Legislature(1997 - 1998)
02/21/1997 01:04 PM House JUD
| Audio | Topic |
|---|
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
HOUSE JUDICIARY STANDING COMMITTEE
February 21, 1997
1:04 p.m.
MEMBERS PRESENT
Representative Joe Green, Chairman
Representative Con Bunde, Vice Chairman
Representative Brian Porter
Representative Jeannette James
Representative Norman Rokeberg
Representative Eric Croft
Representative Ethan Berkowitz
MEMBERS ABSENT
All members were present
COMMITTEE CALENDAR
* SPONSOR SUBSTITUTE FOR HOUSE BILL NO. 58
"An Act relating to civil actions; relating to independent counsel
provided under an insurance policy; relating to attorney fees;
amending Rules 16.1, 41, 49, 58, 68, 72.1, 82, and 95, Alaska Rules
of Civil Procedure; amending Rule 702, Alaska Rules of Evidence;
amending Rule 511, Alaska Rules of Appellate Procedure; and
providing for an effective date."
- HEARD AND HELD
Governor's Appointments: Violent Crimes Compensation Board
- REMOVED FROM AGENDA
(* First public hearing)
PREVIOUS ACTION
BILL: HB 58
SHORT TITLE: CIVIL ACTIONS & ATTY PROVIDED BY INS CO.
SPONSOR(S): REPRESENTATIVE(S) PORTER, Cowdery
JRN-DATE JRN-PG ACTION
01/13/97 43 (H) READ THE FIRST TIME - REFERRAL(S)
01/13/97 43 (H) JUDICIARY, FINANCE
01/16/97 95 (H) COSPONSOR(S): COWDERY
02/17/97 373 (H) SPONSOR SUBSTITUTE INTRODUCED-
REFERRALS
02/17/97 374 (H) JUDICIARY, FINANCE
02/19/97 (H) JUD AT 1:00 PM CAPITOL 120
02/19/97 (H) MINUTE(JUD)
02/21/97 (H) JUD AT 1:00 PM CAPITOL 120
WITNESS REGISTER
JIM SOURANT, Legislative Assistant
to Representative Brian Porter
Alaska State Legislature
Capitol Building, Room 216
Juneau, Alaska 99801
Telephone: (907) 465-4930
POSITION STATEMENT: Answered questions regarding SSHB 58.
THOMAS B. STEWART, Judge (Retired)
Alaska Superior Court
P.O. Box 114100
Juneau, Alaska 99811-4100
Telephone: (907) 463-4741
POSITION STATEMENT: Testified on behalf of Governor's Advisory
Task Force on Civil Justice Reform regarding
SSHB 58.
DAVID A. McGUIRE, M.D., Representative
Alaska Liability Reform Group
4048 Laurel Street, Suite 202
Anchorage, Alaska 99508
Telephone: (907) 562-4142
POSITION STATEMENT: Testified on SSHB 58.
JOEL BLATCHFORD
1983 Waldron Drive
Anchorage, Alaska 99507
Telephone: (907) 563-3743
POSITION STATEMENT: Testified on SSHB 58.
CHERI SHAW, Executive Director
Cordova District Fishermen United; and
Chair, Tort Reform Committee
United Fishermen of Alaska
P.O. Box 939
Cordova, Alaska 99574
Telephone: (907) 424-3447
POSITION STATEMENT: Testified in opposition to SSHB 58; provided
suggestions.
DALE BONDURANT
HC 1, Box 1197
Soldotna, Alaska 99669
Telephone: (907) 262-0818
POSITION STATEMENT: Testified in opposition to SSHB 58.
PAUL SWEET
P.O. Box 1562
Palmer, Alaska 99645
Telephone: (907) 745-2242
POSITION STATEMENT: Testified in opposition to SSHB 58.
STEVE CONN, Director
Alaska Public Interest Research Group
P.O. Box 101093
Anchorage, Alaska 99510
Telephone: (907) 278-3661
POSITION STATEMENT: Testified on SSHB 58.
BONNIE NELSON
20615 White Birch Road
Chugiak, Alaska 99567
Telephone: (907) 688-3017
POSITION STATEMENT: Testified in opposition to portions of SSHB
58.
ROSS MULLINS
P.O. Box 436
Cordova, Alaska 99574
Telephone: (907) 424-3664
POSITION STATEMENT: Testified on SSHB 58.
DARYL NELSON
4334 Vance Drive, B-5
Anchorage, Alaska 99508
Telephone: (907) 333-9713
POSITION STATEMENT: Testified in opposition to SSHB 58.
ERIC YOULE, Executive Director
Alaska Rural Electric Cooperative Association
703 West Tudor Road, Number 200
Anchorage, Alaska 99503
Telephone: (907) 561-6103
POSITION STATEMENT: Testified on SSHB 58.
JEFFREY W. BUSH, Deputy Commissioner
Office of the Commissioner
Department of Commerce and Economic Development
P.O. Box 110900
Juneau, Alaska 99811-0800
Telephone: (907) 465-2500
POSITION STATEMENT: Provided Administration's position on SSHB 58.
ACTION NARRATIVE
TAPE 97-23, SIDE A
Number 0020
CHAIRMAN JOE GREEN called the House Judiciary Standing Committee to
order at 1:04 p.m. Members present at the call to order were
Representatives Green, Bunde, Porter, Croft and Berkowitz.
Chairman Green noted that Representatives James and Rokeberg would
be late; they arrived at 1:56 p.m. and 2:00 p.m., respectively.
SSHB 58 - CIVIL ACTIONS & ATTY PROVIDED BY INS CO.
The only order of business was Sponsor Substitute for House Bill
No. 58, "An Act relating to civil actions; relating to independent
counsel provided under an insurance policy; relating to attorney
fees; amending Rules 16.1, 41, 49, 58, 68, 72.1, 82, and 95, Alaska
Rules of Civil Procedure; amending Rule 702, Alaska Rules of
Evidence; amending Rule 511, Alaska Rules of Appellate Procedure;
and providing for an effective date."
CHAIRMAN GREEN said the sponsor would explain the bill and
questions for clarity would be addressed. However, there would be
no debate on substantive issues. Public testimony would be taken
that day and Monday, February 24. The committee would then debate
and discuss SSHB 58 on Wednesday, February 26.
Number 0221
REPRESENTATIVE BRIAN PORTER, sponsor of SSHB 58, read from Section
1, subsection (1), which set forth the legislative intent:
"encourage the efficiency of the civil justice system by
discouraging frivolous litigation and by decreasing the amount,
cost, and complexity of litigation without diminishing the
protection of innocent Alaskans' rights to reasonable, but not
excessive, compensation for tortious injuries caused by others".
He said that was the legislation in a nutshell.
REPRESENTATIVE PORTER said Section 2 was not substantive but a
minor consistency change. A change existed in Section 23
reflecting the thought of the Governor's Advisory Task Force on
civil justice reform, as well as the previous year's bill, that the
rate of prejudgment interest should more adequately reflect the
marketplace instead of being a fixed rate, which was currently 10.5
percent. The provision in Section 23 provided for a floating rate.
Section 2 was a consistency change to leave 10.5 percent interest
in a section of the banking code that was referenced to this
section, he said. The banking statute was being left in place,
with this being a conformity change to what was done in Title 9.
Number 0439
REPRESENTATIVE PORTER said the next sections dealt with the statute
of repose and the statute of limitations. In layman's terms, a
statute of repose is an absolute outer limit on when a case can be
brought, based on the length of time since the action took place
that supposedly caused injury or damage. SSHB 58 proposed an
eight-year statute of repose. Within that eight years, varying
statutes of limitations shortened the time period allowed if the
plaintiff knew or should have known that the damage or injury had
taken place. The bill suggested what those limits should be in
several areas.
Number 0615
REPRESENTATIVE PORTER said Section 3 reflected suggestions from the
task force. It addressed a law that had contained a six-year
statute of limitations on several provisions. Section 3 specified
what would retain that six-year statute of limitations. "And
further limitations will be shown from that law that -- as it had
existed in subsequent sections," he added.
REPRESENTATIVE PORTER referred to Section 4. Again from the task
force, it imposed a three-year statute of limitations, reduced from
six years, on contract actions.
Number 0666
REPRESENTATIVE ERIC CROFT said some task force conclusions were
compromises between doing nothing and having more extreme
provisions. He asked whether Representative Porter intended to
include the compromises as well as the original legislation.
REPRESENTATIVE PORTER said he was on the subcommittee that dealt
with the statute of limitations issue. He believed the provisions
did not result from discussion of "outer limits" or a "compromise
to the middle." He said it was a suggestion by a subcommittee
member that was discussed, adopted, and then subsequently adopted
by the entire task force.
Number 0764
REPRESENTATIVE CROFT asked whether Representative Porter's
intention on the statute of repose was to keep the discovery rule
intact. For example, if someone had no way of knowing a harm had
been done until nine years had passed, would that be barred? Was
there any relief for someone who, through no fault of their own,
did not know?
REPRESENTATIVE PORTER said he hadn't yet explained the statute of
repose. However, to that specific question, there certainly could
be a situation where someone did not have, for whatever reason,
knowledge of an injury or a damage. If the statute of repose had
been completed, that would be a bar to filing a case. However,
there were exceptions where the statute of repose would not apply.
He offered to go through those.
CHAIRMAN GREEN suggested he address them as they came up, but only
for clarification.
Number 0846
REPRESENTATIVE PORTER pointed out the statute of repose is similar
to the hearsay rule in that the meat of the law is in the
exceptions. He listed exceptions to the eight-year statute of
repose from Section 5(2)(b)(1): (A) any prolonged exposure to
hazardous waste; (B) an intentional act or gross negligence; (C)
fraud or fraudulent misrepresentation; (D) breach of an express
warranty or a guarantee.
REPRESENTATIVE PORTER said one criticism of a statute of repose is
the supposition that people wanting to provide a longer period of
time were seemingly barred from doing so. That is not the case, he
said. Citing the example of a school roof falling in, he said no
such cases on record had occurred within the allotted time period.
However, nobody constructing a building was barred from having a
contract with the contractor for a longer period of statute of
repose if both parties agreed to it.
REPRESENTATIVE PORTER believed one of the biggest exceptions was
Section 5(2)(b)(1)(E), a defective product. There had been much
testimony over the last four years about "some of the more salient
products that have come to light after an eight-year period." He
cited Thalidomide as an example. Although one could argue for a
statute of repose in those cases, an accommodation and compromise
existed in this legislation. "We're saying, `Okay, we're not
going to fight that battle today,' he said. "Quite frankly, I
don't intend to fight it ever, but if someone wants to, welcome."
Number 1050
REPRESENTATIVE PORTER said another cause for exception would be if
a defendant had intentionally tried to conceal any element that
would go to establish the occurrence of the injury or negligence.
REPRESENTATIVE PORTER referred to Section 5(2)(c), which he
described as somewhat unusual, a sticking point for which
accommodation was made along the way. "The old sponge left in the
body after surgery" kept coming up, he said. "We toll the statute
of repose. Tolling is a nice legal word for meaning that it's null
and void, held in abeyance until this thing is discovered, that if
there is a foreign body that has no therapeutic or diagnostic
purpose found ... in a person's body, that that is an exception to
the statute of repose."
Number 1132
REPRESENTATIVE ETHAN BERKOWITZ asked whether hazardous waste had a
legal definition or was addressed by a body of law.
REPRESENTATIVE PORTER replied, "It is an attempt to address another
concern that was raised of the more typical kinds of `someone's
property leached chemicals into my property and I didn't know about
it,' those kinds of things." He said if someone had a better
definition, he would certainly look at it.
Number 1184
REPRESENTATIVE BERKOWITZ asked whether there was a reason for using
the term "waste" instead of "material."
REPRESENTATIVE PORTER said there may have been at the time;
however, he could not recall one.
REPRESENTATIVE BERKOWITZ asked whether a person committing a
criminal act would fall outside the statute of repose.
REPRESENTATIVE PORTER said, "The exception regarding an intentional
act, would, I'm sure, bring that outside."
REPRESENTATIVE BERKOWITZ asked, "That would include even if the
criminal statute of limitations precluded a criminal action?"
REPRESENTATIVE PORTER said yes. The statute of limitations for
prosecution would not apply to a civil case.
Number 1235
REPRESENTATIVE BERKOWITZ asked whether defective products included
products involving "intellectual property" such as an idea.
REPRESENTATIVE PORTER replied, "Well, the definition, of course, is
an object that has intrinsic value, is capable of delivery as an
assembled whole or as a component part and is introduced into trade
or commerce. I don't think thoughts would fall into that
definition."
Number 1270
REPRESENTATIVE BERKOWITZ asked, "If there's an indication of
intentional concealment, the tolling period begins at what point?"
REPRESENTATIVE PORTER replied, "When the injury, damage, whatever
is discovered, or should have been discovered, and that's put in
there, obviously, so that you can't just say, `I didn't know' and
(indisc.) to prove what's in a person's head. Then the two-year
statute of limitations would start accruing, but the statute of
repose, the eight-year limitation, would be tolled, so that if this
discovery were made ten years after the fact, and it was as a
result of an intentional concealment or fraud or something like
that, then you would have two years to get it in."
Number 1308
REPRESENTATIVE CROFT asked, "The statutes of limitations don't
mention it, but do they still contain the discovery rule?"
REPRESENTATIVE PORTER said yes. The definition of "from the time
of accrual" was not currently in statute, but it fairly reflected
the case law. He explained that the statute of limitations begins
from the time a person knew or should have known, which was
basically the time of accrual.
REPRESENTATIVE CROFT said, "So the statute of limitations
provisions didn't mean any change in the discovery rule."
REPRESENTATIVE PORTER concurred.
REPRESENTATIVE CROFT continued, "But the statute of repose
provisions do. I mean, that's the point of a statute of repose."
REPRESENTATIVE PORTER replied, "By definition; that's correct."
REPRESENTATIVE CROFT said, "And my original question from before
was: Something that someone has no way of learning, if it doesn't
fall into these exceptions, would be barred after eight years?"
REPRESENTATIVE PORTER said that was correct.
Number 1382
REPRESENTATIVE PORTER referred to Section 6, the limitation of
actions against health care providers. He said it provides an
exception to the statute of limitations for children from zero to
six years old. He explained, "It, by its first statement,
notwithstanding the disability of a minor, shortens an exception
that currently exists in law that provides ... that the statute of
repose, if you will, is tolled for minors, for incompetent persons,
and in cases of adult recollection of child abuse when the memory
was suppressed and was later recalled as an adult."
REPRESENTATIVE PORTER said those three exceptions to the statute of
repose were existing law. In this statute, the exception for
minors was being changed from eighteen years to eight years of age.
As a result, the statute of repose would be in place for these
kinds of cases for injuries to children up to six years of age,
such as at-birth injuries. "The statute of limitations is tolled,
but the statute of repose fits with this," he said.
Number 1470
REPRESENTATIVE CROFT asked whether there was a statute of repose
previously or simply a tolling of the statute of limitations up to
18 years, the age of majority.
REPRESENTATIVE PORTER indicated the statute of repose was
repeatedly in and out of the statutes, based on actions by the
legislature and the courts. He did not know when the exception for
the three kinds of cases was put into law. However, he said, it
would have stayed in effect "during this transition of up and down,
in and out, statutes of repose, anyway."
Number 1503
REPRESENTATIVE CROFT stated, "This has the same effect of the other
statute of repose, that if it doesn't fall within an exception, it
doesn't matter whether they knew or reasonably should have known of
their cause of action; it's an absolute bar."
REPRESENTATIVE PORTER replied, "It begs an editorial response, but
I will not make one." He referred to Section 7 and said it
"basically, again, confirms a reduction that is the final portion
of the section that I told you about where everything had had a
six-year, and again brings in the suggestions of the task force for
recovery of damages for personal property, that -- which sat at two
years instead of at six."
REPRESENTATIVE PORTER indicated Section 7 retained the language
regarding penalties and forfeitures to the state. Litigation had
occurred over "what should have been obvious" because the statutes
did not provide that an intentional act can be considered a tort.
This clarified that negligence or an intentional act can result in
a recognized claim for, and award of, civil damages.
Number 1598
REPRESENTATIVE PORTER said for the next section, it would benefit
nonlawyers to explain the kinds of damages that can be sought in
tort cases. He said a tort is a civil wrong that results in injury
or damage to someone's property or person as a result of an act
committed by, or an omission by, somebody else that was negligent,
grossly negligent or intentional. There are three areas of claims:
economic, noneconomic and punitive.
REPRESENTATIVE PORTER explained that economic damages resulting
from the action that caused damage or injury were meant to make the
plaintiff whole to the extent that, if the injury required medical
attention or other costs, economic damages would provide those
costs.
REPRESENTATIVE PORTER cited examples such as future medical costs,
assistive technology including in-home adjustments to accommodate
a wheelchair, retraining for new work and lost future wages.
Virtually any cost or reasonable projected cost accruing because of
the injury or property damage was included. He said, "There is no
limit in this bill, intended or actual, to economic damage
recoveries."
Number 1750
REPRESENTATIVE PORTER said noneconomic damages and punitive damages
were the areas in which SSHB 58 sought to place an "outer limit" or
cap. Noneconomic damages were those damages provided to compensate
for such things as pain and suffering, physical impairment or
disfigurement, loss of enjoyment of life or consortium, and other
nonpecuniary damage. Although certainly recognizable, real and
understandable, they were subjective and debatable.
REPRESENTATIVE PORTER said currently the law provided a cap of
$500,000 for noneconomic damages, with exceptions for serious
injury or disfigurement. However, there was no definition in the
law for those. He noted, ""Consequently, serious injury or
disfigurement is a pretty nebulous exception."
Number 1848
REPRESENTATIVE BERKOWITZ stated his understanding there was no cap
for serious physical injury.
REPRESENTATIVE PORTER said, "Right. Or disfigurement."
REPRESENTATIVE BERKOWITZ asked whether that included loss of a
limb.
REPRESENTATIVE PORTER said, "I'm sure that serious injury would
include loss of a limb. That's what we're suggesting in our
proposal." He noted that serious injury and disfigurement were
relative terms. He stated his intention of eliminating ambiguity.
Number 1895
REPRESENTATIVE BERKOWITZ referred to Section 8(c)(1), relating to
a person who became a hemiplegic, paraplegic or quadriplegic. He
asked whether those were not serious physical injuries for which
there should be no limits.
REPRESENTATIVE PORTER replied, "Well, we're saying that there
should be a limit for noneconomic damages. What we're providing in
Section 8 is limits to both areas of noneconomic damages. What
we're saying is the limit should be $300,000. But in the case of
serious physical injury, if you want to put it that way, we'll say
what serious physical injury is so there won't be any debate on it.
And we say that the cap on that should be $500,000." He indicated
that was a change from the current unlimited cap.
REPRESENTATIVE BERKOWITZ asked for clarification.
REPRESENTATIVE PORTER explained, "Existing law says that there is
a cap of $500,000 for noneconomic damages. But in those cases that
have serious injury or disfigurement, that cap is removed. ... What
we're suggesting is that there be a cap of $300,000 in, if you
will, less serious kinds of injuries, and that for the more serious
kinds of injuries - and we are providing, somewhat like the theory
of Worker's Comp, we're providing what we think very objectively
sets out what is a serious injury - but in those cases, the cap
moves only from $300 to $500 [thousand], not unlimited."
Number 2006
REPRESENTATIVE CON BUNDE asked whether there were instances where
damages would be unlimited.
REPRESENTATIVE PORTER said there was no limit proposed for economic
damages.
Number 2034
REPRESENTATIVE CROFT said, "This covers death. So it's a cap on
noneconomic damages for a wrongful death."
REPRESENTATIVE PORTER agreed.
REPRESENTATIVE CROFT asked, "What are the economic damages of
death?"
REPRESENTATIVE PORTER said the family of a person who was killed
could claim all of the things they had just discussed, including
medical and burial expenses as well as losses from a deceased
breadwinner's inability to earn a living. Any projected wages that
would have accrued to the family or that individual would still be
a viable claim under economic damages to that person's heirs and
dependents.
Number 2080
CHAIRMAN GREEN stated his belief that the discussion on the three
types of damages was worthwhile. He noted that SSHB 58 did not
cover criminal actions. He referred to the O.J. Simpson murder
case and said a civil action can be brought for the commission of
a criminal act. He asked Representative Porter whether that
possibility of a civil action still existed under the bill.
REPRESENTATIVE PORTER said, "Absolutely."
Number 2129
REPRESENTATIVE BERKOWITZ asked how many cases annually in Alaska
would exceed the cap and how many would "brush up against it."
REPRESENTATIVE PORTER said that problem was developed and defined
by the task force. He believed the Alaska Court System's best
estimate was that of all the cases filed, 95 percent settled prior
to trial. "The effect of the provisions of the law currently on
economic, noneconomic and punitive damages really can't be
determined from 95 percent of the cases because they're sealed,
closed settlements and are nonpublic," he explained.
REPRESENTATIVE PORTER said there was a section that provides that
basic data from the settlements, not names but information that
could reveal the effect of the law on the results of these cases,
would be furnished by the court to the Alaska Judicial Council.
That would be compiled so that in the future it could be determined
whether it was having the desired effect.
REPRESENTATIVE PORTER said within the information they obtained,
they looked at one year, which he believed was 1995, to examine the
5 percent of cases that actually went to trial. As he recalled it,
one in five had awards for noneconomic damages and one in twenty
had awards for punitive damages. He suggested asking task force
members about it. However, he did not recall whether or not they
had the information about the numbers that approached the proposed
caps.
Number 2248
CHAIRMAN GREEN advised that Art Snowden from the Alaska Court
System had made a presentation earlier that week to a joint
committee in the Senate, providing statistics on various cases. He
also noted that Chris Christensen, staff counsel for the court
system, was currently present.
REPRESENTATIVE BERKOWITZ said he could get that information.
Number 2267
REPRESENTATIVE PORTER said Section 9 dealt with punitive damages.
He believed it was established case law, at least stated by the
Alaska Supreme Court, that the intent of punitive damages was not
compensation to the plaintiff. Rather, it was to punish a
defendant whose behavior was so outrageous as to require sending a
message to the individual or company that the behavior should not
reoccur; it also deterred anyone in a similar position from doing
likewise.
REPRESENTATIVE PORTER said, "The language defining what the level
of evidence is, the kind of behavior is, is not in statute now but
is, we feel, and I don't think there's any argument, that malice or
conscious acts showing deliberate disregard of another person
basically is taken out of existing case law, where the Supreme
Court has indicated their thoughts about what constitutes that
level of behavior."
CHAIRMAN GREEN suggested the McDonalds case involving burns from
too-hot coffee would not fall under punitive damages.
REPRESENTATIVE PORTER replied, "Well, the McDonalds cup of coffee
was found to be in the punitive damage area."
CHAIRMAN GREEN asked, "But if this were to be enacted?"
REPRESENTATIVE PORTER replied, "It could be."
Number 2365
REPRESENTATIVE CROFT asked, "Are you intending a change in the law
or encapsulating the case law that's developed?"
REPRESENTATIVE PORTER said it should not represent a change but
just encapsulate case law.
Number 2372
REPRESENTATIVE BERKOWITZ asked whether "person" meant legal
persons, which would include corporations.
REPRESENTATIVE PORTER said he understood that punitive damages
could be assessed against a corporation.
REPRESENTATIVE BERKOWITZ said, "By using the term `person,' there
are corporate entities such as partnerships that don't have legal
personage, I guess that's the correct terminology. Would these
fall outside the reach of this?"
REPRESENTATIVE PORTER said the word "person" in the definition was
meant to describe the plaintiff, the injured party.
Number 2398
REPRESENTATIVE BERKOWITZ read from page 6, line 1, "by the person
from whom the punitive damages are sought."
REPRESENTATIVE PORTER said "person" in that context would certainly
mean the entity as well as the person. He said Section 10 went on
to establish the cap on punitive damages. Currently, there was no
cap. "This provides that the cap on punitive damages is $300,000
or three times compensatory damages, whichever is greater, so that
in a very small type of claim, where a person's actual loss
amounted to $1,000 and there was an additional award of noneconomic
damages of $9,000, the total compensation would be $10,000. Three
times that would be 30 [thousand dollars], so that would not be the
limit; the limit would be $300,000. In cases where total
compensatory damages, which is the sum of economic and noneconomic
damages, when it's substantially higher than that, then the cap
would be three times that."
REPRESENTATIVE PORTER noted the biggest punitive damages case in
recent memory in Alaska involved the Exxon Valdez oil spill. "It
was in the federal courts and this law does not affect the federal
jurisdiction," he said. "It was actually maritime, which even
further isolates it from our laws." He said had that whole case
unfolded under this law in state court, the award would still have
been capable of punitive damages.
TAPE 97-23, SIDE B
Number 0001
REPRESENTATIVE PORTER referred to expansion of the limit of
$300,000 or three times compensatory damages. He said, "We did
this because, again, we tried to look at the work of the task
force, recognize some of the philosophies that it incorporated, and
to the extent that, in the opinion of myself and many others that
are interested in tort reform, did not severely compromise the
total package of the bill that we feel is necessary to be able to
achieve the goals of reduced costs and insurance."
REPRESENTATIVE PORTER stated, "So to that end, this is a narrow
exception, admittedly, that would provide four times compensatory
damages or $600,000 in those cases where the wrongful conduct, or
the omission, ... occurred in the activity of a commercial
enterprise, and that the likelihood of death or serious bodily
injury from this activity was previously known by the persons
responsible, and that it continued in face of actual knowledge that
their behavior or their omission actually was going to result in
more serious physical injury or death. I have not specifically
read the case, but it's my understanding that that basically was
what was proven in the Ford Pinto case."
Number 0090
REPRESENTATIVE CROFT referred to Section 10 and said, "You
mentioned federal jurisdiction. This would still limit damages;
all of the provisions of this would still apply in any diversity
action in federal court."
REPRESENTATIVE PORTER deferred to Jim Sourant.
JIM SOURANT, Legislative Assistant to Representative Brian Porter,
noted that he is a former federal law clerk and said the answer is
yes. "In a federal diversity case, the federal courts look to the
substantive law of the state," he said. In this case, the federal
court would definitely look to this law.
Number 0133
REPRESENTATIVE CROFT commented that he had been a federal law clerk
too. He said to Representative Porter, "You mention the goals of
punitive damage is send a message, deter others, and you mention
the Pinto case. And you chose a method here. How do we know this
is enough to send a message? I'll get a message if somebody fines
me $10,000; the Ford [company] may not."
CHAIRMAN GREEN suggested the question invited debate and was not
solely for clarification. He ruled it out of order.
REPRESENTATIVE PORTER indicated it would be discussed later.
Number 0155
REPRESENTATIVE BERKOWITZ asked, "How many cases, going back to
1995, actually had punitive damages?"
REPRESENTATIVE PORTER said he could not remember the total number
of cases pulled to represent that 5 percent of the 1995 cases.
"The statistic that I'm recalling is that one in twenty of them had
punitive damage awards," he said.
REPRESENTATIVE BERKOWITZ said it was "5 percent of 5 percent."
REPRESENTATIVE PORTER said the data collection for settlements was
aimed at determining what effect on settled awards the claim of
punitive damages had.
REPRESENTATIVE BERKOWITZ asked, "How many of those punitive damage
awards brushed up against the limits here?"
REPRESENTATIVE PORTER said, "Again, I don't know."
REPRESENTATIVE BERKOWITZ asked where this information was
contained.
REPRESENTATIVE PORTER said, "If it exists, it's contained in the
research that was done by the staff to the task force ... and that
was done by the judicial council. And as I say, I don't remember
whether they gathered that particular information or not."
Number 0218
REPRESENTATIVE BERKOWITZ said, "This question of diversity. If
there were to be another Exxon Valdez-type case, would ...
punitives be affected?"
REPRESENTATIVE PORTER said he had heard this debated. Because the
Exxon Valdez incident occurred on the high seas, it was a case that
brought in the federal Maritime Act. The likelihood of it being
diverted to state court was remote.
REPRESENTATIVE GREEN noted that Representative James had joined the
meeting.
Number 0266
REPRESENTATIVE PORTER referred to Section 11. He said periodic
payments begin after a judgment is in and an award has been made
that takes into account, for example, future earnings. He
explained, "Periodic payments provide the principle that the
compensation of future earnings might occur over a period of years
so as to more closely represent the earnings as they would have
come when they were awarded." Representative Porter said the
substantive change was allowing either the defendant or the
plaintiff to elect for periodic payments, as opposed to existing
law, which only allowed the plaintiff to make this election.
REPRESENTATIVE PORTER said SSHB 58 also provides that the future
earnings would be reduced by the amount of income tax that would
have accrued against these earnings at the rate that exists at the
time of the judgment. He explained, "Currently, that reduction is
not made, and it is felt [it] represents compensation that this
person would not have received had they not been injured and worked
and received this money as wages." He said it also provided for
adjustments when changes occurred to the Internal Revenue Service
(IRS) code.
Number 0388
CHAIRMAN GREEN responded, "That would apply as our income tax rates
... change, as they have in the past. This type of payment would
float with that. What about a single payment? I guess it's not a
perfect world. You'd do that based on the current income tax rate,
and would that be reduced from single payment?"
REPRESENTATIVE PORTER said there was no adjustment suggested, or in
the law, for a bulk payment. Quite a bit of a bulk payment would
be in the areas of economic and noneconomic awards. He believed
those two categories, except for wages, were not taxed. He said,
"The medical compensation, the noneconomic damages are not taxed
now."
REPRESENTATIVE BERKOWITZ asked who would calculate the amount of
tax that would have applied.
REPRESENTATIVE PORTER replied that it would probably be an
agreement between the parties. He said, "I mean, the rates
themselves are the rates that are in effect at the time of the
judgment; so that's pretty straight-forward. What the level of
compensation was going to be, or was projected to be, if the two
parties couldn't agree on that would be a decision for the
(indisc.)."
Number 0540
REPRESENTATIVE CROFT said, "Assuming the entire award is taxable
... and assuming it's all done in a lump sum, they're going to have
to pay taxes on it. ... If we reduce the award by an estimated 15
percent tax, do they then pay 15 percent on the remainder? ... Or
does the defendant give it to the IRS? Assuming an entirely
taxable award, what is the intent?"
REPRESENTATIVE PORTER said, "Well, I think that that's the problem.
I don't think that's a good assumption. Most of that portion of an
award in a lump-sum award is not taxable. Very little of it is.
So to the extent that that is, we're just saying, `Okay.' But it
is very clear, on long, extended future-earnings awards, that it is
a windfall, if you will, to receive, if it's projected that you
were supposed to make $50,000 a year for the next 30 years, you
would have paid whatever tax on that amount of money for that whole
period of time. Currently, ... when you receive a future-wage
judgment, that is based on the total amount that you would have
earned, and there is no deduction for the amount of taxes that you
would have paid."
Number 0540
REPRESENTATIVE CROFT said the point was well-taken that most of a
judgment is noneconomic and therefore not taxable. "So just taking
the part that is taxable, if I say you would have made $100,000 a
year, and then the death, you're making zero, and so under the old
rule, I'd give you $100,000 a year. Under this rule, I'd reduce it
by the estimated taxes. My understanding is, if it would have been
a taxable thing, a wage, that person is going to have to pay the
tax. So if I give them the $100,000, that does appear like a
windfall, but then they pay taxes on that portion." He suggested
that was being taxed twice.
Number 0575
REPRESENTATIVE PORTER said, "I believe the answer to the question
is that that person would not have to pay the tax. That's where
the windfall comes in, future economic ...."
REPRESENTATIVE CROFT said that was not his understanding but he
would clarify it.
Number 0591
REPRESENTATIVE BERKOWITZ said, "Say I owe you $100. You'd pay $20
on that in taxes. I would pay you $80 under this arrangement?"
REPRESENTATIVE PORTER replied, "Well, under this arrangement, if
this was something that you were going to pay me over a long period
of time, I would say yes, the theory being that under existing law,
because of the nature of the payment, I would not have to pay tax
on it. So if you owed me that amount of money, you could get away
with paying me less than what I would have earned because actually
the only thing that I would have in my pocket, if I were working,
would be the -- using your, say $100 and deduct $10, okay? If
nothing had happened to me and I would have had this income over
the next ten years, my actual net income would have been $90 a
year. If the amount of gross pay that I receive is the $100, right
now the courts are awarding future economic damages in the area of
$100, because that's my gross."
REPRESENTATIVE PORTER said under current IRS law, because it is a
future-economic-damage award from this kind of case, it would not
be taxable. "But to make me whole, really, would only require $90
a year." Under SSHB 58, a defendant would pay the amount required
to make the plaintiff whole.
Number 0704
REPRESENTATIVE BERKOWITZ asked, "And so I'm paying less than the
compensatories I owe you, and the IRS is the one that gets cut out
of the loop?"
REPRESENTATIVE PORTER replied, "For the specific future earnings
section of all of these potential claims, yes. IRS isn't out of
the loop because they wouldn't have taxed it in the first place."
REPRESENTATIVE BERKOWITZ said, "I'll come talk to you about this."
CHAIRMAN GREEN noted that Representative Rokeberg had joined the
meeting.
Number 0710
REPRESENTATIVE PORTER said Section 12 specifically provides that
either party can select periodic payments. He said if the
plaintiff is represented by an attorney on a contingent-fee basis,
it provides that the "contingent fee is reduced, if it's required,
to present value and paid, so that the remainder, then, is put on
periodic payment."
Number 0773
REPRESENTATIVE BUNDE asked, "But if the attorney wanted to stay
part of the periodic pay-out, ... would they be allowed or are they
precluded from that?"
REPRESENTATIVE PORTER said he presumed they would be allowed, but
he did not think that would happen. He did not believe there was
a prohibition. He said a settlement was basically either
structured or an annuity. One concern in these settlements was
what guarantee existed that the money would be there. Therefore,
the court was required to make certain there was security in the
establishment of these payments.
REPRESENTATIVE PORTER said in Section 13, there was an exception
from posting security for the state, self-insured municipalities,
and insurance companies whose rated financial strength was in the
highest two categories, as measured by any two nationally
recognized independent rating services. Whether for a structured
settlement or annuity, the same criteria were used for a secure
annuity.
Number 0902
REPRESENTATIVE BERKOWITZ asked, "Section 12 is done at the request
of either party?"
REPRESENTATIVE PORTER said yes.
REPRESENTATIVE BERKOWITZ said, "So even if the injured party wanted
a lump sum, the ...?
Number 0914
REPRESENTATIVE PORTER interjected, "That is correct." He said
Section 14 basically allows the future payments to take into
consideration inflation and provides what that rate would be, so
that the value of the compensation stays the same. Referring to
Section 15, he described collateral benefits as those things that
a plaintiff receives in compensation from other sources, rather
than from a judgment that the defendant has to pay. He cited the
example of the driver of a car being injured because of someone's
negligence. Car insurance would pay for repair of the car, medical
bills and so forth, depending on the coverage.
REPRESENTATIVE PORTER explained, "Currently, the jury at the
subsequent trial of the person who negligently hit you is not
allowed to hear that these other collateral sources exist and
actually have, in many cases, paid some of the costs of the claims
that the plaintiff is making." He said after the jury rendered its
judgment, the defendant could bring before the judge evidence of
other collateral sources. The judge then determined how much the
judgment should be reduced, based on what those sources were.
Following that, whoever furnished that collateral source often sued
the defendant to try to recover that amount, with a whole new trial
to establish that negligence.
REPRESENTATIVE PORTER said, "Consequently, what we're providing
here is one, let's eliminate that step of the subsequent trial and
say if a collateral source, other than those that are by law
required to seek subrogation, which is the return of that money,
just your plain old everyday insurance company, let's just no-fault
that. We're not going to require another trial, another filing of
the case to get that money back. Let's just say if it's a
collateral source and you paid it, this person paid premiums to get
that coverage, you provided it, let's call it square, the idea
again being that the person is made whole."
REPRESENTATIVE PORTER continued, "What isn't covered by insurance,
then, certainly is a claim that can be looked at by the court. And
we're saying that that information should be provided to the jury,
so that they can participate in this and have a full understanding
of the facts of the case and do their own reductions, rather than
be in the dark, so to speak, about whether this person has other
kinds of coverage or not."
Number 1190
REPRESENTATIVE PORTER said Section 16 was thorny also. He said
there had once been a theory of apportionment of fault, called
"joint and several liability," which had unfortunately returned to
a degree. "Basically what it meant was that if I'm injured and
there are three persons that share some degree of responsibility
for my injury, ... all three of those people are jointly or
severally responsible for my damages," he said. "If two of these
folks that are responsible don't have any money and the third has
a whole lot of money, under joint and several, the third probably
is going to end up paying everything." He noted that apportionment
of fault was a jury question; juries determined the percentage of
fault for each person. However, under joint and several liability,
if two had no money, the percentage of fault they were apportioned
by the jury made no difference. The "deep pocket" paid it all.
REPRESENTATIVE PORTER said in 1988, the state had an initiative on
the ballot that he believed clearly sought to eliminate joint and
several liability. "Unfortunately, some of the wording of the
initiative, once it was passed, was taken to court and interpreted
to not totally do this, because the wording of it said if you are
a party to the suit, you will be apportioned a percentage of fault
and that is all that you will have to pay," he explained. "What
they should have said, it was later discovered, after that phrase
was examined by the court, was `any person responsible will have
their appropriate percentage of fault determined by the jury and
that's all that they will have to pay.'"
REPRESENTATIVE PORTER said consequently, the ability to define who
would be brought in as a party to a suit still existed. The
ability of a defendant to try to establish the guilt of someone who
was not a party to the suit now required the defendant to
separately sue to join that other person into the case and have
them present so that the apportionment could be made.
Representative Porter did not believe it was the intent of the
initiative that this would happen.
REPRESENTATIVE PORTER said Section 16 incorporated the idea that
apportionment of fault to all parties responsible should exist as
much as the law can allow, whether or not the plaintiff decides to
bring them in. He said most discussion of the bill would have to
go towards whether or not this was a good idea.
Number 1322
REPRESENTATIVE CROFT asked whether there was a provision that
ensures consistency between different suits based on the same cause
of action. He said, "I see Section 18 provides that an assessment
against a person who is not made a party is not binding on them
because they were not a party. Is there any other provision in
this that makes that binding? Or it's just successive suits?"
Number 1350
REPRESENTATIVE PORTER said, "To a nonparty? No, perhaps a
qualification to that would be that, as I'm sure you're aware and
many other people aren't, about the relationship between a Worker's
Comp case and a tort case is existing law that we're not trying to
change." He said by law, if an employee is injured on the job,
because of the Worker's Compensation statutes, the employer stands
to pay all of the compensation awarded under Worker's Compensation
if there was negligence involved in the injury.
REPRESENTATIVE PORTER said, "Worker's Comp has limited the scope
and areas of awards, but it requires the employer to be totally
responsible for the ... negligent injury or damage to employees.
Sometimes, these cases get, even understanding that, over into a
regular tort case because the theory is that there is this third-
party defendant, this other entity that may have shared some of the
responsibility for the injury, notwithstanding the fact that under
Worker's Comp laws, 100 percent of it was paid over here."
REPRESENTATIVE PORTER continued, "So to the extent that that law
exists, the employer is not -- well, basically, is still, within
what we're providing here, they can't be named, as opposed to `they
weren't named for whatever reason.' And while we're saying that
they can have a percentage of fault apportioned to them by the
jury, it's not something that they will ultimately be held
responsible for -- except when they try to get a Worker's Comp lien
against the judgment, we're saying that -- we have made some
adjustments in that, which we'll see when we get to them."
Number 1500
REPRESENTATIVE CROFT asked for clarification. "I sue you, saying
it's your fault. You say it's Ethan's fault. Ethan is not a
party. The jury believes you, and they say actually, it's zero
Porter and 100 percent Ethan's fault." He said his only remedy
then is to sue Ethan in a subsequent suit. "By this provision, if
I'm reading it correctly, ... it's not a determination of his
liability. I've got to establish that in the next action. It's
not binding."
REPRESENTATIVE PORTER replied, "It's a determination of this jury's
opinion of what the percentage of fault that that person who, for
whatever reason is not present, is. But it is not a determination
that results in that person having to pay anything, because they
weren't there, and in some cases we have discussed with Worker's
Comp, they can't be there. So when you hear the empty chair
position, it's something that happens now, under existing law, on
any of those cases where one of the parties that's responsible is
an employer."
REPRESENTATIVE PORTER said Section 19 is simple, another
recommendation of the task force that makes it clear that
intentional acts are exceptions to the liability of tort claims.
"So if you were injured because of someone else's intentional act,
you certainly can file a tort claim," he added.
REPRESENTATIVE PORTER said Section 20 basically puts some
specificity to expert witness qualification. It was an attempt to
obtain an expert as close as possible to "being in the same
ballpark with the person who the allegation is against."
Number 1659
REPRESENTATIVE BERKOWITZ asked whether this expert witness
qualification differed from the evidentiary rules.
REPRESENTATIVE PORTER replied, "Yes. Subsequently, we'll be
changing the evidence rules." He discussed Section 20, saying
"offers of judgment are, after a case has been filed, one party or
the other can make a formal offer to settle the case. And what
we're trying to do is to inspire reasonable offers and reasonable
assessment of those offers and taking them if they are reasonable,
consequently eliminating the costs of the process up to and
including the trial, which is a cost to both parties and the state
and everybody else."
REPRESENTATIVE PORTER advised that the task force recommended an
increase in the rate of prejudgment interest, with a higher rate of
prejudgment interest if a party made an offer that was refused and
the subsequent settlement was worse than that offer. He said, "If
that offer was made real early, then it would be real expensive to
you if that happened, and a little bit less if it was made later
and a little bit less if it was made later."
REPRESENTATIVE PORTER continued, "We're adopting that same
procedure. But we think that the amount of prejudgment interest,
especially in light of the fact that cases now, and there's a
section in here that makes it clear, don't allow prejudgment
interest after the judgment. They actually used to, but cases now
have said you can't do that. That really isn't that big an
inducement anymore."
REPRESENTATIVE PORTER continued, "Consequently, what we're saying
is that if this offer is made within a short period of time, from
the ability that you would have after a case is filed to get
discovery, so you kind of know where you're at, if a short period
of time after that the offer is made, 60 days after that, and you
don't accept it, and when you finally go to trial, the offer is
within 5 percent of -- less than what you would have settled for,
you've got to pay all reasonable actual attorneys' fees and costs,
from the time the offer was made until the judgment was entered.
That is an inducement."
REPRESENTATIVE PORTER said, "If the offer is made later than that
60 days after discovery, it goes down to 75 percent. If made just
really a short time, 30 days before trial or something, then it
goes down to 50 percent. Obviously, it is intended to make people,
as early on as possible, assess their positions and make reasonable
offers and have them accepted."
Number 1862
REPRESENTATIVE PORTER referred to Section 22. He said Rule 82
provides that the prevailing party in a suit is entitled to receive
a graduated percentage of their attorney fee costs, based on the
amount of the judgment. "And we're saying that there isn't any
conflict here in most cases," he said. "The offer of judgment that
we're providing ... would be more than Rule 82 fees anyway, and so
that that would prevail in those rare instances, if there were one,
that a Rule 82 recovery would be more than what the offer of
judgment recovery was, that you'd be able to get the Rule 82
recovery."
REPRESENTATIVE PORTER said, "Section 23 is basically the provision
that we mentioned, that instead of saying that the absolute 10.5
percent for prejudgment interest, we're going to make a floating
rate that's based on the three points above the 12th Federal
Reserve District discount rate, which is the standard kind of
thing."
Number 1977
REPRESENTATIVE BERKOWITZ asked, "Why do we have an adjustable rate
here and 10.5 percent earlier on?"
REPRESENTATIVE PORTER replied, "Well, the attempt is to ... make
the rate more favorably represent the value of money at the time
that it's going on. 10.5 has been in existence for a long time.
Under this, if this were law right now, the rate for prejudgment
interest for this year would be 8 percent, which is 2.5 percent
different than what that fixed rate is. In a high inflation, of
course, it would go up above 10.5 [percent]."
REPRESENTATIVE PORTER continued, "But ... the theory is, and this
again was something that was looked at and agreed upon by the task
force, that a floating rate is more -- I think they had a different
standard. We've had this one in the bill for a long time, but it
does reflect the task force to the extent that it reflects a
floating rate, as opposed to a fixed rate."
Number 2040
REPRESENTATIVE CROFT asked if that was on page 2, line 31.
REPRESENTATIVE PORTER said yes.
REPRESENTATIVE CROFT asked whether Representative Porter was just
trying to "not change the 10.5" percent interest in an unrelated
section.
REPRESENTATIVE PORTER said that was correct.
MR. SOURANT identified that as Section 26.
Number 2056
REPRESENTATIVE PORTER referred to Section 24 and said two cases,
McConkey v. Hart and Anderson v. Edwards, have established that
prejudgment interest should not be awarded on future economic
damages. He said that seemed somewhat obvious. "Anyway, we're
saying that that is the case," he stated. "And basically what
we're saying is that existing case law is now memorialized in
statute, so that you don't have to go to the law books to look it
up. You can actually find it in statute."
Number 2108
REPRESENTATIVE BERKOWITZ asked, "Future - we're talking about
subsequent to the time of the injury or subsequent to the time of
judgment?"
Number 2120
REPRESENTATIVE PORTER replied that to the extent they had described
future economic damages and future noneconomic damages, if those
were awarded, prejudgment interest should accrue from the time of
injury until the time of judgment. He described prejudgment
interest as "basically the money that I might have earned on the
money that you owed me, which we've established here but in theory
began the date that I was injured."
REPRESENTATIVE PORTER referred to Section 25 and said it consisted
of the change applying to Section 23, which addressed the interest
rate on judgments against the state. "That just basically brings
that floating rate into the same thing that applies to the state,"
he said.
REPRESENTATIVE PORTER said, "Section 26 actually is another area of
the law that for some reason had been tied to that fixed rate in
the tort area, and we don't want to change that, not that it might
not be appropriate, but because of single-subject, we can't change
it."
REPRESENTATIVE PORTER said, "Section 27, voluntary arbitration, is
a conforming amendment, really, in the areas of collateral source,
as it addresses medical malpractice cases. You'll see, after we
get further into this, that medical malpractice tort cases, for
some reason, took off on a different track over the years and had
a whole bunch of individual considerations. And what we have tried
to do to a certain extent is kind of bring them back in and make
them consistent with other tort cases. And to that degree, because
of what we've done previously, we're eliminating a section of
that."
REPRESENTATIVE PORTER referred to Section 28, on medical advisory
panels. Again from the task force, it made the advice of medical
panels in medical malpractice cases available to cases where the
allegation was against a state or municipal health person.
REPRESENTATIVE PORTER referred to Section 29 and said it "provides
specifically, which the law hadn't previously, and it caused some
litigation, whether or not the panel may consider the omission of
a health care provider, as opposed to just commissions by the
health care provider."
REPRESENTATIVE PORTER referred to Section 30 and said it speeds up
the discovery process so that the trial and the tort proceedings
can get under way.
REPRESENTATIVE PORTER referred to Section 31 and said it makes it
clear that it is also appropriate to use the advisory panel in
cases where prisoners in correctional settings have made "these
kinds of allegations."
REPRESENTATIVE PORTER referred to Sections 32 and 33. He said they
were basically just definitions, not previously included, for the
medical malpractice section of the chapter.
REPRESENTATIVE PORTER said Section 34, regarding contingent fee
agreements, addressed the other ingredient of punitive damages not
yet mentioned. Considering that the intent of punitive damages is
to punish and not to provide compensation, 50 percent of that award
would go to the state. This figure had gone through the
negotiation process, he said.
TAPE 97-24, SIDE A
Number 0001
REPRESENTATIVE PORTER referred to Section 35. He said it was an
area of law resulting from a court case that found a hospital
liable for the act of an emergency room doctor who was not an
employee. Section 35 had gone through much discussion and give-
and-take. "And as a result, it basically lays out like this," he
said. "Only emergency room doctors, and as a matter of fact, when
we get to that section, we will be offering subsequently an
amendment to make absolutely sure that we've defined an emergency
room doctor appropriately, but we're talking about those persons
who contract to provide initial emergency room physician response
for the hospital, and that those doctors, assuming the hospital
meets these standards of recognizing and confirming that doctor's
credentials, posting that they're not responsible for that doctor's
acts, and no small other requirement that that doctor carry, which
is not otherwise required, $500,000 worth of per-incident liability
insurance, that in those situations, then, that the hospital is not
going to be found to be responsible for someone who has their own
profession, their own standards and is not supervised by the
hospital."
REPRESENTATIVE PORTER said the hospital is required by law to
provide emergency room services. It's a nondelegable duty. "And
with that in mind, we feel it appropriate that they not be held
responsible for the acts of an individual whose presence they are
required to have but don't have the ability to supervise," he said.
"In those cases where a medical facility, for whatever reason,
chooses to have doctors as employees, then of course they are
responsible. One of the general considerations in this was that
this should apply to a broader group because the same thing applies
to all doctors. But that got into the discussion of `where do you
draw the line' and `are hospitals going to try to, under the guise
of independent contractor, have their nurses and everybody else not
responsible.' So we put it back down to address the case that we
were trying to fix and leave the rest of it for a later time."
Number 0263
REPRESENTATIVE PORTER referred to Section 36. He said it dealt
with "one little addition to existing law." Currently, a person
convicted of a felony cannot recover damages resulting from the
commission of the crime. However, there had been cases in Alaska,
enough to be significant, where a conviction did not occur. For
example, a man committing a burglary had fallen through the roof of
a building, resulting in his death and therefore no conviction.
His estate tried to sue the owner of the building. Representative
Porter said, "And so we kind of thought, `Let's not.'"
REPRESENTATIVE PORTER said this was a task force recommendation.
He believed the task force had also discussed the following section
but had insufficient time to put it together. It similarly
prohibited a person injured while driving under the influence of
alcohol, for example, from suing.
CHAIRMAN GREEN suggested less-detailed discussion because of time
constraints.
REPRESENTATIVE CROFT asked whether that section affected dram shop
cases.
REPRESENTATIVE PORTER said the explanation of that was lengthy.
REPRESENTATIVE CROFT offered to do it later.
Number 0412
REPRESENTATIVE PORTER said Section 37 was "the gathering of the
information that I mentioned about settlements."
REPRESENTATIVE PORTER said Section 38 provides that information be
gathered to better enable the Division of Insurance to assess the
effect of legislation on insurance rates.
REPRESENTATIVE PORTER referred to Section 39, regarding appointment
of independent counsel, and said there would be questions. He
explained when a person is sued and the suit involves an area that
they have liability coverage for, often the insurance company finds
itself dealing with three kinds of claims. First are claims they
clearly cover and are responsible for. Second are claims for which
they do not know whether they provide coverage, because the facts
to make that determination do not yet exist. When that happens,
there is a "reservation of right" on that particular claim, and the
insurance company says, "Well, we'll get involved, but we really
don't know whether we're responsible or not." For example, if they
do not cover an intentional act, and their client says it was not
an intentional act but there is an allegation to the contrary, they
might have to wait until the trial establishes whether it was an
intentional act. The third area is claims where they clearly deny
coverage.
REPRESENTATIVE PORTER said case law had established that in the
first case, the insurance company was required to provide the
defense. In the second, where they had a reservation of right,
they were also required to provide a defense. However, because of
the reservation that had been established, there was a conflict of
interest. Therefore, they had to pay for and appoint independent
counsel, who worked for the defendant [misstated as plaintiff], as
opposed to the person who was insured or the insurance company.
REPRESENTATIVE PORTER said practice had made it "seem apparently
required" that they also cover the third area, denied claims.
Section 40 provides that if the insurance company pays for
independent counsel, the company may then, independent of the
plaintiff, reach a settlement with the defendants on the first and
second areas of claims.
Number 0661
REPRESENTATIVE PORTER referred to Section 41. He explained, "We
discussed Worker's Comp cases. And in those cases where there's a
third-party defendant, right now the employer can come back and
take a lien against the award ... that's received by the plaintiff
in the third-party tort case and recover his entire Worker's Comp
payment from that award. What we're saying is ... an employer
should be able to do that, but only to the extent, now that we have
total ... apportionment of fault, you can only do that to the
extent that the percentage that was allotted to him in this trial
amounts to that amount. And if it's less than that, he doesn't get
it." He said that would generate a lot more discussion.
REPRESENTATIVE PORTER outlined Sections 42 through 47. He said
Section 42 is to improve the existing superior court fast-track
procedures. Sections 43 and 44 are court rule changes consistent
with previous provisions in the bill. Section 45 is a rule change
addressing the collection of settlement information from the Alaska
Judicial Council. Section 46 is a rule change consistent with the
medical panel section. Section 47 is a rule change but has a new
provision, in the previous bill, that "a court now may fine an
attorney, and their clients, for infraction of the rules from --
instead of just a maximum of $1,000, it'll go up to $10,000."
REPRESENTATIVE PORTER said Section 48 enhances that theory to try
to reduce frivolous and intentional misdeeds. It provides that
judgment be entered against a party where it could be shown that
party made an intentional false statement of a material fact about
that particular claim. "Whether it was a legitimate claim or not,
if they lied about it, they're not going to get a recovery," he
said.
REPRESENTATIVE PORTER outlined Sections 49 through 60. Section 49
changes the appellate rules to allow gathering of information
regarding settlements. Section 50 is a consistency change. He
stated, "[Section] 51 is a confirmation of a repeal of the medical
malpractice collateral benefit thing." Referring to the second
"Section 51" in the Sectional Analysis, he said, "[Section] 51 is
a civil rule change addressing the apportionment of fault section
that we dealt with." He said Sections 52 through 60 are conforming
technical changes to other provisions.
REPRESENTATIVE PORTER discussed Sections 61, regarding alternative
dispute resolution. He said, "We went all around trying to figure
out what the best approach for this was. And what we've settled
on, basically, is this. We have got mixed information at this
point on what kinds of alternative dispute resolutions work in what
kinds of areas. ... What we're asking here is that the judicial
council go out, not reinvent the wheel, but look at existing
programs in the federal and other states, and give us an assessment
of their applicability here on what kinds of cases, and to do that
by next year, so that next year, we can take that information and
see if there's enough there to get into the area of alternative
dispute resolution in these kinds of cases."
REPRESENTATIVE PORTER concluded by saying Sections 62, 63 and 64
are standard closing sections.
Number 0944
CHAIRMAN GREEN noted that silence on issues did not necessarily
imply acceptance. He called upon Judge Stewart to testify.
Number 0962
THOMAS B. STEWART, Judge (Retired), Alaska Superior Court, spoke on
behalf of the Governor's Advisory Task Force on Civil Justice
Reform. He did not intend to discuss the bill's merits nor compare
it with that offered by the task force, but rather to explain the
task force's process in arriving at its conclusions. He described
himself as a reluctant chairperson, persuaded by Lieutenant
Governor Fran Ulmer to take the position.
JUDGE STEWART said although he had no hand in selecting members, he
believed the task force make-up was significant in looking at the
merits of its recommendations. He listed the following members:
Bill J. Allen, chairman of VECO; Judith M. Brady, executive
director for the Alaska Oil and Gas Association; David H. Bundy,
Mr. Allen's attorney; Michael J. Burns, president of Key Bank of
Alaska; Charlie Cole, former attorney general; Jeffrey M. Feldman,
an attorney who largely represents plaintiffs but represents
defendants as well; Roger F. Holmes, an attorney who primarily
represents defendants; Julie Kitka of the Alaska Federation of
Natives; Julian L. Mason, an attorney who represents more
plaintiffs than defendants; Don Slone, an engineer in a private
firm with concerns about the effect of judgments involving
engineers and architects; Stephan H. Williams, an attorney who
largely represents plaintiffs; Mark R. Williams, who was the chief
executive of Carr-Gottstein foods; and Dr. Rodman Wilson, who Judge
Stewart believed was the executive of the Alaska Medical Society.
JUDGE STEWART explained, "There was another member who was a
representative of labor organizations, but for personal reasons he
was forced to leave the committee before it worked." There were
also five ex-officio members, including Bruce M. Botelho, Attorney
General; Jeffrey W. Bush, Deputy Commissioner, Department of
Commerce and Economic Development; Senator Johnny Ellis;
Representative Brian Porter; and Brad Thompson, Director, Division
of Risk Management, Department of Administration.
JUDGE STEWART noted there was no consumer advocate in terms of an
individual who might have suffered injury in a serious accident.
"I felt that the attorneys who represent plaintiffs were eloquent
representatives of consumer advocates," he explained. "But there
was not a consumer advocate as such. The Alaska Public Interest
[Research] Group, whose executive is Stephen Conn, appeared at ...
most of our meetings, certainly of the entire group and I believe
at many of the subcommittee meetings as well, and regretted the
absence of a consumer advocate."
JUDGE STEWART said in taking the job as chairperson, he felt it was
important to obtain better statistical information than was
generally available at the time they commenced work in early
September. He had wanted data from not only Alaska but the entire
nation. "And I thought we should engage the services of people who
were conversant in the field at the national level," he said. "And
we did get two such persons, Doctor Deborah Hensler (ph), director
of the Institute for Civil Justice at the Rand Corporation in
Pasadena, I believe, and Professor Theodore Eisenberg (ph), ... a
professor of law at Cornell University. Both of these individuals
have broad experience nationally in this field."
JUDGE STEWART said the Alaska Judicial Council collected what
statistical data they could in the limited time available. This
was included in the task force report or its appendices. Applying
to Alaska cases, it included numbers of cases, sizes of judgments,
numbers and sizes of awards of punitive damages, and so forth. "We
were unable to get data on settlements, which is a large segment of
this whole field, and that's why the task force report made
recommendations that an attempt be made to get data on the impact
of settlements on this whole area," he explained.
JUDGE STEWART said at the outset, members agreed the task force
would make positive recommendations only by a two-thirds vote.
Members felt there should be a strong majority to support the task
force recommendations. He noted, "I, frankly, was in the minority
on several issues." Judge Steward acknowledged the issue was
difficult and required compromise. "And I felt that the
compromises that were reached, even though I didn't agree with the
details, I could support as a compromise result by a very
substantial majority of people that did a lot of work in this
area," he said. "And so I commend to you the recommendation of the
task force when you look at Representative Porter's bill and decide
ultimately what you wish to do."
Number 1331
CHAIRMAN GREEN thanked Judge Stewart for all the effort. He
expressed amazement the task force could get a two-thirds consensus
on any of those issues.
JUDGE STEWART said he was sorry Representative Porter was unable to
attend the meetings where the decisions were finally made. He
explained that the task force was broken into three subcommittees,
on procedure, liability and damages. The subcommittees came up
with proposals, which were debated and voted upon by the whole task
force at the final meetings in late November. Judge Stewart
explained, "We had a statewide teleconference at the outset,
conducted from Juneau, and then we had public hearings in Juneau,
Anchorage, Bethel and Fairbanks. I attended all of those. There
were some 59 or more individuals who testified." He suggested that
the committee look at those comments. He said probably the most
forceful comments came from the Alaska Public Interest Research
Group (AKPIRG), who felt strongly that they represented consumer
advocates.
CHAIRMAN GREEN noted that Steve Conn from AKPIRG was on
teleconference. He then called upon Dr. David McGuire to testify.
Number 1453
DAVID McGUIRE, M.D., Representative, Alaska Liability Reform Group,
testified via teleconference from Anchorage. A physician in
private practice, he had a long-standing interest in civil justice
reform. He referred to information he had sent to the committee
that day via facsimile regarding the "civil justice case known as
Justice, after Timothy Justice." Dr. McGuire agreed with Judge
Stewart that it was difficult to obtain information and said the
result was "that we have an alternative explanation for all the
facts in front of us."
DR. McGUIRE said while the Justice case occurred in 1987, it
illustrated how two different judicial systems approached the
identical problem and what the outcome was under those two
different systems. Dr. McGuire cited the facts of Mr. Justice's
case, which began at an Anchorage emergency room and continued to
Los Angeles County, where Mr. Justice suffered a stroke. It turned
out he had a congenital malformation. He sued, arguing the
physicians in question should have made a diagnosis and
appropriately intervened, preventing the stroke.
DR. McGUIRE said in California, then operating under the rules of
MICRA (California Medical Injury Compensation Reform Act), Mr.
Justice received a settlement of $32,000 per year for 42 years and
a number of lump-sum payments. This cost the people of California
$578,000. Dr. McGuire said Mr. Justice also sued in Anchorage,
where the jury was precluded from knowing about the successful
California suit. California facts were not admitted to the jury,
nor were the California defendants permitted to testify. The
Alaska jury returned a verdict of $1.8 million payable as a lump
sum, 3.2 times the award from California.
REPRESENTATIVE NORMAN ROKEBERG asked whether people would be
allowed to testify again.
CHAIRMAN GREEN said they could. He suggested that people fax
comments, which he would distribute to committee members.
Number 1627
REPRESENTATIVE ROKEBERG referred to Section 35 on page 16. He
asked whether Dr. McGuire thought any hospital in Alaska would be
able to hire an emergency room physician with those kinds of
requirements.
DR. McGUIRE replied simply, "Yes."
Number 1675
JOEL BLATCHFORD testified via teleconference from Anchorage. He
cited a personal story about an operation involving gall bladder
removal and exploding intestines. He cited numerous complications
and alluded to a lawsuit he had filed. He said no doctor in Alaska
would touch him either before or after the lawsuit because of fear.
He hoped the legislature could change these doctors' ways so he
could get help, because nobody would work on him anymore.
Number 1783
CHERI SHAW, Executive Director, Cordova District Fishermen United
(CDFU); and Chair, Tort Reform Committee, United Fishermen of
Alaska(UFA), testified via teleconference in opposition to the
bill. She said, "Neither CDFU nor UFA supports House Bill 58. The
punitive damage portion of the bill we find to be the major problem
in the drafting. Section 9 states that punitive damages will not
be awarded unless supported by clear and convincing evidence of
malice or conscious acts showing deliberate disregard of another
person by the person from whom the punitive damages are sought."
She believed it was almost impossible to prove clear and convincing
malice.
MS. SHAW stated concern that SSHB 58 would "open the door for Exxon
in the appellate court." She recommended inclusion of language
making exceptions for damage to natural resources. She said three
or four times the amount of compensatory damages, or $300,000 to
$600,000, whichever is greater, was insufficient punishment in
cases like the Exxon Valdez oil spill, which would affect many
people for a long time. She offered to lend support in drafting an
amendment.
MS. SHAW referred to Section 10(d). She then read the second
paragraph of the sponsor statement, which said in 1992 "only about
50 percent of damage awards of some $132 billion nationwide went to
the injured party. The remaining 50 percent went to the cost of
litigation and attorney fees. From the foregoing, it is apparent
that if the tort system is judged as a method of compensating
accident victims for their losses, it is both inefficient and
unfair. Inefficient because only about half of the cost goes
toward any form of compensation for victim. It is unfair because
many injured victims receive insufficient compensation to no
compensation at all."
MS. SHAW asked how, if he saw this as unjust, Representative Porter
could draft a bill giving the state 50 percent of the damage award.
She asked, "Do attorney fees and litigation costs come from the
remaining 50 percent of the victim's share? This seems to be more
unfair than the status quo." She advised she would fax her
testimony.
Number 1935
DALE BONDURANT testified via teleconference from Kenai, saying he
hoped he would never be either a victim or the cause of injuries.
It bothered him that some would "hand-tie" the jury-by-peers
process. He believed the bill limited the responsibility of those
with deep pockets while "capping the needs or levels of harm
inflicted on the victim." He believed the state's cut of 50
percent made the whole process a gamble weighted against the
victim. "The Godfather doesn't even demand that high a cut," he
said. "I think this is a very poor bill. It gives more credence
to protecting somebody's wealth than it does to consider the harm
that a victim has." He believed the determination should be left
to a jury.
Number 2062
PAUL SWEET testified via teleconference from Mat-Su, concurring
with Mr. Bondurant's testimony. He further asked, "If you're going
to have contract doctors, what's to say an airlines tomorrow
couldn't turn around and have contract mechanics? So the only
person you could possibly sue out of 300 deaths in an airplane
would be the mechanics and not these airlines." Mr. Sweet said he
would fax additional comments.
CHAIRMAN GREEN requested that other testifiers fax their comments
as well.
Number 2118
MR. SWEET asked, "To the tort reform, how far back does the
retroactive go? The date of the enactment or all unsolved cases?"
REPRESENTATIVE PORTER replied, "The law would only apply to cases
filed after the effective date of the legislation."
REPRESENTATIVE CROFT noted that unlike the old bill, in SSHB 58 the
effective date was July 1, 1997.
REPRESENTATIVE PORTER explained, "There was a provision in the
previous bill to make one portion retroactive. That is not a part
of this bill."
Number 2152
STEVE CONN, Director, Alaska Public Interest Research Group
(AKPIRG), testified via teleconference from Anchorage. He thanked
Judge Stewart for his kind words. Mr. Conn emphasized that despite
Representative Porter's assertions that sections of SSHB 58 were
similar to task force recommendations, the task force explicitly
rejected most of the major components of this bill after
substantial debate. "I'm speaking of the statute of repose, which
destroys a legal claim before it can be brought," he said. "I'm
speaking of the statute of repose that takes the right to sue away
from a child when the child reaches eight years old. I'm speaking
of the new cap on noneconomic damages, pain and suffering. We are
already one of a handful of states that even has a cap. I'm
speaking of the definition of punitive damages. The Governor's
commission had a completely different definition. So let's be
extremely clear here that most of these things in this bill are the
ideas of radical people who want to protect those who injure other
people."
MR. CONN urged the committee to walk through this bill carefully.
He said, "It speaks in the prelude about responsibility for our
acts as a great Alaskan tradition, and then it begins to shift
responsibility away from the guilty, making the innocent pay.
Shifting the fault. Shifting the cost. Limiting the times that
people can bring a claim. Putting caps on pain and suffering as
well as punitive damages, but you notice, late in the bill, making
sure that costs that should be paid by the tortfeasor were
conditioned by inflation, were conditioned by many other (indisc.)
clauses. You didn't see any changes (indisc.) on the cap. This is
a reprehensible bill. It needs substantial work."
MR. CONN concluded by saying community forums organized by the task
force stated loud and clear that they do not want the legislature
to prejudge tort cases. Rather, they want juries to decide upon
the facts before them.
Number 2250
BONNIE NELSON testified via teleconference from Anchorage, saying
she opposed much of SSHB 58. She praised the task force for its
hard work. "Even though I didn't agree with all of it, it was
people working together," she said, indicating she regretted what
Representative Porter had done with it. She suggested the bill
helped the wealthy instead of helping working people obtain
justice. She believed the state should make it easier and cheaper
for people to access the jury system. She also indicated she had
concerns with Sections 35 and 36. [Much of Ms. Nelson's testimony
indiscernible due to poor sound quality.]
Number 2349
ROSS MULLINS testified via teleconference from Cordova on his own
behalf and as chairman of the Prince William Sound Fishermen's
Plaintiffs Committee, which represented several thousand commercial
fishermen plaintiffs in the Prince William Sound area. He fully
concurred with fellow-Cordova-resident Cheri Shaw. He said the
lack of faith in the jury system to make well-reasoned awards to
injured and damaged plaintiffs in civil torts is appalling to him.
MR. MULLINS referred to Representative Porter's indication that
only 5 percent of civil tort cases end in trial. He asked, "Could
this mean that with our current system, with no caps on amounts on
various types of damages, that wrongdoers, malfeasors, insurance
companies, et cetera, are prone to settle to avoid litigation that
might result in an unknown level of economic consequence to them?"
Mr. Mullins believed if that were true, potential defendants would
be less likely to settle out of court and therefore go to trial if
these caps were put on.
MR. MULLINS asked, "Would not this actually serve to clog up the
court system and create a situation resulting in the adage that
justice delayed is justice denied? Should even 20 to 30 percent of
the 95 percent of cases settling out of court go to trial because
of this bill, then our court system would likely be clogged and
impeded under the weight of this proliferation."
MR. MULLINS referred to Section 21, regarding offers of settlement,
and discussed "the draconian shift" of attorney fees and interest
to the plaintiff if the result at trial did not exceed the original
offer. He believed this might instill such pressure on plaintiffs
as to make them unlikely to go to trial, which would deprive them
of a fair determination of damages in a forum of their peers. It
might increase the number of cases settling out of court. That
would happen not because the recipient of the offer felt it was
fair and just, which was currently the case, but because of the
onerous statutory penalties and pressure brought by this bill.
MR. MULLINS questioned the necessity of the bill when even
Representative Porter agreed only 5 percent of cases go to trial
and of those, one in twenty results in punitive awards. He said
out of 2,000 cases, 1,900 settled out of court.
TAPE 97-24, SIDE B
Number 0001
MR. MULLINS said it was unclear if the few punitive awards exceeded
the proposed caps. He referred to periodic payments and said it
seemed ludicrous that after a plaintiff made it through years of
litigation and a possible appeal, the money awarded could be doled
out "by some scheme that deprives that person or entity from
determining the best application of any award." He believed this
did not show concern for public welfare. He thought it more likely
that the interests of the insurance industry were being served by
the bill.
Number 0060
DARYL NELSON testified via teleconference from Anchorage, saying he
was appalled by the bill. He said injured or disabled people would
not be able to obtain help. He asked if that was the intention.
Mr. Nelson indicated he had presented testimony before the task
force. He said he knew a lot of disabled people who would disagree
with the bill. "If you pass this, everything's going to go down
the tube and you're not going to get anything accomplished," he
concluded.
Number 0134
ERIC YOULE, Executive Director, Alaska Rural Electric Cooperative
Association, testified via teleconference from Anchorage. "There
is one issue of particular concern to the electric utility that we
would actually like to see included in the tort reform bill," he
said. "This has to do with civil liabilities on the electric
utility industry in the state of Alaska. Our industry, at least
those I represent, are some 34 utilities which provides power to
probably 90 percent of the households throughout the state."
MR. YOULE said the electric utility industry was very much in favor
of individuals recovering damages for intentional and reckless
negligence acts or omissions of the electric utilities. However,
within the last few years, more and more plaintiffs' attorneys were
claiming electricity is a product rather than a service and that
the utilities should be subject to strict liability regardless of
the merits of the claim. He believed this was very unfair and
wanted to see the strict liability specifically precluded by
statute.
MR. YOULE stated, "Consequently, we would suggest that within the
Alaska Statute codes, in the area of AS 09.65, it would be amended
to include language that would specifically preclude strict ...
liability for certificated electric utilities certificated by the
Alaska Public Utilities Commission, but that nothing would preclude
individuals from making valid, legitimate claims based on acts of
God, recklessness, negligence acts or omissions of the electric
utility." He offered to work with the committee to craft
acceptable language.
Number 0224
CHAIRMAN GREEN asked Mr. Youle to fax his testimony.
REPRESENTATIVE PORTER asked Mr. Youle whether the application of
strict liability was a function of a statute or a case decision.
He requested the cite if it was a case.
MR. YOULE replied, "There have been a couple of adjudications
within the state that to my knowledge have not actually gone to
trial, that raises our concern. I do know, however, that the Lower
48, within the last seven years, ... there have been some specific
instances where judgments have been rendered that the utility is
subject to strict liability, case closed." Mr. Youle believed he
could probably locate those cases.
REPRESENTATIVE PORTER said it would be helpful if he could find one
or two.
MR. YOULE agreed to do so.
REPRESENTATIVE CROFT expressed interest in seeing those as well.
He asked Mr. Youle whether "you or any other electrical utility in
this state" had been found liable on that theory.
MR. YOULE replied, "I can tell you I have not. And it is my
understanding, and I may be wrong about this, that that has not
been the case to date. But I will say that there is one case that
is pending that, frankly, we don't even think is going to go to
trial, but there is one pending where the judge has, despite the
indications in APUC statute, there are indications that he would
allow strict liability to be a legal argument."
Number 0290
JEFFREY W. BUSH, Deputy Commissioner, Office of the Commissioner,
Department of Commerce and Economic Development, came forward to
testify. He specified he was speaking on behalf of the
Administration. "I'm here primarily to say that we support the
Governor's bill and the task force's bill," he stated. "We think
the process that that group went through, as described by Judge
Stewart, was a good process. It represented a lot of compromise.
We all, everyone at the table, had to give a lot. There's a lot of
things in it that a lot of people don't like, and there's a lot of
things in there that everyone was able to agree on."
MR. BUSH continued, "To the extent that the bill before you is
consistent with that, we obviously support it. To the extent that
it's inconsistent, we don't." He said several sections in SSHB 58,
as described by Representative Porter, were new to him. As a
person who had followed tort reform for several years, he believed
these raised questions not yet addressed.
MR. BUSH said, "From Representative Porter's description of what
the purposes and intent of some of the sections were, I think he's
inconsistent with the language that's actually in the bill," he
said. "And I think there actually are several sections, three or
four that I can think of off the top of my head right now, where
his description was consistent with what I would have expected the
bill to say and what I think was the intent, but is not in fact
consistent with the language." He suggested those could be worked
out later.
MR. BUSH commended the task force. He noted there were several
volumes of materials collected by the task force, much of which
would be useful to the committee.
MR. BUSH said SSHB 58 contained a proposal to have the Alaska
Judicial Council study alternative dispute resolution procedures.
He had supported the concept of alternative dispute resolution the
previous session, and it had been his "pet project" at the task
force. He encouraged the committee to look at the task force
recommendation and the Governor's bill, which proposed a pilot
project for alternative dispute resolution.
MR. BUSH noted SSHB 58 calls for further studies by the Alaska
Judicial Council of the materials that are out there. "The
judicial council and the Attorney General's office provided us with
lots and lots of materials, because we in fact, as a task force,
looked at that very question," he explained. "And I think that the
materials that we've collected are virtually all of the significant
studies that have been done on alternative dispute resolution in
the United States. We have that material. It was looked at by the
task force. And based upon that, the task force made a
recommendation of a pilot project."
MR. BUSH acknowledged the possibility that another group looking at
the same materials may come up with another recommendation.
However, the task force had debated over alternatives.
Unanimously, they agreed that alternative dispute resolution looks
like a very good thing. Studies went both ways as to whether it
would save or cost money. However, studies of satisfaction rates
for both plaintiffs and defendants using the process showed
satisfaction between 85 and 95 percent, which was a much higher
satisfaction rate than for the judicial system or tort system. "So
based upon the satisfaction, we felt that even if it did cost a
little bit of money, it was a good project and we should at least
go with a pilot project with it," he said. He encouraged
consideration of that option.
Number 0504
CHAIRMAN GREEN referred to materials Mr. Bush had with him and
asked if that information would be available.
MR. BUSH replied, "Sure. And I think Representative Porter has
most of that material as well, because he was part of the task
force."
CHAIRMAN GREEN asked whether Mr. Bush would entrust him with that
material for the committee's use.
MR. BUSH said yes. He noted those were the Attorney General's
copies, however.
Number 0528
REPRESENTATIVE PORTER advised that he had a duplicate set. He said
to Mr. Bush, "To the extent that there are sections that you
believe the intent was one thing but the wording is another, I
appreciate very much being able to sit down with you any time to go
over those and, to the extent that I agree, will change it."
MR. BUSH said that would be fine.
REPRESENTATIVE PORTER said, "To the extent of the alternative
dispute resolution costs, there's no dispute of the suggested costs
from the court system. The fiscal note that they would have
attached to that provision in this bill would have killed it. So
if we're going to fight that battle, I would rather have the
benefit of a year's actual study of all this data, instead of it
existing and really not having a good grasp of what it all means,
and then take it on next year. That's what the intent is."
Number 0584
CHAIRMAN GREEN said he knew someone who intended to introduce
legislation on dispute resolution. He agreed there was potential
for a lot of good coming from it. "This would be a limited pilot,
I guess, on architects, engineers and land surveyors," he said.
Number 0604
REPRESENTATIVE CROFT noted a conflict for the record, stating, "I
said at the initial meeting of this committee that I am an attorney
licensed both in Alaska and California. I've had a practice that
was pretty much split between plaintiffs and defense work. We
represented a number of school districts, so there's no particular
tilt that I come at it on. But I guess some of these provisions
could help or hurt if I stay in that line of work."
REPRESENTATIVE BERKOWITZ said, "Mr. Chair, if I could make a lesser
conflict because I am also an attorney licensed in California and
in Alaska. My practice, such as it used to be, was primarily in
criminal law, although occasionally I'd work for civil attorneys,
not often. I have no idea what kind of impact this would have."
CHAIRMAN GREEN responded that although the committee was aware of
these, it was probably good for the public to know the committee
had the expertise of two attorneys.
ADJOURNMENT
Number 0666
CHAIRMAN GREEN adjourned the House Judiciary Standing Committee at
3:40 p.m.
| Document Name | Date/Time | Subjects |
|---|