Legislature(1997 - 1998)
03/21/1997 01:05 PM House JUD
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
HB 10 - MANDATORY MEDIATION/DESIGN PROF LAWSUITS CHAIRMAN GREEN advised members they would next consider CSHB 10 (L&C), "An Act requiring mediation in a civil action against an architect, engineer, or land surveyor; amending Rule 100, Alaska Rules of Civil Procedure." As Chairman Green was the prime sponsor of the bill, he asked that his legislative aide, Jeff Logan, explain the bill to the committee. JEFF LOGAN, Legislative Assistant to Representative Joe Green, advised members that HB 10 was an effort to keep people out of court, not by restricting their rights to file an action, but rather by providing an alternative venue, and an alternative method to address their complaint. MR. LOGAN explained that the goal of the bill was to facilitate a mutually agreeable pretrial settlement. He noted that if a plaintiff was seeking damages from a design professional, the case must go to mediation. Mr. Logan noted that there were a few specific, limited exceptions. He stated that unless all the parties to the suit agreed to waive the mediation process they would go to court, which was the first exception. Mr. Logan stated that if the judge assessed the defendant with all the costs of the mediation, that in those cases, the defendant could opt out and go straight to court. MR. LOGAN advised members they envisioned the process as someone going to court and filling out some forms and file them with the court. The case would then be assigned to the judge, and after the defendant is served, a mediator would be appointed by the court. If the parties could agree on the mediator, the judge would appoint that person, and if they did not agree, there was a process where the judge would select three names and they would work between the parties to find one they did like. At that point, the plaintiff and the defendant would meet with the mediator in an informal conference. Prior to this meeting, the parties could provide the mediator with up to a five page brief that explained the situation as they saw it. The mediator could meet individually with the parties after the initial meeting, but they must all meet together the first time. MR. LOGAN pointed out that the meetings were private, the discussions would be confidential, and the mediator could not be called upon in court to discuss what occurred in the meetings. He advised members that there was a process for discovery set out in Civil Rule 26, which was immediate, mandatory discovery. MR. LOGAN advised members if one of the parties felt they could not get what they wanted from the mediation process, they could, at that point go to court. If the parties thought they could succeed with the mediation process, they would continue until they reached a settlement. The plaintiff would file a motion for dismissal and it would be over. MR. LOGAN noted that the question had been posed as to why the bill referred only to design professionals. He advised members that Representative Green had received a letter dated December 12, 1994, from a constituent who asked for some means to separate, and determine, some way to find those actions that really had merit. Mr. Logan pointed out that his office had gone through a process for the past couple of years, and over that time period, no one else had asked to be involved in the type of process offered in HB 10, which was why it only applied to design professionals. MR. LOGAN expressed that the question had also been posed as to whether the bill was addressing tort reform. He stated that the action did not involve, or address in any way, joint or several liability and did not limit awards of economic, or non-economic damages, did not address collateral source, nor did it address punitive damages, or penalize parties or bring frivolous suits. For those reasons Representative Green did not believe it was tort reform, but a civil justice process and procedure reform. Number 525 REPRESENTATIVE BERKOWITZ asked if Mr. Logan had an idea as to the number of mediation cases filed with the court system. MR. LOGAN advised members he could not answer that question because the court system did not maintain a record of those types of actions. He felt the design professionals might be able to address that question. REPRESENTATIVE BERKOWITZ asked how the mediation would go if one design professional was one of several co-defendants. MR. LOGAN advised members they would mediate as a group, and could appoint someone within the group to represent them during the mediation process. REPRESENTATIVE BERKOWITZ stated then, that anytime there was a design professional as a co-defendant, mediation would be available. MR. LOGAN stated that would be correct. REPRESENTATIVE BERKOWITZ disagreed with the assessment that the proposed legislation was not tort reform. He stated that if he understood Mr. Logan correctly, that he said there would be no damage limitation, no punitive damage cap, and no non-economic damage cap. MR. LOGAN advised members that would be correct. CHAIRMAN GREEN pointed out that in mediation, the settlement would be agreed to, not court rendered, which was a lot different than tort reform. Number 600 REPRESENTATIVE JAMES noted the response by Mr. Logan regarding why the bill would effect only design professionals, and asked if they had asked others if they wanted to be included in the proposed legislation. MR. LOGAN advised members they had not. REPRESENTATIVE JAMES asked if Mr. Logan could explain how the costs were paid. MR. LOGAN referred to the Rules of Court, Rule 100, which was what the bill was based on. Mr. Logan advised members that the judge would decide who would pay; however, it was generally born equally by the parties involved. He stated that if for some reason that could not happen, the judge would issue an order stating the defendant, or the plaintiff would be responsible for a higher percentage. CHAIRMAN GREEN noted that if the judge ordered 100 percent of the costs to be born by the defendant, his recourse would then be to opt out of the mediation process. REPRESENTATIVE BERKOWITZ felt it might be a good idea to have the Judicial Council, or some other record keeping group, oversee the process in order that it could be used as a pilot program in the future. If other groups wished to follow suit, the hard data would be available for review purposes as well as a pattern to follow. Number 713 REPRESENTATIVE JAMES agreed with the idea of a pilot program, and asked the Chairman if he would be willing to include some language within the bill that would reflect that, and that other groups would have the opportunity to opt in if they wished. CHAIRMAN GREEN felt that was a possibility, although he noted the bill had passed through another committee who perhaps did not feel it was necessary to cover a wide spectrum of people; however, to consider it a pilot project, in its own right, he felt would be appropriate. REPRESENTATIVE BERKOWITZ felt that rather than have an opt-in clause included within the bill language, the data could be kept for later consideration. CHAIRMAN GREEN pointed out that the minutes of the meeting would reflect the intent of the committee; however, he had no objection to crafting a letter that would state HB 10 would be useful as a pilot project. REPRESENTATIVE BERKOWITZ noted that when discussing tort reform, they had suggested that the Judicial Council maintain records on the issue of settlements. CHAIRMAN GREEN expressed that to require the Judicial Council to do more than review the process might result in a fiscal note because of the additional burden placed on them. REPRESENTATIVE JAMES asked if it would be possible for the design professionals to maintain some type of record that would reflect how the program was working. CHAIRMAN GREEN thought that could be quite possible. Number 854 COLIN MAYNARD, Representative, Alaska Professional Design Council, advised members they were in favor of the bill and that they had been attempting to get some sort of legal system reform because 90 percent of the cases did not go to trial. He explained that the discovery process was very expensive, and a week before the scheduled trial date, they were faced with a business decision of settling for $50,000 or spending $50,000 to defend a case, which was a gamble that the decision would be in your benefit. Mr. Maynard pointed out that there had been enough publicity about adverse decisions that did not make much sense, and the gamble was not a very inviting proposition. MR. MAYNARD advised members the Design Council felt the system presented in HB 10 would work because it would require immediate, mandatory discovery that would provide a good idea of what the case was about. At that point, the parties go to mediation and the case should settle during that process. He noted that it was their understanding that in the state of Washington 80 percent of the cases were settled either during mediation, or shortly thereafter. Mr. Maynard noted that most of the cases would be out of the system at that point; they would not go through the deposition or interrogatory process and would be much less costly. He expressed that the plaintiff would also have an independent reviewer advising as to whether they had a case or not, early on in the process. MR. MAYNARD urged that members vote in favor HB 10, adding that it would also lighten the load on the court system, as well as save money for the design professionals. Number 975 REPRESENTATIVE CROFT advised members he was in support of the proposed legislation, although pointed out that in the letter presented by the Design Council, it stated that over 90 percent of civil suits never went to trial. He stated that he did not understand why that was not considered a success, rather than a failure. Representative Croft advised members that the discovery process provided merits to a case, and he felt that the more cases that could amiably settled, rather than forced to trial, the better. Representative Croft asked why the settlement figure was something that showed the legal system needed modification. MR. MAYNARD stated that the difference to him was that most cases go through a long, drawn out process and cost a lot of money to get no where. He advised members if the process could be cut in half, or more, it would save everyone a lot of money and time. Mr. Maynard stated that the reason cases did not go to trial was because they had reached a business decision that it would be cheaper to not take it further, whether there was merit to the case or not. REPRESENTATIVE BERKOWITZ advised members that normally there was a time-line on a court case, and he could not see any time-line in the mediation process. He stated that if one of the concerns was that the process would be drawn out, that might be addressed in some manner. MR. MAYNARD stated that the bill reflected that mediation would take place within a certain amount of time after the mandatory discovery process was completed. He added that that might be handled by regulation; however, thought it was included within the bill language. MR. LOGAN explained that the time-line language was not included in the bill, but according to the bill drafter, could be found in the Court Rules to the extent that there were time-lines and date triggers in Rule 100 Rule 26, and other Court Rules. REPRESENTATIVE BERKOWITZ advised members that was one of the problems, as he saw it, that you could protract those proceedings and essentially bankrupt either the plaintiff or the defendant, which would not expedite the process at all. REPRESENTATIVE JAMES pointed out that she was comfortable that the court would have time-lines on a mediation procedure and did not feel it opened up any kind of door. REPRESENTATIVE BERKOWITZ wanted to review Court Rule 26. CHAIRMAN GREEN called a brief at-ease at 2:25 p.m., and reconvened the meeting at 2:28 p.m. REPRESENTATIVE BERKOWITZ stated that after reading Rule 26, his concern was satisfied. REPRESENTATIVE BUNDE moved to report CSHB 10(L&C) out of committee with individual recommendations, and the attached zero fiscal note. There being no objection, CSHB 10(L&C) was reported out of committee.
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