California’s End to the “Death Discount” in Personal Injury Litigation
In late 2021, California became the 46th state to do away with the so called “death discount.” The “death discount” is a term used by plaintiffs and their attorneys which refers to the supposed “discount” that defendants receive when plaintiffs die mid-litigation. In California, historically when a plaintiff filed a personal injury action relating to his/her own injuries and then died mid-litigation and the case was converted to a wrongful death action, the value of the case was viewed as substantially diminished. This is because in California, under the Code of Civil Procedure (“CCP”), pain and suffering damages were deemed to be non-recoverable following a plaintiff’s death. Instead, damages were limited to “the loss or damage that the decedent sustained or incurred before death, including any penalties or punitive or exemplary damages that the decedent would have been entitled to had the decedent lived.” (CCP Section 377.34)
In October of 2021, however, plaintiffs and their attorneys throughout the state cheered when California Governor Gavin Newsom approved and signed into law Senate Bill Number 447 (“SB 447”) which now allows the personal representatives of estates to recover pain and suffering damages in California litigation matters. The new legislation amends CCP Section 377.34, now permitting successors-in-interest to recover for a decedent’s pain, suffering, or disfigurement where the action or proceeding was either granted preference before January 1, 2022 or was filed after January 1, 2022 and before January 1, 2026.
This amended Code section could certainly change the game with respect to how matters are valued in California following the death of an injured plaintiff. Now, survivors or personal representatives of a decedent may recover damages for pain and suffering, which could result in substantial increases in the amount of damages awarded in survival actions.
Although pain and suffering damages are now available to survivors or personal representatives, such damages are often difficult to ascertain. Pain and suffering damages fall under the category of “non-economic damages” as they are difficult to quantify, unlike economic damages which include direct financial losses such as wage loss, hospital bills and medical expenses. One way that pain and suffering damages are often measured is by the severity of the injury. For example, if the injury is permanent, one can expect the pain and suffering damages to be significant.
Though it can be difficult to put a price tag on the monetary amount of someone’s pain and suffering, due to the possibility of greater recovery at trial, it is expected that the new legislation will result in increased settlement demands which could translate to larger settlements paid to decedent’s representatives in survival actions.
There remain questions as to how CCP Section 377.34 will be applied, including whether it applies to personal injury actions which were filed before January 1, 2022, where the injured plaintiff later dies, and the same action is re-filed after January 1, 2022 by a survivor of the decedent as a wrongful death action. Additionally, it remains to be seen if the new version of CCP Section 377.34 will become permanent California law after 2026.
While the newly amended CCP Section 377.34 is being viewed as favorable for plaintiffs, there could be a silver lining for defendants as well. An often stated reason provided by plaintiffs when seeking preferential trial dates has been the race against the clock to take their case to trial before the plaintiff dies, in large part so they will not lose their right to recover their pain and suffering damages. However, with the newly amended statute, that argument is no longer applicable and we may see judges becoming more critical in their evaluation of preference motions, especially given the massive pandemic-related backlogs. In addition, with pain and suffering damages preserved, we also anticipate that plaintiffs’ firms may not be worried about rushing to move for preference for fear of losing out on potential damages and will instead turn their focus to requesting preference to secure a trial date to leverage favorable settlements for their clients or to allow the injured plaintiff to testify live at trial, which has become more difficult for sick plaintiffs due to limited availability of trial courts resulting in multiple trial continuances.
As we enter the second quarter of 2022, cases that fall within the scope of the current amended Code provision will begin to complete discovery and reach the stage where the parties engage in settlement discussions and/or inch closer to trial. At Walsworth we will continue to follow and track the impact of the new law on settlement demands and case valuations for our clients.