Legislature(1995 - 1996)
01/25/1996 01:35 PM Senate L&C
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SENATE LABOR AND COMMERCE COMMITTEE
January 25, 1996
1:35 P.M.
MEMBERS PRESENT
Senator Tim Kelly, Chairman
Senator John Torgerson, Vice Chairman
Senator Jim Duncan
MEMBERS ABSENT
Senator Mike Miller
Senator Judy Salo
COMMITTEE CALENDAR
SENATE BILL NO. 184
"An Act relating to civil liability for false claims and improper
allegations or defenses in civil practice; and providing for an
effective date."
PREVIOUS SENATE COMMITTEE ACTION
SB 184 - No previous action to consider.
WITNESS REGISTER
Jeff Feldman
Alaska Trial Lawyers
540 L St., Ste. 206
Anchorage, AK 99501
POSITION STATEMENT: Supported SB 184.
Robert Mintz
2808 Diligence Circle
Anchorage, AK 99510
POSITION STATEMENT: Supported SB 184.
ACTION NARRATIVE
TAPE 96-6, SIDE A
Number 001
SL&C 1/25/96
SB 184 CIVIL LIABILITY FOR IMPROPER LAWSUIT
CHAIRMAN KELLY called the Senate Labor and Commerce Committee
meeting to order at 1:35 p.m. and announced SB 184 to be up for
consideration.
ROBERT MINTZ, Anchorage, said the basic issue addressed by SB 184
is giving injured parties effective remedies for bad faith civil
litigation. The essence of the legislation gives people who really
suffer harm due to abuse of the civil justice system the ability to
be compensated for their injury. In addition, people who actually
cause that harm will be forced to pay that compensation.
SB 184 is a departure from the existing system of self regulation
of the legal profession. It gives victims of unscrupulous
attorneys and their clients the ability to be compensated in cases
of outrageous conduct.
The standard is a tougher standard than just negligence. A mis-
statement must be intentional, MR. MINTZ said.
Section c is a variation of the existing malicious prosecution law
where malicious conduct must be proved and it separates conduct
into either malicious or unreasonable.
The difference between this bill and current law is that the client
and the attorney would be held personally liable for all damages
caused by their conduct forcing them to do better investigation,
documenting claims and allegations prior to asserting them.
The effect of this bill will be devastating for other kinds of
attorneys. If somebody knowingly lies just to drag somebody into
court, they will end up paying for doing so. If someone balks at
a complaint with frivolous claims, they will end up paying for
that, and if somebody files claims without checking if those claims
have a reasonable basis before they are filed, they will end up
paying for that. If a case is filed maliciously, and someone tries
to extort money, because it would be cheaper for the defendant to
settle than to fight, than the person filing the case will pay for
it.
Currently there are insufficient adverse economic consequences
associated with abuses of the legal system. SB 184 is designed to
fix that.
Number 120
JEFF FELDMAN, Alaska Bar Association member and President of the
Trial Lawyers Academy, testified that SB 184 is drafted to address
the problem that is created when a person feels he/she has been
wrongfully sued with improper motives or without a reasonable
basis.
Currently, three responses already exist in the system to provide
relief to a person wrongfully sued. The first remedy is Alaska
Rule 82, which allows the prevailing party to recover a portion of
his/her attorney's fees. The second response is Civil Rule 11
which is the authority of the court to impose sanctions for lawyers
and parties that take actions that contain misleading allegations
of fact or claims that are not well grounded in the law. The third
response is the existing law of malicious prosecution. SB 184
makes a slight change in the existing law of malicious prosecution
to require proof of either the actions of probable cause for a
claim or improper motive.
MR. FELDMAN stated he does not have a problem with the standard of
conduct the bill proposes to adopt which does not differ measurably
from what currently exists. He did express concern about the
section that would make it easier for a person to bring a malicious
prosecution claim. In any lawsuit one party is going to lose,
unless a settlement is reached. Defendants who are sued generally
believe they are wrongfully sued. This measure will make it easier
for people who have been sued and won to allege that they were
wrongfully sued and attempt to seek further damages by way of
malicious prosecution claims.
Number 226
MR. MINTZ stated there is a pendulum that may have gone too far in
making the system risk free for a small number of unscrupulous
attorneys. The stakes need to be raised so that the civil justice
system cannot be abused by establishing a disincentive for those
people whose conduct is outrageous. He repeated the section
addresses intentional misconduct, not negligence.
SENATOR KELLY announced the bill would be brought up again February
6, and adjourned the meeting at 1:50 p.m.
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