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Bill to broaden punitive-damages standard draws sharp debate over deterrence and cost
Summary
HB 906 would lower Maryland's punitive‑damages threshold and introduce a state surcharge or split on punitive awards. Proponents said the change would punish corporate recklessness; insurers, hospitals and businesses warned of unpredictable awards and higher costs for consumers and public services.
Delegate Moon proposed HB 906 to make punitive damages available when a plaintiff proves gross negligence or wanton, reckless disregard by clear and convincing evidence, rather than Maryland's current "actual malice" standard.
"Punitive damages are intended to punish quasi criminal behavior," Delegate Moon said, arguing the current standard leaves some dangerous corporate or operational conduct unpunished. Proponents, including trial lawyers and consumer advocates, said the change would allow juries to punish repeated, reckless misconduct that endangers public safety.
The bill also proposes a surcharge (or alternate split) so part of punitive awards funds state programs; supporters framed the surcharge as aligning punishment with public benefit and generating revenue from penalties rather than taxes. Sponsors said safeguards — clear-and‑convincing proof and judicial screening — would limit frivolous awards.
Opponents warned MD already allows punitive awards in product‑liability contexts and said broadening the standard would raise insurance costs, discourage investment and create litigation unpredictability. Hospital groups said the move threatens the state's all‑payer hospital model and could raise medical liability premiums; insurers urged retaining the current higher standard or adding statutory caps.
Committee members pressed for quantitative estimates and asked whether a statutory cap, a narrow list of eligible claim types, or a different sharing formula could balance deterrence with affordability. Proponents said those are amendable policy levers and highlighted past Maryland cases where punitive damages were granted under other doctrines.
Next steps: lawmakers asked for fiscal modeling, cap options and comparative-state studies to weigh budget and insurance impacts before considering a report.
