04/03/1997 09:10 AM Senate FIN

  CS FOR SPONSOR SUBSTITUTE FOR HOUSE BILL NO. 58(FIN) am                      
  "An Act relating  to civil actions; relating  to independent                 
  counsel  provided under  an  insurance  policy; relating  to                 
  attorney fees;  amending Rules 16.1,  41, 49, 58,  68, 72.1,                 
  82, and 95, Alaska  Rules of Civil Procedure;  amending Rule                 
  702, Alaska Rules of Evidence; and amending Rule 511, Alaska                 
  Rules of Appellate Procedure."                                               
                                                                               
  CHRIS CHRISTENSEN, General Counsel, Judicial Branch,  stated                 
  that  their  fiscal  note was  low  considering  the massive                 
  number of changes the  bill proposes.    He  noted that most                 
  parts of tort reform  didn't help the state save  money, but                 
  did  help  litigants.   The  fiscal  impact of  most  of the                 
  changes would be  either neutral  or impossible to  predict.                 
  There  would  be  a slight  impact  on  the  way cases  were                 
  handled.   For  example, the  defendant  has the  option  of                 
  making  periodic  payments  for amounts  in  excess  of $100                 
  thousand.  Extra judicial time would be involved in that the                 
  judgement would have to set up the payment schedule and take                 
  testimony  from witnesses,  and resolve  future  disputes if                 
  payments  were not  being  made.    Section  15  relates  to                 
  collateral benefits and requires the  jury to consider them,                 
  rather than the  judge under  current law,  which would  add                 
  jury expenses.    Section  23  modifies the  rate  at  which                 
  prejudgment  interest is accrued by changing it from a fixed                 
  rate to a floating  rate.  This would require a  new rate to                 
  be  set yearly,  necessitating  new  computer  software  and                 
  additional clerical  time.   Continuing,    MR.  CHRISTENSEN                 
  testified  that there  would be an  increase in  the medical                 
  malpractice 3-person  expert advisory panels  because of the                 
  inclusion   of   malpractice   claims   against   government                 
  attorneys,  but  the  cost would  be  minimal,  and was  not                 
  included in the fiscal  note.  Some judicial costs  would be                 
  saved regarding  motion practices,  but would  be offset  by                 
  longer trials and  increased appeals.  It has been estimated                 
  that the bill would result  in increased litigation for five                 
  to  seven  years until  all  the  issues were  settled.   In                 
  response to a  question from SENATOR ADAMS,  MR. CHRISTENSEN                 
  responded that the fiscal note he was referring to was dated                 
  3-11-97 for $19.4 thousand.                                                  
                                                                               
  SENATOR  ADAMS commented that one of  the stated reasons for                 
  tort  reform was because  the court system  was clogged, yet                 
  their fiscal  note was low.   Based on that,  he doubted the                 
  truth of that reasoning and believed  the bill should not be                 
  before  the legislature.   He questioned the  number of tort                 
  cases.  MR. CHRISTENSEN stated that  torts were a very small                 
  percentage of total cases before the courts, excluding small                 
  claims.  There  were less than  1,500 tort cases last  year,                 
  out  of  approximately 140  thousand  total cases.   SENATOR                 
  ADAMS questioned the argument that  most civil lawsuits were                 
  frivolous.   He referred  to the court  system's 1995 annual                 
                                                                               
                                                                               
  report  indicating  that   most  cases  have  merit.     MR.                 
  CHRISTENSEN confirmed that the percentage of  lawsuits which                 
  are dismissed or fined  as frivolous was very tiny,  but did                 
  not  have  exact figures.    SENATOR ADAMS  cited additional                 
  statistics regarding  tort cases,  making the  argument that                 
  the bill was not needed.   He reiterated that because of the                 
  small fiscal note the bill did not do anything.                              
                                                                               
  TERI CARNS,  Senior  Staff Associate  to  Judicial  Council,                 
  testified  via teleconference  from  Anchorage.   She  spoke                 
  about  the  Judicial  Council fiscal  note  that  covers two                 
  areas.  One  was an  alternative dispute resolution  program                 
  review at a cost of approximately $8,000 for a contractee to                 
  do that work.   The other was  a review of settlement  data.                 
  It would provide  an opportunity  to have confidential  data                 
  available for analysis to the  Judicial Council, which would                 
  then be  reported periodically  to the  legislature and  the                 
  court at a cost of approximately $18 thousand.                               
                                                                               
  COCHAIR SHARP noted there were  no additional questions.  He                 
  stated the bill would be HELD for further consideration.