When valuing potential nursing home abuse cases, many practitioners focus on standard measures of damages including past and future medical specials, a potential recovery for an elder abuse victim’s pain and suffering, wrongful death damages for the heirs of the elder abuse victim, and attorneys’ fees. While these are all important components in determining the maximum value of a case, by far the largest potential recovery in an elder abuse case lies with a punitive damages award.
How can we realistically value punitive damages?
While we agree that assessing what a jury might award for punitive damages is speculative at most, one cap on punitive damages operates as a hard limit. Specifically, under California law any punitive damages award is capped at 10% of the net worth of the defendants (Weeks v. Baker).
This hard cap has substantial implications for maximum case value. For example, assume the damages relating to a particular plaintiff are identical in Case A and Case B at $5 million. The only difference between the cases is that in Case A the defendant is a stand-alone facility with a value of $10 million, whereas in Case B the defendant is part of a nursing home chain with an enterprise value of $250,000,000. In Case A the maximum potential value of the overall case is $6,000,000, whereas in Case B the maximum potential value of the overall case is $30 million. As this example illustrates, enterprise value means everything when it comes to determining the maximum potential value of a case. Practitioners should conduct at least a back of the envelope enterprise value as part of their intake process.For Attorneys