On June 3, 2024, Governor Jared Polis signed Colorado House Bill 24-1472 into law, marking a pivotal change in the state's legal framework around damages. This legislation significantly raises the limits on noneconomic damages, wrongful death claims, and medical malpractice awards, while also allowing siblings to bring wrongful death actions in certain cases. These updates carry substantial consequences for businesses and insurers operating in Colorado. This article explores the practical outcomes of these changes and how they may impact litigation and risk management.
The last major revision to Colorado's statutory damages caps occurred on January 1, 2020, following an inflation-driven update from 2008. The latest law introduces several crucial adjustments.
Key Changes in Damages Caps
House Bill 24-1472 elevates the caps on noneconomic, wrongful death, and medical malpractice damages. It also extends the right to file wrongful death claims to siblings, expanding the scope of potential plaintiffs under certain conditions.
Updated Cap Limits
Starting January 1, 2025, the new limits for lawsuits will be:
- Noneconomic Damages: Raised to $1.5 million, from previous caps of $729,790 and $1,459,600.
- Wrongful Death Damages: Increased to $2.125 million, up from $679,990. If the death is classified as a felonious killing, there will be no cap on damages.
- Medical Malpractice in Wrongful Death Cases: Gradually increasing to $1.575 million over five years, with inflation-based adjustments every two years. The previous limit was $300,000.
- Medical Malpractice Claims: The cap will rise to $875,000 over five years, adjusting for inflation biannually.
Inflation-Proof Adjustments
A critical element of this law is the mandatory inflation adjustments for damages caps every two years, starting in 2028. This ensures that future claims align with ongoing economic shifts.
Decoupling from the Accrual Date
Another important change is that the $1.5 million cap will no longer be tied to the claim's accrual date. This means all suits filed on or after January 1, 2025, will be subject to the new cap. Regardless of when the loss or incident occurred. Claims professionals will need to carefully consider this shift when assessing potential liability.
Influence on Litigation and Settlement Trends
It is expected that House Bill 24-1472 will temporarily slow the pace of new lawsuit filings toward the end of 2024. Attorneys may advise clients to delay filing until the new caps take effect, potentially leading to a flood of cases in early 2025. Moreover, the increased caps may push claimants to hold out for larger settlements, reducing the likelihood of early resolution.
Moving Forward
The changes brought by House Bill 24-1472 will have a profound impact on businesses and insurers operating in Colorado. The increased damages caps and other revisions will likely shape litigation tactics. After the timing of the claims and increase settlement demands. For businesses and insurers, staying ahead of these legal changes is critical to managing exposure effectively and adapting to the evolving legal environment in Colorado.
For the full text of the bill, please visit: https://legiscan.com/CO/bill/HB1472/2024.