House Judiciary hears competing views on lowering Maryland’s punitive‑damages standard

The House Judiciary Committee heard extended testimony on House Bill 1099, a proposal to change Maryland’s punitive‑damages standard from the state’s current ‘‘actual malice’’ test to a gross‑negligence or reckless‑conduct standard and to consider mechanisms for the state to capture part of punitive awards.

Attorney and work‑group participant George Tolley told the committee that Maryland’s high current standard — adopted by the Court of Appeals in 1992 — requires proof of actual malice (ill will or intent to injure) and that most other states use broader tests, such as gross negligence or reckless disregard. Tolley said the bill is intended to align Maryland with other jurisdictions and to return a remedial tool in civil suits against corporations whose conduct is described as especially reprehensible.

Nut graf: Supporters framed the bill as restoring a civil penalty tool that holds corporations accountable for harmful conduct they say cannot be addressed by criminal law. Opponents — insurers, business coalitions and tort‑reform groups — warned that a lower standard would produce unpredictable “jackpot” verdicts, strain professional‑liability markets and prompt courts to impose caps or other changes later.

Witnesses for the change — including plaintiff‑attorney representatives and advocates — argued juries should be able to punish particularly reckless corporate conduct and pointed to data indicating punitive awards are rare but meaningful. Opponents such as the American Property Casualty Insurers Association, the American Tort Reform Association and business coalitions said the 1992 decision responded to an earlier surge in punitive awards and that a lower statutory standard would invite inflationary verdicts and destabilize insurance markets; they pointed to other states’ experiences and to mechanisms used there (such as caps) to contain awards.

The bill also contains a controversial provision discussed in committee: a surcharge or revenue share in which a portion of punitive awards would go to the state. Supporters noted some states tax punitive awards; critics said a surcharge would complicate jury instructions and post‑verdict judicial review and might be largely symbolic because punitive awards are often remitted or reduced on appeal.

Several lawmakers asked whether the change would increase liability premiums for health‑care providers and whether judicial review would limit extreme awards. Opponents pointed to judicial precedents cautioning that the lower standard had produced inconsistent results in the past and that Maryland’s current standard intentionally narrows availability to truly exceptional cases. Proponents noted many other states balance a broader standard with procedural safeguards, and urged careful drafting.

Ending: Committee members heard detailed fiscal and legal briefs and testimony from insurers, business groups, defense counsel and plaintiffs’ representatives. Several members indicated interest in technical narrowing language and in studying possible protections for ordinary negligence cases; the bill’s future will depend on follow‑up drafting and whether lawmakers want to revisit the 1992 court decision by statute.