Capping liability

In theory, caps on lawsuit damages are supposed to spare defendants from destitution. That certainly was the intention of lawmakers when, in 1979, they decided that Nevada governments would not have to pay damages of more than $50,000 when sued in state court.

However, nearly 30 years later, the statutory cap is costing taxpayers dearly. Meant to avert the fiscal Armageddon of an eight- or nine-figure jury verdict, the $50,000 limit gives plaintiffs and public agencies no incentive to take lawsuits to trial and every reason to settle them. What's the point in litigating a case for months or years, piling up hefty attorney fees along the way, when it can be made to go away with a $50,000 check?

Perversely, public-sector attorneys get to boast that they've saved taxpayers the cost of a trial by settling a completely baseless claim.

Sen. Terry Care, D-Las Vegas, sponsored a bill to double the damage cap for Nevada governments to $100,000. Although Sen. Care, an attorney, introduced Senate Bill 66 primarily out of inflationary concerns, the measure would no doubt make public agencies less eager to settle frivolous claims -- and more apt to hold the institutions or personnel responsible for the payout accountable.

The bill passed the Senate 14-7 and the Assembly 29-13, but on Wednesday, Gov. Jim Gibbons vetoed the legislation. Gov. Gibbons said "some type of increase is undoubtedly appropriate, (but) increasing the tort cap by 100 percent is unnecessarily burdensome and fiscally harmful to government entities."

Local governments lobbied hard against the bill, arguing that it had the net effect of doubling their liabilities. That argument, however, assumes that local governments would continue to cut maximum settlement checks ad nauseam without any consideration of the merits of each claim.

Sen. Care's proposal is far from dead, however. He inserted the same legislation, as an amendment, into a bill that would increase Nevada's homestead exemption. That bill awaits a signature or veto from Gov. Gibbons.

If Gov. Gibbons decides to veto the homestead measure because of Sen. Care's amendment, the Legislature should move to override the governor's first veto before Monday's adjournment.