Proposed Punitive Damages Bill Would Raise Costs for Maryland Families and Small Businesses Without Improving Safety

Annapolis, MD - March 10, 2026 - A bill moving through the Maryland General Assembly that would dramatically expand punitive damages and impose a new state surcharge would undo decades of settled law, expose routine negligence cases to uncapped punishment, and drive up costs for Maryland families-without making communities safer.

The legislation is opposed by hospitals, physicians, insurers, employers, and small businesses across the state.

As reported by The Daily Record, the bill would lower Maryland's long-standing punitive damages standard from "actual malice" to a broad "gross negligence" definition and add a 50 percent surcharge on top of any punitive damages award, with the additional money directed to the Blueprint for Maryland's Future education fund.

There are multiple concerns with this legislation

• Punitive damages in Maryland are already unlimited
• The bill revives a standard Maryland courts already rejected
• Higher costs would be passed on to Maryland families
• The bill turns civil punishment into a revenue-raising mechanism
• There's no evidence the change would improve safety

• There is broad and diverse opposition

Punitive damages in Maryland are already unlimited

• Maryland places no cap on punitive damages-unlike nearly all neighboring states.
• Lowering the standard while keeping awards unlimited increases the risk of runaway verdicts.

• Corporate investors pour billions of dollars each year into lawsuits, seeking to use working class Americans as vehicles for their investments that often yield big dividends for the lawyers and financial backers, while driving up the cost of living for everyone.

  "Punitive damages are an extraordinary remedy," said representatives of the Maryland Employers for Civil Justice Reform Coalition. "Lowering the standard while leaving damages uncapped exposes virtually every negligence case to punishment."

The bill revives a standard Maryland courts already rejected

• Maryland's highest court abandoned punitive damages based on gross negligence more than 30 years ago after finding they produced inconsistent and unpredictable verdicts.
• The current "actual malice" standard has provided clarity and stability ever since.

• This bill would roll back decades of settled law and return Maryland to a system the courts themselves found unworkable.

Higher costs would be passed on to Maryland families

Insurers, hospitals, and employers warn broader punitive exposure would result in:

• Higher insurance premiums for drivers, homeowners, doctors, and small businesses
• Higher prices for everyday goods and services

• Reduced access to care, as hospitals and physicians divert limited resources to rising liability costs

The bill turns civil punishment into a revenue-raising mechanism

• The proposed 50% surcharge would be added on top of whatever amount a jury awards.

• Juries would not be informed that their verdict triggers additional payments to the state.

There's no evidence the change would improve safety

• Legislative reviews and national comparisons show no evidence that states with broader punitive damages standards experience less misconduct or are safer.

• Maryland already has strong deterrents, including criminal penalties, regulatory enforcement, and full compensatory damages for victims.

Broad, Diverse Opposition

Organizations opposing the bill include:

• The Maryland Hospital Association
• MedChi, the Maryland State Medical Society
• The American Property Casualty Insurance Association
• Medical professional liability insurers
• Employers and small business coalitions