers—we truly want our clients to be happy with their outcomes. Maximizing how much money you get for your injury is our genuine goal, and that is a lot easier when it costs less to develop the evidence and prove your claim. Put simply, every dollar less spent on litigation expense is another dollar more that you recover at the end.

Will this affect how insurance companies settle cases?

I predict the $50,000 limit will encourage insurance companies to settle those cases more efficiently and with a fairer evaluation of their value. Why? All too often, we see insurance companies taking advantage of the present cap of $25,000 to deny moderately injured clients a legitimate settlement offer when their cases are clearly worth more. They understand the dilemma imposed by the current cap and take advantage of it to offer less when they know a client has a case worth substantially more but must opt for General District Court. No more!

One particular improvement will be in cases where the negligent driver has only the state’s minimum insurance coverage of $25,000. In these cases, insurance companies currently nickel-and-dime injured clients who they believe will have to file in General District Court, since their “worst day” in that court is also their limit of coverage. Now that the potential recovery exceeds the minimum coverage, insurers will have to offer those limits more quickly or risk exposing their own clients to an excess verdict above those limits.

If you have been injured in Virginia and need questions answered, call Munro Law P.C.!

If you or a family member has been injured, call us for free answers to your questions! We regularly try cases involving injuries suffered throughout Western Virginia. This includes extensive experience in state and federal courts in Roanoke County (Roanoke, Salem, Vinton), Franklin County (Rocky Mount), Botetourt County (Troutville, Fincastle), Montgomery County (Blacksburg, Christiansburg), Pulaski County, Wythe County (Wytheville), Washington County (Abingdon), Rockbridge County (Lexington), Alleghany County (Covington), Bath County, Giles County, Craig County, Bedford County, and Augusta County (Staunton), as well as other courts throughout Virginia.