Legislature(1995 - 1996)

02/21/1996 03:15 PM L&C

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
txt
          HOUSE LABOR AND COMMERCE STANDING COMMITTEE                          
                       February 21, 1996                                       
                           3:15 p.m.                                           
                                                                               
                                                                               
 MEMBERS PRESENT                                                               
                                                                               
 Representative Pete Kott, Chairman                                            
 Representative Norman Rokeberg, Vice Chairman                                 
 Representative Beverly Masek                                                  
 Representative Jerry Sanders                                                  
 Representative Brian Porter                                                   
 Representative Kim Elton                                                      
 Representative Gene Kubina                                                    
                                                                               
 MEMBERS ABSENT                                                                
                                                                               
 All members present                                                           
                                                                               
 COMMITTEE CALENDAR                                                            
                                                                               
 Confirmation of Governors Appointments:  State Board of                       
 Registration for Architects, Engineers, and Land Surveyors; Alaska            
 Workers' Compensation Board; Alaska State Board of Public                     
 Accountancy; Board of Clinical Social Work Examiners; Board of                
 Dispensing Opticians; Alaska Labor Relations Agency; Board of                 
 Marine Pilots; Board of Marital and Family Therapy.                           
                                                                               
 HOUSE BILL NO. 414                                                            
 "An Act requiring conciliation panel review in a civil action                 
 against an architect, engineer, or land surveyor; and providing for           
 an effective date."                                                           
                                                                               
      - HEARD AND HELD                                                         
                                                                               
 PREVIOUS ACTION                                                               
                                                                               
 BILL:  HB 414                                                               
 SHORT TITLE: MANDATORY MEDIATION/DESIGN PROF LAWSUITS                         
 SPONSOR(S): REPRESENTATIVE(S) GREEN                                           
                                                                               
 JRN-DATE     JRN-PG                  ACTION                                   
 01/12/96      2428    (H)   READ THE FIRST TIME - REFERRAL(S)                 
 01/12/96      2429    (H)   LABOR & COMMERCE, JUDICIARY                       
 01/29/96              (H)   L&C AT  3:00 PM CAPITOL 17                        
 01/29/96              (H)   MINUTE(L&C)                                       
 01/31/96              (H)   L&C AT  3:00 PM CAPITOL 17                        
 01/31/96              (H)   MINUTE(L&C)                                       
 02/07/96              (H)   L&C AT  3:00 PM CAPITOL 17                        
 02/07/96              (H)   MINUTE(L&C)                                       
 02/21/96              (H)   L&C AT  3:00 PM CAPITOL 17                        
                                                                               
 WITNESS REGISTER                                                              
                                                                               
 JEFF LOGAN, Legislative Assistant                                             
   to Representative Joe Green                                                 
 Alaska State Legislature                                                      
 Capitol Building, Room 24                                                     
 Juneau, Alaska 99801                                                          
 Telephone:  (907) 465-6547                                                    
 POSITION STATEMENT:  Reviewed changes made to HB 414.                         
                                                                               
 COLIN MAYNARD, Legislative Liaison Chair                                      
 Alaska Professional Design Council                                            
 1400 West Benson, Suite 500                                                   
 Anchorage, Alaska 99917                                                       
 Telephone:  (907) 274-3660                                                    
 POSITION STATEMENT:  Testified in support of HB 414.                          
                                                                               
 REPRESENTATIVE JOE GREEN                                                      
 Alaska State Legislature                                                      
 Capitol Building, Room 24                                                     
 Juneau, Alaska 99801                                                          
 Telephone:  (907) 465-6547                                                    
 POSITION STATEMENT:  Sponsor of HB 414.                                       
                                                                               
 RUSS WINNER                                                                   
 900 West Fifth, Suite 700                                                     
 Anchorage, Alaska 99501                                                       
 Telephone:  (907) 277-9522                                                    
 POSITION STATEMENT:  Testified on HB 414.                                     
                                                                               
 ACTION NARRATIVE                                                              
                                                                               
 TAPE 96-11, SIDE A                                                            
 Number 001                                                                    
                                                                               
 The House Labor and Commerce Standing Committee was called to order           
 by Chairman Pete Kott at 3:15 p.m.  Members present at the call to            
 order were Representatives Kott, Elton, Kubina and Masek.                     
 Representative Rokeberg arrived at 3:35 p.m.  Representative Porter           
 arrived at 4:02 p.m.                                                          
                                                                               
 Number 107                                                                    
                                                                               
 CHAIRMAN PETE KOTT announced the committee would address                      
 confirmation appointments.  He said the intent is to read the                 
 appointees names and which board they are being appointed to.                 
                                                                               
 The first board the committee addressed was the confirmation of               
 Ernie Siemoneit-Healy to the State Board of Registration for                  
 Architects, Engineers, and Land Surveyors.  CHAIRMAN KOTT noted the           
 committee had a copy of Mr. Siemoneit-Healy's resume.  He asked if            
 there was an objection to the appointment.  There wasn't objection.           
 He announced the other nominee was Byron Haynes.                              
                                                                               
 CHAIRMAN KOTT noted he doesn't believe there is anybody signed up             
 to speak in behalf or in opposition to the appointments.                      
                                                                               
 Number 302                                                                    
                                                                               
 REPRESENTATIVE KIM ELTON moved the slate of names for the State               
 Board of Registration for Architects, Engineers, and Surveyors.               
 CHAIRMAN KOTT asked if there was an objection.  Hearing none, the             
 two appointees were moved.                                                    
                                                                               
 Number 329                                                                    
                                                                               
 CHAIRMAN KOTT announced the next two individuals the committee                
 would address would be Dean Nelson and Joanne Stoots appointed to             
 the Alaska State Board of Public Accountancy.  He asked if there              
 was an objection to the appointments.  There wasn't objection.                
                                                                               
 Number 380                                                                    
                                                                               
 REPRESENTATIVE GENE KUBINA moved that the committee move the                  
 appointments to the Alaska State Board of Public Accountancy.                 
 There being no objection, CHAIRMAN KOTT said the appointments will            
 be referred to the committee of the whole.                                    
                                                                               
 Number 415                                                                    
                                                                               
 CHAIRMAN KOTT announced the next appointment would be Beverly                 
 Haywood to the Board of Clinical Social Work Examiners.  He asked             
 if there was an objection to Ms. Haywood's appointment.  There                
 wasn't objection.                                                             
                                                                               
 Number 444                                                                    
                                                                               
 REPRESENTATIVE ELTON moved the Governor's appointee, Beverly                  
 Haywood, to the Board of Clinical Social Work Examiners.  CHAIRMAN            
 KOTT asked if there was an objection.  There being no objection,              
 Chairman Kott said that member has been moved forward.                        
                                                                               
 Number 470                                                                    
                                                                               
 CHAIRMAN KOTT announced the next appointment would be Mary Seutter            
 to the Board of Dispensing Opticians.  He asked if there was an               
 objection to this appointment.  There wasn't objection.                       
                                                                               
 Number 482                                                                    
                                                                               
 REPRESENTATIVE KUBINA made a motion to move the nomination of Mary            
 Seutter to the Board of Dispensing Opticians.                                 
                                                                               
 Number 492                                                                    
 CHAIRMAN KOTT asked if there was an objection to moving the                   
 nomination of Mary Seutter to the full body.  Hearing none, that              
 member was moved.                                                             
                                                                               
 Number 508                                                                    
                                                                               
 CHAIRMAN KOTT announced the next member was Raymond Smith to the              
 Alaska Labor Relations Agency.  He said he will hold this                     
 appointment until the committee receives some further information             
 from Dwight Perkins, Department of Labor.  There is a requirement             
 in statute not to have any more than three members from a party.              
 Chairman Kott said the committee isn't sure if he is affiliated               
 with a party.                                                                 
                                                                               
 Number 515                                                                    
                                                                               
 CHAIRMAN KOTT announced the next appointments up for consideration            
 were Dan Hensley, John Klepper, Bernie Smith and Michael Spence to            
 the Board of Marine Pilots.  He asked if there was an objection to            
 these appointees.  There wasn't objection.                                    
                                                                               
 Number 565                                                                    
                                                                               
 REPRESENTATIVE ELTON moved the Governor's nominees to the Board of            
 Marine Pilots.                                                                
                                                                               
 CHAIRMAN KOTT asked if there was an objection to moving the                   
 nominees.  Hearing none, he announced those members were moved.               
                                                                               
 Number 583                                                                    
                                                                               
 CHAIRMAN KOTT said the next appointments up for consideration were            
 for Mercy Dennis, Dixie Hood and Sandra Samaniego to the Board of             
 Marital and Family Therapy.  He asked if there was an objection.              
 There wasn't objection.                                                       
                                                                               
 REPRESENTATIVE KUBINA made a motion to move the Governor's nominees           
 to the Board of Marital and Family Therapy.                                   
                                                                               
 CHAIRMAN KOTT asked if there was an objection.  Hearing none, he              
 announced those nominees would move forward.                                  
                                                                               
 Number 632                                                                    
                                                                               
 CHAIRMAN KOTT announced the next nominees the committee would                 
 address would be Dorothy Bradshaw and Philip Ulmer to the Alaska              
 Worker's Compensation Board.  He asked if there was an objection.             
 There wasn't objection.                                                       
                                                                               
 Number 707                                                                    
                                                                               
 REPRESENTATIVE BEVERLY MASEK moved to pass the Governor's                     
 appointees to the Alaska Workers' Compensation Board.                         
                                                                               
 CHAIRMAN KOTT asked if there was an objection.  Hearing none, those           
 members were moved.                                                           
                                                                               
 REPRESENTATIVE ELTON referred to there being more nominees to the             
 Alaska Workers' Compensation Board.                                           
                                                                               
 CHAIRMAN KOTT noted those additional members would be before the              
 committee the following Monday.                                               
                                                                               
 Number 820                                                                    
                                                                               
 CHAIRMAN KOTT informed the committee the next nominee the committee           
 would address would be Raymond Smith to the Alaska Labor Relations            
 Agency.  He said based on the research by Mr. Perkins, Mr. Smith is           
 nonpartisan.  Chairman Kott asked if there was an objection to Mr.            
 Smith's appointment.  There wasn't objection.                                 
                                                                               
 Number 868                                                                    
                                                                               
 REPRESENTATIVE KUBINA made a motion to move the Governor's nominee            
 to the Alaska Labor Relations Agency.  Hearing no objection, Mr.              
 Smith was moved.                                                              
                                                                               
 HB 414 - MANDATORY MEDIATION/DESIGN PROF LAWSUITS                           
                                                                               
 Number 900                                                                    
                                                                               
 CHAIRMAN KOTT announced the committee would hear HB 414                       
 "An Act requiring conciliation panel review in a civil action                 
 against an architect, engineer, or land surveyor; and providing for           
 an effective date."  He asked the sponsor to give an overview of              
 the proposed committee substitute                                             
                                                                               
 Number 952                                                                    
                                                                               
 JEFF LOGAN, Legislative Assistant to Representative Joe Green,                
 prime sponsor of HB 414, informed the committee members they should           
 have a new work draft, Version M, dated 02/20/96.  He noted there             
 are two very minor changes in the work draft.                                 
                                                                               
 MR. LOGAN referred the last meeting on the measure and said                   
 Representative Rokeberg had asked if there wasn't some type of a              
 choice for an election at the beginning of the process.  Mr. Logan            
 said after speaking with the design professionals, the drafter and            
 others involved in the process, that is the way the bill remains.             
 There is no election, it's mandatory.  If you were going to file              
 against a design profession, you'd go through this process.                   
                                                                               
 MR. LOGAN said Representative Elton had asked why the process                 
 proceeds without discovery or before discovery can occur.  He                 
 explained that has been addressed in one of the two changes in the            
 proposed committee substitute.  Mr. Logan said Representative Elton           
 also asked about why there is a design professional on the panel.             
 He said throughout the statutes there are examples of when a                  
 professional person is on a panel.  If a case involving a design              
 professional is being heard by a panel, it is common to have a                
 member of that profession on the panel.                                       
                                                                               
 Number 1068                                                                   
                                                                               
 MR. LOGAN informed the committee that Representative Elton had a              
 question relating to a section of the previous version of the bill            
 where a design professional could waive the mediation process                 
 within seven days of being notified that a claim had been filed               
 against him or her.  He noted that is another change made.  It now            
 reads that the mediation process is mandatory for both parties, the           
 claimant and the design professional.  There is no way for the                
 design professional to get out once the claim is filed unless it is           
 mutually agreed to by both parties.                                           
                                                                               
 MR. LOGAN said there was also a question by Representative Elton              
 about the hearings being closed to the public.  After discussion              
 with the parties involved and the drafter, it seemed perfectly                
 appropriate to keep the proceeding closed and they have done so.              
                                                                               
 Number 1145                                                                   
                                                                               
 MR. LOGAN said he would review Version M.  The first change is on             
 page 2.  He referred to Article 9, which begins on line 6, and said           
 in the previous version of the bill there was subsections (a) and             
 (b).  Subsection (a) is currently in the new version on lines 7, 8,           
 9 and 10.  He said subsection (b) was the language that allowed the           
 design professional seven days to opt out.  That language is gone.            
 The design professional can no longer opt out of the process.                 
                                                                               
 Number 1172                                                                   
                                                                               
 MR. LOGAN explained the next change in on page 5, lines 16, 17 and            
 18.  There was a question from Representative Elton as to why there           
 is no discovery.  He said basically, about 25 percent of the claims           
 are for personal injury and 75 percent are between contractors,               
 design professionals and building owners.  In those cases, the                
 facts are well known to all the parties.  Usually those are                   
 situations where correspondence has been traded back and forth.  In           
 the cases where there is a personal injury or death claim, a                  
 provision has been inserted on page 5, line 17, where discovery can           
 be conducted under the new Alaska rule of civil procedures called,            
 "Immediate Mandatory Discovery."  Mr. Logan said, "It's basically             
 give me everything you've  got, I'll give you everything I got,               
 we're going to do it right away, it's not a long drawn out                    
 process."  That is the provision included in the bill for                     
 discovery.                                                                    
                                                                               
 Number 1288                                                                   
                                                                               
 COLIN MAYNARD, Legislative Liaison Chair, Alaska Professional                 
 Design Council, came before the committee to address HB 414.  He              
 informed the committee that the council has worked with                       
 Representative Green's office to answer some of the concerns that             
 were raised by the committee.  In terms of discovery, the trial               
 attorneys are still trying to work on the indigent issue and how it           
 will be handled.  They are going to try and get some language from            
 the court system.  Mr. Maynard said it is something that is not               
 going to happen very often.  He explained 75 percent of the cases             
 are brought up by owners and contractors would have a hard time               
 proving indigency.  Out of the 25 percent left, most of those were            
 workmens' comp cases where the workmens' comp actually ran out.               
 They then went after the design professional which is a practice              
 that is no longer legal.   Designers now have an exemption from               
 that kind of lawsuit.                                                         
                                                                               
 MR. MAYNARD said there has been some concern that this could drag             
 out forever.  There is a very specific time line in the bill where            
 within 30 days you'll be notified and within 30 days after that,              
 there will be a hearing.  Within 30 days after that there has to be           
 a decision.  This isn't something that'll drag out for years and              
 years.  Mr. Maynard said there is also a provision which states               
 that the statute of limitations tolls while that is going on.  So             
 as soon as the claim is filed, the clock on the statute of                    
 limitations stops and doesn't start again until after the decision            
 is filed or six months after this process starts.  The plaintiff is           
 protected having his statute of limitations rights.  The design               
 professional can't stall and stall and try to get past the statute            
 of limitations.                                                               
                                                                               
 Number 1407                                                                   
                                                                               
 REPRESENTATIVE ELTON questioned where the definitive time                     
 limitation language is.                                                       
                                                                               
 MR. MAYNARD indicated it is on page 2, line 16, "Within 10 days               
 after receiving a claim, the department shall provide notice of the           
 claim..."  He then referred to line 18, "The notice must include a            
 date, at least 10 but not more than 20 days after mailing the                 
 notice, within which a design professional against whom a claim is            
 made may file a written response..."  Mr. Maynard said it would be            
 30 days by the time the response is back.  He referred to line 30,            
 and said 15 days after the response is returned, they form a panel.           
 Mr. Maynard referred to page 3, line 27 and said within five                  
 business days after the panel is formed, the panel shall give                 
 notice of the hearing, which would be at least 15 but not more than           
 30 days after that.  The maximum is 65 days for the hearing.  The             
 hearing is an informal hearing and will last a day or two.  The               
 parties will review the facts and come to a quick determination as            
 to whether there is merit or not.                                             
                                                                               
 MR. MAYNARD referred to the panel's decision and page 5, line 30,             
 and said within 15 days after the completion of the hearing, the              
 panel shall file a written advisory opinion.  So there is                     
 essentially 65 days until the hearing, you have a hearing of couple           
 of days and 15 more days after that, the panel has to file their              
 decision.                                                                     
                                                                               
 Number 1509                                                                   
                                                                               
 CHAIRMAN KOTT referred to the time elements and asked if it would             
 be a mixture of both work days and running consecutive days.                  
                                                                               
 MR. MAYNARD explained there is a new section which specifies the              
 days on page 8, line 8, "COMPUTATION OF TIME."                                
                                                                               
 Number 1535                                                                   
                                                                               
 MR. LOGAN gave committee members a copy of the statute.                       
                                                                               
 Number 1548                                                                   
                                                                               
 REPRESENTATIVE ELTON asked what would happen if one of the parties            
 wants to bring in an expert witness and that expert witness isn't             
 available for 15 days.  He said the time lines have limited almost            
 everything except the length of the hearing.  Representative Elton            
 indicated this is a complicated process, and some of them will be,            
 whether it is a lack of a guard rail on a bridge or the collapse of           
 a school roof.  He said he is skeptical that hearings can be                  
 accomplished within one or two days.  He said he is more skeptical            
 that when you're paying somebody per diem and a flat fee of $300,             
 they're going to be working quickly to issue a written opinion.  If           
 someone has planned a trip to Mexico, that is going to take some              
 precedence over the issuance of an opinion from the design review             
 panel.  He asked Mr. Maynard what he could say to assure him that             
 wouldn't happen or couldn't happen.                                           
                                                                               
 MR. MAYNARD said he didn't know that it couldn't happen.  He                  
 pointed out that the reports he has read from the Department of               
 Commerce in the state of Hawaii, hasn't cited any instances of that           
 kind of a problem.  He referred somebody that may want to bring in            
 a specific expert witness, and said part of the thing is that                 
 nobody would have those witnesses lined up.  You file a claim and             
 get going.  Most of the expertise would be on the panel.  If there            
 was a particular technical issue where you needed some kind of                
 expertise, the panel could bring in somebody that is an expert in             
 that field.  They could subpoena them if they didn't want to come.            
 If the parties wanted to get a particular person and everybody                
 agreed to it, they could postpone the hearing until that person was           
 available.  It would be a mutually agreeable event.  It wouldn't be           
 something where one party could try to stall the whole operation.             
                                                                               
 MR. MAYNARD recalled a construction case he heard about where a               
 school burned down because some kids were playing with some                   
 lighters under the school.  The school district sued the                      
 contractor, the designers, the barge company that carried all the             
 material and the material suppliers.  Most of those people had                
 nothing to do with the fact that the school burned down, the barge            
 suppliers certainly didn't.  The legislation would take those                 
 people out so they don't have to spend the $10 or $20 thousand                
 covering all the depositions, etc., and get to the people who are             
 really at fault.                                                              
                                                                               
 Number 1735                                                                   
                                                                               
 REPRESENTATIVE ELTON said it seems to him that what happens in                
 court may be the same thing that happens during a mediation                   
 process.  The other way of saying that is the school district or              
 the plaintiff, in this case, may say, "We're going to make this as            
 difficult as possible and we want somebody from the barge company             
 there and we want somebody from, you know, so and so there because            
 they will back up our claims."   He pointed out that sometimes it             
 is the intimidation factor that is at work as well as the process             
 of getting to the truth.  There is nothing in the bill that                   
 precludes that from happening.  Representative Elton referred to              
 cost control and explained another problem he has with the bill is            
 the cost of this process is going to be borne equally by the                  
 parties.  One of the things that may happen is somebody with deep             
 pockets or somebody that has an insurance company with deep pockets           
 is going to say, "O.K., lets bring in these special witnesses and             
 we're going -- this is going to be an intimidation factor because             
 (indisc.) the plaintiff is going to see the costs mounting and say,           
 `Hey, O.K. I give,'" if they have to bear the costs of the trial.             
                                                                               
 MR. MAYNARD pointed out the costs are only borne equally if there             
 is really no determination, one way or the other, about who is to             
 blame.  If there is determination that the case has no merit, then            
 the plaintiff will be on the hook for those costs.  If there is a             
 determination that there is merit, then the defendant is on the               
 hook for the costs.  He noted the panel members are running the               
 procedure and they're not going to be interested in sitting there             
 and listening to ten expert witnesses telling them the same thing.            
 Mr. Maynard said part of the problem with lawsuits in his field of            
 work is that the frivolous suits are placed with no intention of              
 ever getting court, 95 percent of the cases never get to court.  He           
 also noted in about 80 percent of the cases against design                    
 professionals they never have to pay out to the defendant.  What              
 the frivolous suit is intending to do is make it so onerous on the            
 defendant that it is cheaper to pay the plaintiff off to make him             
 go away than it is to drag it through court and hope that you get             
 the facts out so the jury understands it.  The judge then will give           
 you his attorney fees or a portion of them.  It isn't worth the               
 trouble, you pay them off and tell them to go away.  Going before             
 the panel will be a much cheaper version.                                     
                                                                               
 REPRESENTATIVE ELTON explained there is nothing in the bill that              
 gives the panel the power to say, "O.K., you can't have an                    
 attorney."  There is nothing that gives the panel the power to say,           
 "You cannot call that witness."                                               
                                                                               
 MR. MAYNARD  said he thinks there is.  REPRESENTATIVE ELTON  said             
 he is interested to know where it prohibits that.  Mr. Maynard said           
 it doesn't specifically prohibit it, but on page 4, line 13, "A               
 panel hearing shall be informal."  He read from line 16, "The panel           
 may receive oral or documentary evidence."  Mr. Maynard read from             
 line 19, "The panel may designate who, among the parties, shall               
 have the burden of going forward with the evidence with respect to            
 the issues it may consider."  Basically, they have the power to               
 say, "O.K., you bring your witnesses."  They also have to the power           
 to say, "O.K., lets hear from this side now and is there anything             
 else you need to tell us."  The panel basically controls the                  
 hearing.  It's not a trial.  It is more of an informal arbitration            
 mediation type process.                                                       
                                                                               
 Number 1995                                                                   
                                                                               
 REPRESENTATIVE ELTON said he reads the language completely                    
 different.  He said he reads it as one of the parties has the                 
 burden and it's up to the parties to fulfill that burden.  They may           
 fulfill that by asking their attorney to be there or by asking that           
 witness to be there or be flown in to be there.  It says the panel            
 may designate who among the parties, but it doesn't say how they              
 must present their case.  Representative Elton said if he were on             
 the panel, he wouldn't look at the bill as giving him the ability             
 to limit who can appear before the mediation panel as long as one             
 of the parties wants to bring the person before them.                         
                                                                               
 Number 2032                                                                   
                                                                               
 REPRESENTATIVE ROKEBERG referred to the previous hearing on the               
 bill and said there was discussion regarding some bypasses in the             
 event that there was a threshold met of the amount of claim.  He              
 noted there are some methods for that in the state of Hawaii.  He             
 referred to the current draft and asked if there is any kind of a             
 dollar threshold that allow the litigants to go right into superior           
 court.                                                                        
                                                                               
 MR. MAYNARD explained the experience in Hawaii is that very few of            
 the cases met that limit.  He then said actually they don't have a            
 specific limit.  They said if the amount is too big, they can go              
 straight to court and not go through the panel process.  So,                  
 something like 126 out of 133 cases never went to a panel.  He said           
 he doesn't see the point in having a panel if nobody has to go                
 through it.  Mr. Maynard referred to there being an option for the            
 design professional to opt out which is something that never                  
 occurred in Hawaii even though they had that option.  There was a             
 concern that it wasn't fair for the professional to have that                 
 option.  That was taken out of the bill, so basically, everybody              
 goes through this process.  Once you've gone through the panel                
 process and you don't like the result of the panel's decision, you            
 can go on to court.                                                           
                                                                               
 Number 2288                                                                   
                                                                               
 REPRESENTATIVE KUBINA asked who pays the $750.  He questioned                 
 whether it would be everybody who is listed.  He said the claimant            
 has to pay.  He asked if there were five different architects                 
 listed each one would have to put up $750.                                    
                                                                               
 MR. MAYNARD said it's not (indisc.), but he doesn't see any problem           
 with that happening.  It could be clarified.                                  
                                                                               
 Number 2308                                                                   
                                                                               
 REPRESENTATIVE KUBINA referred to page 2, lines 25, 26 and 27 of              
 the proposed committee substitute, "If the design professional                
 fails to deposit the funds required by this subsection, the                   
 claimant may proceed with a civil action..."  In other words, if              
 the architect doesn't want to pay the money, then the person who is           
 filing the claim has to take them to court to get them to put up              
 their money.                                                                  
                                                                               
 MR. MAYNARD said it is saying that if the design professional                 
 doesn't pay the money and respond, then they don't have to go                 
 through this procedure and they can take the case to court.  The              
 design professional can't stall and not be responsive.  He has a              
 duty to cooperate with this function.  If he is not cooperative, he           
 doesn't get the benefit of the review panel and the case goes to              
 court.                                                                        
                                                                               
 REPRESENTATIVE KUBINA asked if that was the same as the original              
 bill.                                                                         
                                                                               
 MR. LOGAN indicated it was.                                                   
                                                                               
 REPRESENTATIVE KUBINA said he thought this forces people to go                
 through this process and if they didn't, they would actually lose             
 their license.                                                                
                                                                               
 MR. MAYNARD said the loss of a license is in a different section.             
 If you've gone through the panel process and the funds that are               
 deposited don't cover all the expenses and it is found that the               
 suit had a merit, then the design professional will have to come up           
 with the difference.  If he doesn't come up with a difference, then           
 he would lose his license.                                                    
                                                                               
 REPRESENTATIVE KUBINA said the claimant has to go through this but            
 the person who is being accused does not.                                     
                                                                               
 MR. MAYNARD said he guesses in essence that is what it says.  He              
 then clarified the claimant has to go through this process if the             
 design professional is unresponsive.  He doesn't get the protection           
 of this and they go right to court.                                           
                                                                               
 REPRESENTATIVE KUBINA questioned why this is even being done if the           
 design professional can just ignore it and then the person has to             
 file in court anyway.  He asked why even make them go through this            
 process.                                                                      
                                                                               
 MR. MAYNARD said he doesn't think there will be very many cases               
 where the design professional would not be responsive.  Basically,            
 this procedure is set up to cut his costs and it would be sort of             
 "cutting off you nose despite your face," to not go through this to           
 try to cut the costs of the lawsuit.  If the case had merit, you'd            
 probably want to settle.  Mr. Maynard explained that if somebody              
 decided to not pay, you'd then haul them to court and go through              
 the normal process.                                                           
                                                                               
 Number 2455                                                                   
                                                                               
 REPRESENTATIVE ELTON said he thinks it is slick bill writing.                 
 There was testimony that it would be a mandatory process for both             
 the design professional and for the claimant.  Now it is no longer            
 mandatory because it can go straight to court if the design                   
 professional says he/she is not going to pay the $750.  This is not           
 mandatory for the design professional.                                        
                                                                               
 MR. MAYNARD said it wasn't intentional.  He said they just didn't             
 realize that that portion provided an out.  It is more of a                   
 protection for...[End of Tape]                                                
                                                                               
 TAPE 96-11, SIDE B                                                            
 Number 001                                                                    
                                                                               
 REPRESENTATIVE ELTON said it does give the plaintiff the right to             
 decide whether or not they want to go through the mediation                   
 process.                                                                      
                                                                               
 MR. MAYNARD said in essence, it does.                                         
                                                                               
 Number 017                                                                    
                                                                               
 REPRESENTATIVE BRIAN PORTER explained the first thing that came to            
 his mind when he read the bill was a concern that was dealt with in           
 the tort reform bill which was the Turner Construction v. Scales              
 case that dealt with the statute of repose.  It established a                 
 suspected class and omitted the other construction elements and the           
 court said that wasn't good -  unconstitutional.  He said he thinks           
 that the out is to address that concern.  The voluntary nature of             
 the process, in general, might be the out as it only effects design           
 professionals as opposed to contractors.                                      
                                                                               
 Number 056                                                                    
                                                                               
 REPRESENTATIVE ELTON asked if the voluntary out has to be equally             
 available to both parties or if it only applies to one party.                 
                                                                               
 REPRESENTATIVE PORTER said as he understands the bill, it applies             
 to both.                                                                      
                                                                               
 REPRESENTATIVE ELTON said he thinks the voluntary out would only              
 apply to the design professional.                                             
                                                                               
 REPRESENTATIVE PORTER said he thought it would also apply to the              
 plaintiff.                                                                    
                                                                               
 Number 081                                                                    
                                                                               
 MR. MAYNARD said there isn't a voluntary out for the plaintiff,               
 mainly because this wouldn't act much as a deterrent if you could             
 just say, "I don't want to do it."  It doesn't cut the cost to the            
 court system.  It doesn't reduce the frivolous suit.  Part of the             
 point is to cut down the number of frivolous suits by making them             
 more onerous.  He noted in California when similar legislation was            
 passed the number suits went down 25 percent.  If the design                  
 professional gets a (indisc.--coughing) he has liability, then                
 there is no interest on his part to drag this out.  He would want             
 to get this settled so there wouldn't be the long process.  The               
 cost of the panel also gets thrown in.                                        
                                                                               
 Number 178                                                                    
                                                                               
 REPRESENTATIVE JOE GREEN, sponsor of HB 414, said, "It is something           
 to the effect that because if the - if the defendant decides he               
 doesn't want to pony up his portion of this, that in effect is                
 saying that he has an out that he can go straight to court.  This             
 is not the court hearing we're having, this is an intermediate                
 process, and I don't see that's necessarily a negative.  Lets                 
 supposing that it isn't -- it absolutely is frivolous and rather              
 then waste a bunch of time, he just says, `O.K., I'm not gonna pay            
 up, we'll go to court and settle it there,' or it may be just the             
 opposite.  It may be a very big issue and he would not want to                
 hesitate in this process because he knows there isn't gonna be...             
 I mean we're talking about a very few number of cases now.  Most,             
 as the history shown, most all the cases are gonna be resolved                
 either before or during this process and not end up going to court,           
 but you're bringing up the `what if case,' the strange case, and              
 I'm submitting to you that that may be one of those who says,                 
 `O.K., it's so frivolous or it's so big we want to go to court.'              
 So why waste time here, whereas most of the cases it's not a waste            
 of time, it is actually expedient."                                           
                                                                               
 Number 226                                                                    
                                                                               
 REPRESENTATIVE ELTON said he thinks the goal is absolutely                    
 laudatory.  He said he thinks we should be diverting a lot to the             
 mediation process and not just for design professionals.  Part of             
 the problem is the mandatory nature for the claimant and the                  
 voluntary nature for the defendant.  He said he thinks mediation              
 should be the goal, but each party should have an equal opportunity           
 to either participate in that process or to get out of that                   
 process.  Representative Elton said he was somewhat encouraged when           
 a previous testifier said the bill has been redrafted to allow that           
 to happen.  The language is kind of a "back door way" for it to be            
 voluntary for one party.  He said he thinks that an assumption is             
 being made that may not be really based on reality.                           
                                                                               
 REPRESENTATIVE ELTON referred to the children who burned down the             
 school and said he doesn't think the school district just                     
 arbitrarily said, "O.K., we're going to sue twelve people and we're           
 going to go for the deepest pockets."  He said he thinks they                 
 probably made that decision in conjunction with their attorney.  In           
 that case, the attorney's advise is going to be the same whether it           
 is part of a civil court or part of the mediation.                            
                                                                               
 Number 364                                                                    
                                                                               
 REPRESENTATIVE GREEN said Representative Elton covered two issues,            
 one is what is to prevent this from dragging on because they can't            
 reach a conclusion.  That is covered in the bill.  If you can't               
 reach a conclusion, that is one of the outs.  Then the cost is                
 shared and they go to court.  They tried, they couldn't come to a             
 conclusion, so it goes on to court.  There are four different                 
 issues in the bill that are covered, the plaintiff wins, the                  
 defendant wins, you can't make a decision or it's frivolous.  He              
 indicated that he would have to stop and think if it is really                
 worth it, as a frivolous lawsuit, that he may end up paying the               
 whole thing but certainly if he thinks he has a case against a                
 person as a designer, he would go through the process and find out            
 if he really has a case.                                                      
                                                                               
 Number 452                                                                    
                                                                               
 REPRESENTATIVE KUBINA referred to page 2, line 32, "A panel shall             
 consist of one individual acting as the chair, selected from among            
 individuals who are familiar with and experienced in the tort                 
 claims settlement process, one attorney licensed in this state and            
 experienced in trial practice, and one design professional."  He              
 said he doesn't understand the wording.  Somebody would be acting             
 as a chair and then the department is going to appoint a chair                
 later on.  He said that language is very confusing.                           
                                                                               
 REPRESENTATIVE KUBINA asked referred to page 2, lines 24 and 25 and           
 asked if the per diem amount is (indisc.--coughing) fiscal note.              
                                                                               
 Number 0555                                                                   
                                                                               
 MR. MAYNARD said that is included in the fiscal note.  He noted he            
 thinks there is a zero fiscal note.                                           
                                                                               
 REPRESENTATIVE GREEN indicated the fiscal note is not a zero fiscal           
 note.  He said this will be paid for either mutually or by the                
 loser.  Representative Green said he believes the fiscal note has             
 to do with the pass through.  There is going to be some amount of             
 money that the department would get in from the loser and then pay            
 out to this person.  He also pointed out that the panel is                    
 impaneled from a judge who would be covering the first part                   
 Representative Kubina asked about, someone that is familiar with              
 court proceedings.                                                            
                                                                               
 MR. MAYNARD said the chair is appointed by the department.  He                
 referred to the phrase, "Individuals who are familiar with and                
 experienced in the tort claims settlement process," and said they             
 envision that as a mediator, arbitrator or another attorney, or               
 somebody with tort claim settlement experience.                               
                                                                               
 Number 596                                                                    
                                                                               
 REPRESENTATIVE KUBINA asked how long the acting chair would be                
 chairman.                                                                     
                                                                               
 MR. MAYNARD responded it would only be for the life of the panel              
 because one panel is appointed for each case.                                 
                                                                               
 REPRESENTATIVE KUBINA agreed.  He said he is isn't sure why there             
 would be an acting chair when the department also appoints a chair.           
                                                                               
 REPRESENTATIVE GREEN said acting as the chair of the group.  He               
 said, "You have been appointed and so you're gonna act as chair,              
 but you're gunna be there throughout this thing.  It's not that               
 you're acting until something else happens.  You're doing the job             
 of chair instead of using the word acting.  One will be doing the             
 job as a chairman."                                                           
                                                                               
 Number 637                                                                    
                                                                               
 REPRESENTATIVE KUBINA said he understands that, but the very next             
 sentence says, "The chair shall be appointed by the department."              
                                                                               
 REPRESENTATIVE GREEN said, "It says O.K. where this guy comes from            
 who is acting as the chair of the committee."                                 
                                                                               
 REPRESENTATIVE KUBINA explained the bill also says that the panel             
 may deny the person his legal counsel if the panel so desires on              
 page 4, line 8, "A person, other than the panel, witnesses,                   
 consultants called by the panel, and the persons listed in AS                 
 09.55.740, may not be present at a panel hearing except with the              
 permission of the chair."                                                     
                                                                               
 MR. MAYNARD noted 09.55.740, on page 5, line 28, lists the council.           
 He read, "REQUIRED PANEL ATTENDANCE.  (3) counsel representing the            
 parties, if any."                                                             
                                                                               
 REPRESENTATIVE KUBINA said unless excluded by the panel.  He                  
 questioned why the panel has the right to exclude somebody's                  
 attorney.  He said it is on page 5, line 22, "Unless excluded or              
 excused by the panel, the following persons shall attend..."                  
 Representative Kubina questioned why they have to right to exclude            
 an attorney.  He said it doesn't make sense to him.                           
                                                                               
 MR. MAYNARD said he would find out why that language is included.             
 He noted it is from the national law.                                         
                                                                               
 Number 774                                                                    
                                                                               
 REPRESENTATIVE KUBINA explained the bill does not specifically say            
 that the claimant or their attorney can cross examine.  It says on            
 page 4, lines 18 and 19, "the panel may, in its discretion, permit            
 a party or counsel for a party to question other parties,                     
 witnesses, or consultants."  You don't even have the absolute right           
 to ask questions.  He noted the panel is dominated by basically two           
 attorneys and a design professional.  He asked if isn't an absolute           
 right that you'd be able to cross examine a person.                           
                                                                               
 REPRESENTATIVE KUBINA referred to page 5, lines 16 and 17, "the               
 parties may not conduct discovery."  He said he thought that from             
 earlier discussion that they were going to ensure that discovery              
 took place at the very beginning, immediately.                                
                                                                               
 MR. MAYNARD said for the 75 percent of the cases where owners and             
 contractors are involved in the construction and you know the facts           
 and you know why they're suing, there isn't a discovery process.              
 For the case where the guy slips on the sidewalk or the building              
 falls on his head, then there is the immediate mandatory discovery            
 that is allowed by court rules because they don't know what is                
 going on.  They don't know if this guy screwed up or not.  This               
 will give them a chance to look at the records and find out if they           
 did.  He said there is no reason to go through the process with the           
 contractors and owners because they already know what the issues              
 are.  They already have the information.                                      
                                                                               
 REPRESENTATIVE KUBINA read, "except for when it involves injury or            
 death, the parties may not conduct discovery."  He said he is                 
 unclear of what the ramifications of that are.  Representative                
 Kubina said that when Mr. Maynard visited his office, he talked               
 about including a section for the indigent and asked if it has been           
 included in the bill.                                                         
                                                                               
 Number 922                                                                    
                                                                               
 MR. MAYNARD indicated it has not been included in the bill because            
 he hasn't received information from the court system as to how they           
 currently handle it.  He said he thought it was something the                 
 Judiciary Committee could handle once the information is received.            
                                                                               
 REPRESENTATIVE KUBINA said he has great respect for the chairman of           
 the Judiciary Committee, but not getting answers in the Labor and             
 Commerce Committee would be leaving it up to someone else to deal             
 with.  He said his last point is that he would also like to see a             
 sunset clause so that there would be a three year period to see how           
 it would work.                                                                
                                                                               
 Number 989                                                                    
                                                                               
 REPRESENTATIVE PORTER explained he is familiar with mediation                 
 arbitration procedures and in a very general sense, some of the               
 apparent reductions in due process are purposeful because if you              
 include it in the mediation process, every due process step you               
 have in court, you would change the location of the trial.  You               
 haven't affected a resolution process that can cost less, take a              
 shorter period of time and still, hopefully, reach an equitable               
 decision.  That is what mediation arbitration is all about.  You              
 just can't do everything that you're going to do in court or you              
 haven't really accomplished anything.                                         
                                                                               
 REPRESENTATIVE GREEN referred to Representative Porter's point and            
 said discovery is one of those issues.  He said when you get into             
 discovery, it is a time vacuum and it goes on and on and on.  In              
 most cases, discovery is a method of looking at files.                        
                                                                               
 Number 1093                                                                   
                                                                               
 REPRESENTATIVE ROKEBERG suggested instead of having a sunset                  
 clause, they should report back to the legislature in two years.              
                                                                               
 MR. MAYNARD pointed out that there is a required report in the                
 bill.                                                                         
                                                                               
 REPRESENTATIVE ELTON asked if there is a requirement that testimony           
 be given under oath.  He explained the reason he asked is because             
 if a person is going to go through this process and if it is                  
 advantageous for either party to lie, you can't make a rational               
 decision on whether to proceed beyond the mediation process.                  
                                                                               
 Number 1184                                                                   
                                                                               
 REPRESENTATIVE ROKEBERG pointed out on page 4, line 31, it states,            
 "A member of the panel may administer oaths and affirmation,".                
 REPRESENTATIVE ELTON asked if it shouldn't say "shall" instead of             
 "may."                                                                        
                                                                               
 REPRESENTATIVE ROKEBERG pointed out it is an informal proceeding.             
                                                                               
 MR. MAYNARD said it is not meant to be a trial.  It is meant to be            
 an informal mediation arbitration type process that you basically             
 bring the parties together, get the facts, get a read on where the            
 case is and whether it has merit or not, and if it does have merit,           
 decide whether it is against one party or all the parties.                    
                                                                               
 REPRESENTATIVE ELTON said he agrees, but if somebody is allowed the           
 option to perjure themselves and there is no penalty for that or if           
 there is no way of knowing whether or not they have, it would be              
 difficult for a claimant to determine whether or not they have a              
 good enough case to go forward after the mediation process is done,           
 or vice versa.  You need to be able to count on what you hear if              
 you're going to be, at some point, making a decision on whether to            
 proceed beyond the mediation stage.                                           
                                                                               
 REPRESENTATIVE ROKEBERG said there doesn't seem to be much value in           
 having a person swear under oath and then not have a contempt                 
 ability.  He said in the statute itself, it allows the invocation             
 of the appropriate court if there is a breach of the subpoena                 
 process.                                                                      
                                                                               
 REPRESENTATIVE GREEN said he doesn't see that changing "may" to               
 "shall" would weaken it any.                                                  
                                                                               
 MR. MAYNARD said he isn't sure that it exists in the current                  
 arbitration or mediation processes but if that is what the                    
 committee wants, it could be added.                                           
                                                                               
 REPRESENTATIVE GREEN said it could be added to satisfy the concern            
 and then if it is wrong, when the bill gets to the Judiciary                  
 Committee, and if there is a reason it can't be there, it could be            
 removed.                                                                      
                                                                               
 Number 1344                                                                   
                                                                               
 REPRESENTATIVE KUBINA said he isn't sure it does any good because             
 you can't use proceedings for anything else anyway and there is not           
 even a requirement to keep a tape or records.  In fact, it seems to           
 say that the only reason you would is it would be for the panel's             
 benefit and not anybody else.  So if somebody lied, there is                  
 nothing you can do about it anyway.  He said this is part of the              
 problem he has with some of the language.  It seems like it could             
 be set up against the claimant.  He explained he is concerned about           
 the individual person who thinks he/she got a raw deal.  He said he           
 is not so concerned about the contractor who also has the resources           
 to deal with these things.  It is the individual who may not be               
 that sophisticated or wealthy and have the resources that could be            
 set up by the way this process is written.  Representative Kubina             
 said he assumes that if somebody were to file a complaint or a                
 claim that included the contractor and the designer, it couldn't go           
 through this process.  Although the designer may be able to get out           
 of it, the person could still file against the contractor which may           
 be a disadvantage because there is a way to sever one group out.              
                                                                               
 Number 1512                                                                   
                                                                               
 REPRESENTATIVE GREEN said, "Well, I think actually as far as the              
 claimant is concerned, ya, I suppose there is the chance that he              
 can lie.  As we said, either you shall administer the oath, that              
 doesn't necessarily mean that he won't lie if there is no penalty.            
 But as far as the professional is concerned, he is going to be                
 sitting there with another professional whose professional licenses           
 is on the line.  If he says, `Hey, we'll go into cahoots and we're            
 gonna say that this guy who has this claim against you isn't gonna            
 get anything,' I don't think you'll find that in medical boards and           
 other situations where you're judged by your peers, you're                    
 professionalism is so -- almost sacred that you don't risk it for             
 anything because you're putting your professional stamp on this as            
 one of these panel members.  Now if it doesn't go for either one,             
 the claimant says, `Hey, I got a bad back, I know darn well it went           
 there, they said it didn't,' he still has the right to litigation,            
 and this attorney that he got, whether it is contingency or a                 
 certain amount of money as it goes along, he still has that right             
 to sue, because he has been lead to believe he has a very good                
 case, in which case -- if it -- if this arbitration didn't come up            
 with that, they could still go to court.  So I don't see you've               
 sacrificed anything that way.  It just says that `Well, boy, you              
 know I thought maybe we could hoodwink them but I don't think it's            
 gonna work.  We'd better probably pull in.'  That's the kind of               
 stuff this is supposed to avoid."                                             
                                                                               
 REPRESENTATIVE KUBINA said then the claimant would have to deposit            
 additional money if they lost.                                                
                                                                               
 REPRESENTATIVE GREEN said if it was decided that it was frivolous             
 and they lost, they'd have to come up with the additional money               
 over the initial deposit which is as it should be if it is a                  
 frivolous claim.                                                              
                                                                               
 Number 1660                                                                   
                                                                               
 REPRESENTATIVE ROKEBERG moved that the committee substitute for HB            
 414, Version 9-LS1508\M, Ford, 2/21/96, be adopted.                           
                                                                               
 CHAIRMAN KOTT asked if there was an objection.  Hearing none,                 
 Chairman Kott said the committee substitute is before the                     
 committee.                                                                    
                                                                               
 Number 1689                                                                   
 RUSS WINNER testified via teleconference from Anchorage.  He noted            
 he was giving testimony on behalf of the trial lawyers.  Mr. Winner           
 explained the trial lawyers are generally supportive of legislation           
 or any efforts to resolve litigation early.  The (indisc.) Bar is             
 not interested in delaying or dragging litigation out.  They are              
 interested in early resolution of litigation.  He said they support           
 the purpose of the bill, however, for the reasons that he testified           
 to on February 7, the current version has the same problems that              
 were present in the earlier draft.  He said it appears to be                  
 special interest legislation favoring the design professionals                
 alone.  He said he believes that there could be constitutional                
 problems.  The bill imposes unnecessary roadblocks in going forward           
 with resolution of a case.  Mediation is a good idea but the way              
 that it is set up in the bill seems to have the effect of being an            
 obstacle rather than to encourage mediation and resolution of the             
 case.  He said it seems to his organization that a great majority             
 of cases that are filed are not frivolous lawsuits.  It was                   
 suggested that because 95 percent of all cases that are filed don't           
 actually go to trial, it was indicated that it is really an                   
 indication of the number of frivolous lawsuits that are filed.  He            
 said that is correct as he has settled nearly all the cases he has            
 handled.  Mr. Winner noted he doesn't take frivolous cases, but               
 when the cases he takes settle, they generally settle for a                   
 significant amount of money.  That is not because they're                     
 frivolous, but because the plaintiff, defendant and their counsel             
 have reached an agreement to solve the case without going into a              
 trial before a jury.  The fact that 95 percent of those civil cases           
 settle is not a reflection of the fact that there are a large                 
 number of frivolous lawsuits filed.  It is a reflection of the fact           
 that plaintiffs, counsel, defense counsel and the litigants make an           
 effort to and are generally successful in settling the lawsuit                
 somewhere in the course of the legal proceeding that takes place              
 between the time of filing a lawsuit and the time the jury is                 
 empaneled.                                                                    
                                                                               
 MR. WINNER said his organization believes that the panel, as                  
 constituted, would be a biased panel for the reasons that he                  
 testified on the earlier version of the bill.  He said they also              
 believe that there is insufficient payment that's being offered to            
 the panel members and it will be difficult to attract people and              
 have an effective panel.                                                      
                                                                               
 MR. WINNER referred to the change that was mentioned in Section 2,            
 AS 09.55.700, which dropped the provisional line that it's not                
 professional to wave conciliation and said he doesn't know why that           
 was done.  He said it isn't clear to him if both the plaintiff and            
 the design professional wished to waive mediation, that is                    
 something that could be accomplished.  That is simply not clear in            
 the current version of the bill.                                              
                                                                               
 MR. WINNER said the other change that appears in the bill is that             
 it allows discovery during the mediation process for personal                 
 injury cases or wrongful death cases, but apparently not for                  
 property damage or commercial cases.  Mr. Winner said the way the             
 bill is worded, it is not clear to him what is intended.  The rules           
 of discovery include rules 26 through 37.  He pointed out only rule           
 26 deals with the mandatory exchange of discovery.  It is a new               
 rule and has only been on the books for several months.  Mr. Winner           
 said the if intent of the bill is to apply only rule 26, the                  
 mandatory exchange of discovery, then he would suggest the bill be            
 clarified to say that.  If that is what is intended, why not wait             
 until suit is filed and until after the mandatory discovery                   
 normally takes place under rule 26 before the mediation takes                 
 place.  He questioned why require mediation before suit is filed.             
                                                                               
 MR. WINNER said what this bill constitutes or involves is a change            
 in the court rules.  He referred to Article 4, Section 15 of the              
 Alaska Constitution, this bill would require a two-thirds vote by             
 both bodies.  The bill has the effect of changing civil rule 100              
 which calls for mediation.  It allows the court to order the                  
 parties to enter mediation after a suit has been filed.  This bill            
 would require mediation before suit is filed.  It is, in effect, a            
 change in the court rules.  Also, civil rules 26 through 37 are the           
 discovery rules.  They are invoked after suit is filed.  Mr. Winner           
 said the bill invokes at least rule 26 before suit is filed.                  
                                                                               
 MR. WINNER said the stated purpose of the bill is to cut down on              
 frivolous lawsuits.  He said he hasn't seen any statistics that               
 indicates that there is a large number of frivolous lawsuits filed.           
 He said he has no doubt that it happens on occasion.  Any time you            
 deal with changing the legal system, it is easy to illustrate an              
 example of a horror story.  Everybody can present an antidote and             
 he can present antidotes on the other side.  Anecdotical (indisc.)            
 is very dangerous.  He said he thinks it is much more useful,                 
 although much more boring and harder to do, to come up with hard              
 statistics that indicates whether there is a problem or not.  He              
 said he has not seen and doesn't believe there are any statistics             
 that show there is a large number of frivolous lawsuits filed in              
 this area.  He questioned the need for legislation that has a                 
 dramatic effect on lawsuits against a class of defendants.                    
                                                                               
 MR. WINNER said he believes if the bill is enacted, it would have             
 an onerous effect not only on frivolous lawsuits, but on all                  
 lawsuits that involve design professionals.  Rule 11 prohibits a              
 attorney from filing a pleading unless he, in good faith, believes            
 that it is true.  Rule 95 allows the court, after a hearing, to               
 post sanctions against an attorney if such a thing happens.  Mr.              
 Winner pointed out that under the civil law, there is the                     
 opportunity to bring a lawsuit against somebody who has filed                 
 harassing litigation or fictitious litigation.  There are already             
 mechanisms in place to detour frivolous lawsuits.                             
                                                                               
 MR. WINNER said the other deterrent of bringing a frivolous lawsuit           
 is that most lawsuits brought on behalf of injured people or people           
 who have died and are brought on via a contingent fee bases by the            
 attorney because the injured victim or the estate does not have the           
 funds to pay the attorney by the hours.  In that case, a contingent           
 fee is really the only way the victim or the estate can retain                
 counsel.  In his experience, plaintiff's lawyers generally do not             
 take cases that they view as frivolous because they figure they'll            
 put in a whole lot of work and spend a whole lot of money and never           
 get paid.  There is a very strong market incentive against                    
 frivolous lawsuits being filed by virtue of....[End of tape]                  
                                                                               
 TAPE 96-12, SIDE A                                                            
 Number 001                                                                    
                                                                               
 CHAIRMAN KOTT thanked Mr. Winner for his testimony.  There being no           
 further testimony, Chairman Kott closed public testimony.                     
                                                                               
 CHAIRMAN KOTT said there has been a lot of discussion on the bill.            
 The objectives of the bill is to potentially cut down on frivolous            
 lawsuits and the other is to hopefully keep the parties from going            
 to court and encourage them to settle out of court.  Most of the              
 areas of concern are dealing with judicial matters.  He said he               
 thinks there are some constitutional issues that need to be                   
 addressed.  Also, some of the civil rules should be reviewed.                 
                                                                               
 CHAIRMAN KOTT said there was another issue which dealt with whether           
 or not all the design professionals named would have to post $750.            
 He said he would like to call on Mr. Maynard to clarify that.                 
                                                                               
 MR. MAYNARD said he would clarify it if he could.  He informed the            
 committee that he isn't sure that it is clear that every defendant            
 has to pay this.                                                              
                                                                               
 CHAIRMAN KOTT referred to page 2, line 16, "Within 10 days after              
 receiving a claim, the department shall provide notice of the claim           
 and of the deposit requirement under (b) of this section to all               
 design professionals against whom the claim is made."  He said if             
 they're a party, he would suspect they would have to post the $750            
 each.  He asked if there is more than one plaintiff, would they               
 also have to post the money.                                                  
                                                                               
 REPRESENTATIVE GREEN said he didn't think so.  He explained the               
 claimant, whether it is several or one, would post $750 and they              
 would end up splitting that or assigning it to one.  If there are             
 six people as defendants, all six of them would need the $750.                
 Representative Green said that wasn't the intent and he doesn't               
 think that is the way it would read by an attorney.  That would               
 certainly be subject to review in the Judiciary Committee.                    
                                                                               
 CHAIRMAN KOTT said the bill would be brought back before the                  
 committee.                                                                    
                                                                               
 ADJOURNMENT                                                                   
                                                                               
 Number 275                                                                    
                                                                               
 CHAIRMAN KOTT adjourned the House Labor and Commerce Committee                
 meeting at 4:55 p.m.                                                          
                                                                               

Document Name Date/Time Subjects