Legislature(1995 - 1996)

04/09/1996 01:50 PM Senate FIN

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
txt
  CS FOR HOUSE BILL NO. 158(FIN) am(ct rls pfld)(efd fld)                      
                                                                               
       An Act relating to civil  actions; amending Alaska Rule                 
       of Civil Procedure 95.                                                  
                                                                               
  Co-chairman  Halford  directed that  SCS  CSHB 158  (Jud) be                 
  brought  back  before  committee  for  continued  review  of                 
  amendments.                                                                  
                                                                               
  Senator  Rieger  referenced  Amendment No.  7,  relating  to                 
  apportionment  of  fault,  and  reiterated  comments  at   a                 
  previous meeting which, he explained,  led him to decide not                 
  to offer the amendment.                                                      
                                                                               
  Senator Rieger  directed attention  to Amendment  No. 8  and                 
  explained that the issue of award  of attorney fees is often                 
  raised in  the offer of judgment process.   He noted that if                 
  the ultimate award is less than the offer of judgment, award                 
  of attorney fees  is against the plaintiff.  If the award is                 
                                                                               
                                                                               
  greater  than  the offer,  award  is against  the defendant.                 
  Complications occur surrounding application of interest when                 
  there is a substantial time span between the offer and final                 
  judgment.   Amendment No. 8 would require  comparison of the                 
  offer to the  judgment "at  a like time."   The court  would                 
  thus disregard  accrual of  prejudgment  interest after  the                 
  time the offer is  made.  Senator Rieger MOVED  for adoption                 
  of  the  amendment.    No   objection  having  been  raised,                 
  Amendment No. 8 was ADOPTED.                                                 
                                                                               
  Senator Rieger  explained that  Amendment No.  9 relates  to                 
  situations  in which there  are two or  more defendants, and                 
  one defendant offers  to settle but  the other or others  do                 
  not.    As  written,  the  bill  excludes  ability  for  one                 
  defendant to settle, even if his or her offer is reasonable.                 
  The amendment would delete that  provision.  DANIELLA LOPER,                 
  aide to Representative  Porter, came before committee.   She                 
  said the sponsor  did not concur in addition  of problematic                 
  language by Senate  Judiciary.  She concurred in removal per                 
  Amendment No. 9.   Senator  Rieger MOVED for  adoption.   No                 
  objection having been raised, Amendment No. 9 was ADOPTED.                   
                                                                               
  Senator Rieger explained that  language at Page 7, line  10,                 
  allows parties to  enter into a written  agreement to submit                 
  to arbitration.                                                              
  Present wording speaks to agreement "before the action."  He                 
  said he saw  no reason  why agreement could  not be  entered                 
  "after"  commencing the action.   Amendment No. 10 adds that                 
  option.   Senator Rieger MOVED  for adoption.   No objection                 
  having been raised, Amendment No. 10 was ADOPTED.                            
                                                                               
  Senator Rieger noted that  Amendment No. 11 also relates  to                 
  arbitration.   Under the proposed  bill a list  of attorneys                 
  with at least five years of  civil practice experience would                 
  be  eligible  to serve  as  arbitrators.   It  is  not clear                 
  whether  attorneys  with  that experience  might,  for other                 
  reasons,  not  be  qualified.    Language  in  the  proposed                 
  amendment  would   allow  the   court  to   flesh  out   the                 
  qualifications for those who agree  to serve as arbitrators.                 
  Co-chairman  Halford called  for objections.   No  objection                 
  having been raised, Amendment No. 11 was ADOPTED.                            
                                                                               
  Senator Rieger questioned  the sentence at  Page 8, line  7.                 
  It   refers  to  documents   that  would  be  "presumptively                 
  admissible."    Amendment  No. 12  says  that  the foregoing                 
  language may not be construed to require that the arbitrator                 
  use or rely  on documents when there is  reason to doubt the                 
  authenticity  or  accuracy of  the  documents.   Co-chairman                 
  Halford called  for objections.   No  objection having  been                 
  raised, Amendment No. 12 was ADOPTED.                                        
                                                                               
  Senator  Rieger  said that  while  Amendment No.  13 appears                 
   lengthy, it is not.  He directed attention to Page 18, lines                
  26  and  27, and  noted  language  specifying  that a  claim                 
                                                                               
                                                                               
  subject  to arbitration is not  subject to offer of judgment                 
  provisions.    He suggested  that  while  it should  not  be                 
  subject  to  the  portion  of  those  provisions  within  AS                 
  09.30.065(b), other portions of the provisions could  apply.                 
  Amendment No.  13 thus divides  09.30.065 into part  (a) and                 
  part (b).   Daniella  Loper directed  attention to  the last                 
  sentence  of  subsection  (b)  and suggested  that  language                 
  relating  to two  or  more defendants  be deleted.   Senator                 
  Rieger  concurred,  saying  the  language  was  incorporated                 
  within an  earlier adopted  amendment.   Co-chairman Halford                 
  advised  that  deletion  would  be  considered  a  technical                 
  amendment to Amendment No. 13  and would be adopted  without                 
  objection.  Senator  Rieger MOVED for adoption  of Amendment                 
  No.  13,  as  amended.   No  objection  having  been raised,                 
  Amendment No. 13 was ADOPTED as amended.                                     
                                                                               
  Senator Rieger next directed attention  to Amendment No. 14.                 
  He pointed to Page 9, line 22, as  well as several instances                 
  on Page 10 and noted reference to "non-employees."  Language                 
  within the bill  speaks to "staff"  and does not read  well.                 
  Amendment No. 14 deletes language that makes  a contractor a                 
  member of  the hospital  staff.   No  objection having  been                 
  raised, Amendment No. 14 was ADOPTED.                                        
                                                                               
  Senator Rieger directed attention  to Amendment No. 15.   He                 
  further referenced language at Page 12, lines 12 through 18,                 
  requiring  that rates decrease by 10 percent by December 31,                 
  1999.    The amendment  would  delete that  provision.   Co-                 
  chairman Halford called for  objections.  Co-chairman  Frank                 
  OBJECTED and  asked  if the  rationale was  a reluctance  to                 
  dictate pricing  in a piece of legislation.   Senator Rieger                 
  acknowledged that to be  the case, saying the provision  was                 
  contrary  to  free  market principles.    Co-chairman  Frank                 
  removed his objection.  In the absence of further objection,                 
  Amendment No. 15 was ADOPTED.                                                
                                                                               
  Senator Rieger  directed attention  to Page  7, line 8,  and                 
  referenced testimony from court system counsel that language                 
  relating to mandatory arbitration might eliminate ability to                 
  "go to small claims court."   The Senator suggested that the                 
  following  language be  added  at  Page  7,  line  8  (after                 
  $100,000 and before the semicolon):                                          
                                                                               
            or is eligible for small claims court                              
                                                                               
  CHRIS  CHRISTENSEN,  General Counsel,  Alaska  Court System,                 
  came before committee  voicing his belief that  the proposed                 
  language "would work."  As an alternative,  a new subsection                 
  (H) could be added at Page 7, line  19, to say:  "is a small                 
  claim  under  AS  22.15.040."    Senator  Rieger  MOVED  for                 
  adoption of the  language he  proposed, above, as  Amendment                 
  No. 16.  No  objection having been raised, Amendment  No. 16                 
  was ADOPTED.                                                                 
                                                                               
                                                                               
  Co-chairman Frank referenced a $867.0 fiscal note associated                 
  with arbitration  provisions within  the bill  and asked  if                 
  there would be an offsetting  reduction in litigation.   Mr.                 
  Christensen said  that the bulk of the  fiscal note reflects                 
  the cost of providing arbitration services for litigants who                 
  are legally indigent.   At the  present time, 95 percent  of                 
  all tort cases settle  without going to trial.   These cases                 
  are not costly to the system.                                                
                                                                               
  Mr.  Christensen  further  commented  on  effective  use  of                 
  arbitration in  contract and  family law  cases.   The court                 
  system does not  believe it is  effective in a typical  tort                 
  case.   Parties can presently engage in  arbitration if they                 
  wish to.  Virtually none of them do.                                         
                                                                               
  END:      SFC-96, #70, Side 1                                                
  BEGIN:    SFC-96, #70, Side 2                                                
                                                                               
  In response to a question from Co-chairman Halford asking if                 
  the  state  is  required  to  provide  counsel  to  indigent                 
  individuals   in   both  criminal   and  civil   cases,  Mr.                 
  Christensen explained that if                                                
  the law says an individual cannot  exercise his or her right                 
  to bring a case before a judge and a jury until "they go  to                 
  arbitration,"  the  state would  have  the duty  to  pay for                 
  arbitration if a person could not afford it.                                 
                                                                               
  Co-chairman Halford questioned whether mandatory arbitration                 
  was worth the $867.0.   Co-chairman Frank noted that Senator                 
  Taylor  included  the  provision when  the  bill  was before                 
  Senate Judiciary.   Senator Rieger voiced  his understanding                 
  that  when  the court  system  is budgetarily  squeezed, the                 
  civil liability  system suffers.   Part  of the  fiscal note                 
  probably  represents  "allowing people  to  get their  cases                 
  heard that, right now, are  languishing without ever getting                 
  to court," because  of time  delays in getting  them on  the                 
  docket.                                                                      
                                                                               
  Discussion of alternatives to mandatory arbitration followed                 
  among the Co-chairmen and Mr. Christensen.                                   
                                                                               
  Additional comments  followed by Mr.  Christensen concerning                 
  how  fiscal  note numbers  were developed  and the  share of                 
  arbitration  costs  to be  paid by  the  state on  behalf of                 
  indigent individuals.  Senator Rieger noted that fiscal note                 
  funding would  make the  court system  more accessible.   He                 
  suggested that  is a  different issue  than paying  for free                 
  counsel.                                                                     
                                                                               
  Co-chairman   Halford   directed   attention  to   mandatory                 
  arbitration language at  page 7, line 5,  and suggested that                 
  addition of "if requested  by one of the  parties" following                 
  the word "arbitration" would lessen impact.  Mr. Christensen                 
  advised  that he could not say what percentage of plaintiffs                 
                                                                               
                                                                               
  or defendants would  request arbitration.  If the judge were                 
  given the discretion  to decide  whether or not  arbitration                 
  would  be  valuable,  the  impact  on  the  state  would  be                 
  relatively minimal compared  to the  proposed bill.   Judges                 
  would likely not order  it in cases where the  parties could                 
  not afford the process.                                                      
                                                                               
  Mr. Christensen told members  that arbitrators in  Anchorage                 
  have indicated that the form of arbitration contained within                 
  the bill is  "about as expensive as arbitration can get."  A                 
  retired  judge  or  attorney is  needed  to  draft discovery                 
  orders and findings of fact and statements of law at the end                 
  of the process.  Co-chairman Halford voiced a preference for                 
  removing mandatory arbitration  from the bill.   Co-chairman                 
  Frank concurred.  Senator Rieger  expressed a preference for                 
  retaining  the provision but  preventing the  most expensive                 
  form.                                                                        
                                                                               
  Senator Rieger MOVED for passage of  SCS CSHB 158 (Fin) with                 
  individual recommendation and accompanying fiscal notes.  No                 
  objection  having  been  raised,  SCS  CSHB  158  (Fin)  was                 
  REPORTED OUT of committee  with a $0.8 fiscal note  from the                 
  Dept. of Commerce  and Economic Development; and  zero notes                 
  from  the Dept.  of Law,  Dept. of  Administration, and  the                 
  Court System.   (The Court  System note  indicated a  $862.0                 
  cost commencing  in 2001.)   All members present  signed the                 
  committee report with a "do pass" recommendation.                            
                                                                               

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