Caps on non-economic damages persist as a popular tort reform component. What such caps achieve, however, remains understudied. A paper by Hyman (Illinois), Black (Texas), Silver (Texas), and Sage (Texas), Estimating the Effect of Damage Caps in Medical Malpractice Cases: Evidence from Texas, reports results from their study of Texas's 2003 cap on non-economic damages on jury verdicts, post-verdict payouts, and settlements in medical malpractice cases closed during 1988-2004. Critical to this study are the claim-level data that include information on settlements. An excerpt from the abstract, below, summarizes key findings.
"For pro-plaintiff jury verdicts, the cap affects 47% of verdicts, and reduces mean allowed non-economic damages, mean allowed verdict, and mean payout by 73%, 37%, and 26%, respectively. In total, the non-econ cap reduces adjusted verdicts by $156M, but predicted payouts by only $60M. The impact on payouts is smaller because a substantial portion of the above-cap damage awards were not being paid to begin with. In cases settled without trial, the non-econ cap affects 18% of cases; and reduces predicted mean payout for non-economic damages (predicted mean total payout) by 38% (18%). The non-econ cap has a smaller impact on settled cases than tried cases because settled cases tend to involve smaller payouts."