WHILE SERVING a sentence in a Missouri correctional institution for youthful first offenders in 1976, a young man named Daniel R. Wade was repeatedly assaulted by other inmates. He sued the guards. A jury found one of them liable, and awarded Mr. Wade compensatory damages of $25,000 plus $5,000 in punitive damages.

An appeal to the Supreme Court was decided last week, but not on the issue you might have thought. The court managed to dispose of the case without reaching any of the large and obvious questions of public policy in it. As a general remedy for officials' errors, lawsuits against them as individuals--going after their personal savings and homes--is not appealing. There has to be a limit to the personal jeopardy public employment imposes. But it's possible to argue that a different standard has to apply where officials deal with people wholly in the state's power.

The law is clear, for example, that jailers may not act in a grossly negligent manner that results in injury to persons in their custody. A federal statute, enacted in 1871, gives citizens the right to sue government officials personally for violations of civil rights. In this case, the court held, 5 to 4, that the 1871 statute permits punitive damages and that the plaintiff doesn't have to prove malice to collect. But Justice Rehnquist, writing in dissent for himself and two other justices, took issue with the whole concept of punitive damages. Civil suits are to compensate, not to punish, he argues; penalties belong in criminal cases, where tougher standards apply, and if they are assessed at all, they should be paid in the form of fines to the government, not as a windfall to the plaintiff who has already been awarded full compensation for his injuries.

But it is a brief, separate dissent by Justice O'Connor that brings the case out of the realm of history and legal theory. The statute, the legislative history and the earlier cases on the question of punitive damages are, at best, unclear. The court, she argues, should consider these questions instead: will a standard permitting an award of unlimited punitive damages on the basis of recklessness inhibit public officials in the performance of their duties more than it will deter violations of the Constitution? And will such additional awards, together with attorney's fees already authorized to be awarded to a successful plaintiff, create an incentive to bring more of the frivolous suits that are already clogging the federal courts?

The increasing frequency of suits filed against government officials at all levels merits congressional attention. Are personal liability suits the best means of enforcing civil rights? Should governments themselves assume the liability in these cases as they do for ordinary personal injuries? Can insurance be provided to reassure government employees that they will not risk personal loss, or would it cancel out incentive to act with care? These are questions to be resolved not by courts but by congressional legislation.