St. Louis Record

Sunday, January 19, 2020

More than $20 million disbursed to victims from punitive damages awards fund, Labor Department figures reveal

Hot Topics

By John Breslin | Dec 2, 2019


JEFFERSON CITY – More than $20 million was deposited in funds for legal services and to help victims of accidents unable to collect damages or otherwise be compensated for their injuries over a 15 year period to the end of 2017, according to figures released by the Missouri Department of Labor and Industrial Relations.

The money comes from punitive damages after legal actions are finally settled as 50 percent of the awards - minus attorney fees and costs - must be sent to the state and placed in funds for victims and to pay for basic legal services.

In total, just more than $15 million was disbursed over 15 years under the Tort Victims Compensation Fund, including close to $7 million in funds sent out in 2018 for the previous four years of claims. Under the 1987 statute setting up the program, 74 percent goes to the compensation fund with the remainder placed in a Basic Legal Services Fund.

From these figures it can be calculated that approximately $60 million was awarded in punitive damages from 2003 to the end of 2017, with this amount based on around a third of that amount going to pay for attorney fees and costs.

Recent high-profile cases have drawn attention to the funds, including one where an attorney announced his firm had deposited $10 million into the pot, delivering a huge boost as the amount available for victims currently stands at just more than $400,000, according to the labor department.

The other involved St. Louis County Police Sgt. Keith Wildhaber, who was found by a jury to be discriminated and retaliated against by St. Louis County because he is gay. He was awarded $20 million, including $17 million in punitive damages, but is reported to be prepared to settle for a lower amount because so much of the total will be going to the state.

While the law was passed in 1987, payouts from the victims fund did not begin until September 2003, covering an initial claims period that ran from the middle of 2001 to the end of 2002 but involved incidents and accidents from previous years. A total of $4.8 million went to roughly 400 claimants.

In total, and including the initial claims period, $20 million was disbursed by the victims fund, with approximately a further $5 million going to legal services.

Over the years, the number of those receiving money has fluctuated between 20 and 40, with claimants receiving from 1.4 to 35 cents on the actual dollar value of the successful claim. The labor department's Division of Workers' Compensation evaluates and manages the claims.

"At the end of CY 2017, the Department continued to make pro rata payments to the successful claimants from multiple annual claims periods in a single year," Department of Labor Strategic Communications Director Delores Rose said.

"The payments for the years 2014, 2015, 2016 and 2017 Annual Claims Periods were included in the June 30, 2018 payout," she said. "This was favorable to the claimants in that it resulted in a pro rata payment of 34.9 percent of the awarded amounts for those years." The division paid out $6.8 million in 2018 to more than 100 claimants.

"No payments were made in 2019 to the successful claimants in CY 2018 because there was only $407,371.02 in available funds for the payouts, which would equal about 5 percent of the awarded amounts," Rose explained.

"The Department has historically paid multiple annual claims periods in a single year depending upon the availability of funds," Rose said.

"The Department believes that with the deposit of additional monies into the TVCF, the pro rata payments to the successful claimants who were awarded benefits in 2018 and for the successful claimants who will be awarded benefits in 2019 will be at a greater percentage."

Apart from the initial claims period, and the latest pay out in 2018, a multiple year calculation was made for the years 2006-2008.

The funds, both for direct to victims and legal services, was boosted by the announcement earlier this month by plaintiff attorney Michael Ketchmark of Ketchmark & McCreight that around $10 million was deposited.

This follows the final settlement of a legal action against Ford Motor Co. by the widow and a son of a delivery driver who died at the company's Kansas City plant. A jury awarded the plaintiffs $76 million – half in actual damages, half for aggravating circumstances.

A three-judge panel of the Court of Appeals of Missouri affirmed the award in June after rejecting the defendant's argument that the driver, David Ford, was trespassing in the area where he died in December 2015.

"I believe the fund is working as planned," Ketchmark, the family's attorney, said. "I think the law is appropriate. I only wish that the jury was informed of how this works when the damages are awarded. "

"The purpose of punitive damages is to punish the defendant," Ketchmark said. "It is very satisfying when a wrongdoer is forced to pay into a fund that goes to other victims. The fact that $2.6 million of this goes to Missouri’s Legal Aid to provide legal services to the poorest of the poor is even better."

Defense attorney Catherine Hanaway of Husch & Blackwell in St. Louis believes the TVCF is underfunded as she cited one year when $10 million was successfully claimed but only $366,000 was paid out.

"Currently, the state has a right to collect 50 percent of any punitive damages awards in the state, after attorneys’ fees and expenses are deducted," said Hanaway, who was a Republican gubernatorial candidate in 2016.

As a candidate, Hanaway promised to work with the General Assembly to increase the percentage to 75 percent and "calculate that percentage based on the total punitive damages award, instead of the current system of first deducting attorneys’ fees and expenses."

She added, "This will further the cause of justice by compensating more fully those with valid claims to submit to the fund, while at the same time disincentivizing plaintiffs and their lawyers from chasing unwarranted punitive damages awards."

Earlier this month, it was reported that Wildhaber had agreed to mediation to reach a settlement and avoid appeals by his employer. A jury found the police officer suffered discrimination and retaliation because he was gay, and awarded him $20 million, including $17 million in punitive damages.

According to the St. Louis Post-Dispatch, the two sides are contemplating a settlement as the county wants to reduce its liability while the plaintiff could keep a larger percentage of the award if he settles.

Want to get notified whenever we write about Missouri Department of Labor and Industrial Relations ?

Sign-up Next time we write about Missouri Department of Labor and Industrial Relations, we'll email you a link to the story. You may edit your settings or unsubscribe at any time.

Organizations in this Story

Missouri Department of Labor and Industrial Relations

More News