Legislature(1995 - 1996)
04/09/1996 01:50 PM Senate FIN
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* first hearing in first committee of referral
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+ teleconferenced
= bill was previously heard/scheduled
CS FOR HOUSE BILL NO. 158(FIN) am(ct rls pfld)(efd fld)
An Act relating to civil actions; amending Alaska Rule
of Civil Procedure 95.
Co-chairman Halford directed that SCS CSHB 158 (Jud) be
brought back before committee for continued review of
amendments.
Senator Rieger referenced Amendment No. 7, relating to
apportionment of fault, and reiterated comments at a
previous meeting which, he explained, led him to decide not
to offer the amendment.
Senator Rieger directed attention to Amendment No. 8 and
explained that the issue of award of attorney fees is often
raised in the offer of judgment process. He noted that if
the ultimate award is less than the offer of judgment, award
of attorney fees is against the plaintiff. If the award is
greater than the offer, award is against the defendant.
Complications occur surrounding application of interest when
there is a substantial time span between the offer and final
judgment. Amendment No. 8 would require comparison of the
offer to the judgment "at a like time." The court would
thus disregard accrual of prejudgment interest after the
time the offer is made. Senator Rieger MOVED for adoption
of the amendment. No objection having been raised,
Amendment No. 8 was ADOPTED.
Senator Rieger explained that Amendment No. 9 relates to
situations in which there are two or more defendants, and
one defendant offers to settle but the other or others do
not. As written, the bill excludes ability for one
defendant to settle, even if his or her offer is reasonable.
The amendment would delete that provision. DANIELLA LOPER,
aide to Representative Porter, came before committee. She
said the sponsor did not concur in addition of problematic
language by Senate Judiciary. She concurred in removal per
Amendment No. 9. Senator Rieger MOVED for adoption. No
objection having been raised, Amendment No. 9 was ADOPTED.
Senator Rieger explained that language at Page 7, line 10,
allows parties to enter into a written agreement to submit
to arbitration.
Present wording speaks to agreement "before the action." He
said he saw no reason why agreement could not be entered
"after" commencing the action. Amendment No. 10 adds that
option. Senator Rieger MOVED for adoption. No objection
having been raised, Amendment No. 10 was ADOPTED.
Senator Rieger noted that Amendment No. 11 also relates to
arbitration. Under the proposed bill a list of attorneys
with at least five years of civil practice experience would
be eligible to serve as arbitrators. It is not clear
whether attorneys with that experience might, for other
reasons, not be qualified. Language in the proposed
amendment would allow the court to flesh out the
qualifications for those who agree to serve as arbitrators.
Co-chairman Halford called for objections. No objection
having been raised, Amendment No. 11 was ADOPTED.
Senator Rieger questioned the sentence at Page 8, line 7.
It refers to documents that would be "presumptively
admissible." Amendment No. 12 says that the foregoing
language may not be construed to require that the arbitrator
use or rely on documents when there is reason to doubt the
authenticity or accuracy of the documents. Co-chairman
Halford called for objections. No objection having been
raised, Amendment No. 12 was ADOPTED.
Senator Rieger said that while Amendment No. 13 appears
lengthy, it is not. He directed attention to Page 18, lines
26 and 27, and noted language specifying that a claim
subject to arbitration is not subject to offer of judgment
provisions. He suggested that while it should not be
subject to the portion of those provisions within AS
09.30.065(b), other portions of the provisions could apply.
Amendment No. 13 thus divides 09.30.065 into part (a) and
part (b). Daniella Loper directed attention to the last
sentence of subsection (b) and suggested that language
relating to two or more defendants be deleted. Senator
Rieger concurred, saying the language was incorporated
within an earlier adopted amendment. Co-chairman Halford
advised that deletion would be considered a technical
amendment to Amendment No. 13 and would be adopted without
objection. Senator Rieger MOVED for adoption of Amendment
No. 13, as amended. No objection having been raised,
Amendment No. 13 was ADOPTED as amended.
Senator Rieger next directed attention to Amendment No. 14.
He pointed to Page 9, line 22, as well as several instances
on Page 10 and noted reference to "non-employees." Language
within the bill speaks to "staff" and does not read well.
Amendment No. 14 deletes language that makes a contractor a
member of the hospital staff. No objection having been
raised, Amendment No. 14 was ADOPTED.
Senator Rieger directed attention to Amendment No. 15. He
further referenced language at Page 12, lines 12 through 18,
requiring that rates decrease by 10 percent by December 31,
1999. The amendment would delete that provision. Co-
chairman Halford called for objections. Co-chairman Frank
OBJECTED and asked if the rationale was a reluctance to
dictate pricing in a piece of legislation. Senator Rieger
acknowledged that to be the case, saying the provision was
contrary to free market principles. Co-chairman Frank
removed his objection. In the absence of further objection,
Amendment No. 15 was ADOPTED.
Senator Rieger directed attention to Page 7, line 8, and
referenced testimony from court system counsel that language
relating to mandatory arbitration might eliminate ability to
"go to small claims court." The Senator suggested that the
following language be added at Page 7, line 8 (after
$100,000 and before the semicolon):
or is eligible for small claims court
CHRIS CHRISTENSEN, General Counsel, Alaska Court System,
came before committee voicing his belief that the proposed
language "would work." As an alternative, a new subsection
(H) could be added at Page 7, line 19, to say: "is a small
claim under AS 22.15.040." Senator Rieger MOVED for
adoption of the language he proposed, above, as Amendment
No. 16. No objection having been raised, Amendment No. 16
was ADOPTED.
Co-chairman Frank referenced a $867.0 fiscal note associated
with arbitration provisions within the bill and asked if
there would be an offsetting reduction in litigation. Mr.
Christensen said that the bulk of the fiscal note reflects
the cost of providing arbitration services for litigants who
are legally indigent. At the present time, 95 percent of
all tort cases settle without going to trial. These cases
are not costly to the system.
Mr. Christensen further commented on effective use of
arbitration in contract and family law cases. The court
system does not believe it is effective in a typical tort
case. Parties can presently engage in arbitration if they
wish to. Virtually none of them do.
END: SFC-96, #70, Side 1
BEGIN: SFC-96, #70, Side 2
In response to a question from Co-chairman Halford asking if
the state is required to provide counsel to indigent
individuals in both criminal and civil cases, Mr.
Christensen explained that if
the law says an individual cannot exercise his or her right
to bring a case before a judge and a jury until "they go to
arbitration," the state would have the duty to pay for
arbitration if a person could not afford it.
Co-chairman Halford questioned whether mandatory arbitration
was worth the $867.0. Co-chairman Frank noted that Senator
Taylor included the provision when the bill was before
Senate Judiciary. Senator Rieger voiced his understanding
that when the court system is budgetarily squeezed, the
civil liability system suffers. Part of the fiscal note
probably represents "allowing people to get their cases
heard that, right now, are languishing without ever getting
to court," because of time delays in getting them on the
docket.
Discussion of alternatives to mandatory arbitration followed
among the Co-chairmen and Mr. Christensen.
Additional comments followed by Mr. Christensen concerning
how fiscal note numbers were developed and the share of
arbitration costs to be paid by the state on behalf of
indigent individuals. Senator Rieger noted that fiscal note
funding would make the court system more accessible. He
suggested that is a different issue than paying for free
counsel.
Co-chairman Halford directed attention to mandatory
arbitration language at page 7, line 5, and suggested that
addition of "if requested by one of the parties" following
the word "arbitration" would lessen impact. Mr. Christensen
advised that he could not say what percentage of plaintiffs
or defendants would request arbitration. If the judge were
given the discretion to decide whether or not arbitration
would be valuable, the impact on the state would be
relatively minimal compared to the proposed bill. Judges
would likely not order it in cases where the parties could
not afford the process.
Mr. Christensen told members that arbitrators in Anchorage
have indicated that the form of arbitration contained within
the bill is "about as expensive as arbitration can get." A
retired judge or attorney is needed to draft discovery
orders and findings of fact and statements of law at the end
of the process. Co-chairman Halford voiced a preference for
removing mandatory arbitration from the bill. Co-chairman
Frank concurred. Senator Rieger expressed a preference for
retaining the provision but preventing the most expensive
form.
Senator Rieger MOVED for passage of SCS CSHB 158 (Fin) with
individual recommendation and accompanying fiscal notes. No
objection having been raised, SCS CSHB 158 (Fin) was
REPORTED OUT of committee with a $0.8 fiscal note from the
Dept. of Commerce and Economic Development; and zero notes
from the Dept. of Law, Dept. of Administration, and the
Court System. (The Court System note indicated a $862.0
cost commencing in 2001.) All members present signed the
committee report with a "do pass" recommendation.
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