Legislature(1993 - 1994)
02/18/1994 01:15 PM House JUD
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
Number 805
CHAIRMAN PORTER announced the next order of business was HB
292.
HB 292 - CIVIL LIABILITY
CSHB 292(JUD): "An Act relating to civil actions; amending
Alaska Rules of Civil Procedure 16.1, 26, 49, 68, and 82;
and providing for an effective date."
Number 805
CHAIRMAN PORTER announced the next order of business was
HB 292, relating to civil court reform. He noted that legal
counsel to the committee was prepared to review numbered
amendments and that all members should have these numbered
amendments. He said considerable public testimony was given
in the Labor and Commerce Committee. He suggested bringing
the committee up to speed by going through amendments
adopted by the Labor and Commerce Committee. Chairman
Porter introduced Daniella Loper.
Number 807
DANIELLA LOPER, Legal Counsel, House Judiciary Committee,
began with Amendment 1. She stated the intent behind
Amendment 1 concerned a case from 1990, Lake v. Construction
Machinery, which involved an employee injured in the course
of his employment who brought damages against several third
parties. These third parties asserted as a partial defense
that the plaintiff's employer was negligent.
TAPE 94-24, SIDE B
Number 000
DANIELLA LOPER continued her discussion of Amendment 1:
Amendment 1 codifies intent so that "basically we are going
to go by, on a percentage of fault basis; and so,
tortfeasors should not be held responsible for the
negligence of an employer, and to this extent this act is
intended to overrule the case of Lake v. Construction
Machinery." She referred to page 10, line 6, of the bill
which refers to 16 regarding where the percentage at fault
should be allocated and noted that after "other persons" the
phrase "including an employer" was put in to clarify the
point.
Number 038
CHAIRMAN PORTER cited a 1988 initiative which was passed
that indicated that as a result of the process of our
initiative, responsibility should be apportioned for tort
liability, proportionately. In other words, if there were
four people who contributed to the responsibility of a
liability for an injury or property damage or something
similar, the court should apportion by whatever percentage
they determine is correct the responsibility among these
four people. The wording of the initiative was such that it
said "parties to the suit" instead of "all parties
responsible." Consequently, what was discovered was that if
you named three out of the four people in this hypothetical
situation, then that's all there would be to apportion the
responsibility between... because you didn't name this other
person and, consequently, he wasn't a party to the suit.
The specific wording of the initiative was such that there
was a loophole. This is one of the things that is being
used to close the loophole.
CHAIRMAN PORTER entertained a motion on Amendment 1.
Number 086
REP. PHILLIPS moved Amendment 1.
CHAIRMAN PORTER welcomed discussion.
Number 108
REP. NORDLUND inquired about the case cited and asked if it
was a Supreme Court decision.
Number 112
MS. LOPER replied that it was.
REP. NORDLUND asked for confirmation that the committee was
not making a decision on this specific resolution involving
the facts of the particular case. He noted that he was
unfamiliar with the case and was uncomfortable voting on an
amendment involving a case where the facts and circumstances
were unknown to him.
MS. LOPER requested clarification of Rep. Nordlund's wish --
an explanation of the case.
MS. LOPER explained that copies of the brief were in the
packet. She explained the employee injury case further.
She said an employee was hurt on the job and was compensated
by workman's compensation by the employer and wanted to
pursue litigation against the machinery's manufacturer,
Construction Machinery. She named several third parties in
the suit. Ms. Loper referred to the third parties and said
that the employer had a certain percentage of fault. She
asked, "Why should the rest of us pay 100% when the employer
has a percentage of fault?"
MS. LOPER continued, "And so... the trial judge ruled that
the employer's fault should be taken into consideration,
along with the rest of the third parties. They appealed.
It went up to the Supreme Court, and the Supreme Court took
a look at the statute, at 91780, which was part of the
initiative, and what the voters had voted on, which was a
percentage of fault basis. But the court system is sort of
strict on the way they look at it. Half of the court views
this statute as still joint and several liability. The
other half view it as a percentage at fault. And because
they say that the intent of this legislation is not very
clear, and they didn't want to override the Workers'
Compensation Act, and so basically what they have done is
said, `We're not going to take a look at the employer's
fault in this.' And so, since we are clarifying that in HB
292, and clarifying exactly what the initiative was about,
and what the voters have voted on, and that was a percentage
of fault basis, we are saying that, now we're making this
legislation clear, with clear intent. And so, therefore, if
an employer was at fault, we're going to bring it in.
Because the rest of the third parties shouldn't be held
accountable for that percentage... And so that is why in
this amendment we are saying that we're going to overrule
the case of Lake v. Construction Machinery; we are making it
clear that this is a percentage of fault basis."
REP. NORDLUND asked for clarification of effect on damaged
individuals in this particular case upon adopting the
amendment. He was told there would be none.
Number 188
REPRESENTATIVE PHILLIPS inquired, "Mr. Chairman, in view of
the fact that this is a paragraph in the findings, is the
other portion of the amendment that's made on page 10...
that one phrase then, clarifies?" She was told, "Yes, it
would clarify how the law needed to be changed."
Number 196
Amendment 1 was adopted with no objection.
Number 243
CHAIRMAN PORTER raised discussion of Amendment 2.
Number 252
MS. LOPER explained Amendment 2. "Again, we're taking... a
look at the findings and purposes section that is on page 3,
line 4. This particular section deals with asking the
Division of Insurance to compile useful information and
report back to the legislature exactly how HB 292 is going
to affect the civil justice system and the insurance
system."
MS. LOPER continued, "And so, therefore, we deleted the
phrase `[victims and where the disproportionate amount of
compensation dollars is absorbed by the system]' and deleted
health care, as well, because we're looking at the general
overall scope of the insurance systems, not just the health
care industry. And so we looked at the language
compensation dollars as absorbed by the system. We felt
that the language was very ambiguous and reflected -- and we
wanted to reflect a much more precise language and simply
just put residents of the state. So it would be reading,
basically, `accumulate additional information concerning the
cost to society of the civil justice system as it is
presently constituted by having the Division of Insurance
compile useful information and present a report to the
legislature. This information is necessary to determine
whether the civil justice and insurance systems as they are
presently constituted are fairly serving the residents of
the state.' Which is much more to clarify...
"And then, in order to reflect the same issue, we looked at
page 15, just to clean up shop on line 31, and as you can
see, the word `report'... and it's mentioned in another
issue, and that is the medical practice parameters report,
and that was just to clarify -- it's the civil justice
report.
"And, basically, what 35 does is, it just simply implements
this issue that we're stating in the findings and facts. We
clearly state it in the bill now that the Division of
Insurance shall compile information. And then, as you can
see on the third, basically the fourth issue on this
amendment... to determine if the Civil Justice System and
the Insurance System in the state are fairly serving the
residents of the state... our findings and intent are going
to mirror exactly what we want to implement in the bill."
Number 283
REP. PHILLIPS moved that Amendment 2 be adopted.
CHAIRMAN PORTER stated that Amendment 2 had been moved and
asked for discussion. An inquiry followed concerning
whether the Division of Insurance would be asked to provide
information at the conclusion of the process concerning the
effect on rates.
MS. LOPER responded that this issue makes the bill
constitutional. She said, "The courts have always looked at
this and seen the state's interest in maintaining reasonable
liability insurance... This is economic legislation...
They try and take a look at the equal protection... and the
due process challenges. And this is basically what makes
the cap on damages constitutional. Because the state is
legitimately interested in lowering insurance rates, that
connects it all."
CHAIRMAN PORTER asked if there was any objection to
Amendment 2. There being none, the amendment was adopted.
Number 307
MS. LOPER discussed Amendment 3 concerning medical practice
parameters. She said, "They've completely removed the
language that is in the bill on page 3, and as you can see,
we've proposed new language. For some background
information, we would be one of the only three states in the
Union to implement practice parameters. This clearly will
be very significant in lowering insurance rates."
Number 334
REP. PHILLIPS requested a legal definition of "practice
parameters."
Number 339
MS. LOPER responded that practice parameters defines a
physician's medical treatment in certain instances. The
State Medical Board will develop blanket practice
parameters, minimum standards physicians must follow. This
will decrease malpractice suits.
Number 355
CHAIRMAN PORTER added that the section that was had in the
bill was a little presumptuous. He said rather than be
presumptuous, maybe we ought to make sure that the medical
profession says that this is going to do what we think it's
going to do. The presumption is that medical practice
parameters will reduce defensive medicine. Defensive
medicine is something that's come to pass because of
malpractice exposure where doctors feel required to give
tests so as to preclude somebody coming back to them saying
that they failed to... omitted a test that could have
resulted in saving a life. That has driven up the cost of
medical insurance and health care costs. Chairman Porter
said the presumption is that practice parameters
establishing what tests should be given under certain
circumstances or symptoms will reduce the requirement for
defensive practice.
Numbers 392 - 413
REP. NORDLUND, CHAIRMAN PORTER, REP. JAMES and REP. GREEN
discussed the medical parameters and the way the medical
community would respond to them.
CHAIRMAN PORTER stated that the medical community was a
little happier with the newer version of the bill containing
the parameters.
There was further general discussion concerning the possible
"stickiness" of establishing guidelines or practice
parameters.
REP. GREEN expressed support for the amendment. Possible
problems concerning language and numbering were discussed.
Number 433
MS. LOPER directed questions to bill drafters.
CHAIRMAN PORTER suggested that the amendment be passed and
have the drafter appropriately number it.
CHAIRMAN PORTER moved that Amendment 3 be adopted. There
being no objections, Amendment 3 was adopted.
Number 460
MS. LOPER discussed Amendment 4. She explained Amendment 4
clarified the Statute of Limitations on health care
providers did not conflict with the time period in the
Statute of Repose.
Number 477
REP. PHILLIPS moved Amendment 4. There being no objection,
Amendment 4 was adopted.
Number 481
MS. LOPER discussed Amendment 5. She said the intent of the
amendment was to refer to injury or death as an accident.
She continued discussion and explanation of the amendment.
Number 483
CHAIRMAN PORTER remarked that Amendment 5 covers a loophole.
Number 541
Amendment 5 was moved by REP. JAMES. There being no
objection, Amendment 5 was adopted.
Number 553
MS. LOPER began to discuss Amendment 6. Discussion and
clarification amongst the representatives followed.
CHAIRMAN PORTER explained that "in the existing law, there
is a $500,000 cap on noneconomic damages. There is an
exception to that that says you can exceed it if there is
disfigurement or severe physical impairment. This is the
loophole in the $500,000 cap... With the idea of having
reasonable caps, we have taken the $500,000, left that in
place, and said, `Okay, we'll recognize that there's
something over and above that, we'll cap it at $750,000, and
we'll define what severe physical impairment is.' And
that's what this does...." He noted that though such a
measure might be viewed as "draconian," it was a far more
generous cap than others being tendered in other tort reform
bills across the country.
Number 728
REP. NORDLUND moved that Amendment 6 be adopted. Amendment
6 was adopted with the understanding that necessary clerical
and numerical modifications would be made in the text of the
amendment.
Number 735
MS. LOPER presented Amendment 7. She said a victim of any
felony, not just a Class A or unclassified felony, shall be
exempt from any caps on damages. She said the law, as
presently constituted, holds a $500,000 cap on noneconomic
damages.
Number 745
CHAIRMAN PORTER stated that by adopting the amendment, it
will allow victims of felonies to not have the caps on their
potential recovery.
Number 766
REP. JAMES moved that Amendment 7 be adopted.
Number 779
REP. NORDLUND raised the issue of parity, asking for insight
on the rationale behind the section. He said, "From the
standpoint of an injured party, if you sustain noneconomic
damages, what difference does it make if you sustained the
damages by a person who committed a felony or a person who
didn't commit a felony? He said he didn't see why
additional awards would be made to somebody just because it
was done in a crime situation."
CHAIRMAN PORTER replied, "I think it recognizes the notion
that in many cases, accidents are just that. While there is
somebody responsible for them, it is not through an
intentional act -- no one ever considered that they would be
in a position of having injured someone. In most felony
cases, or all felony cases, there is an intent to commit the
crime and there is an inherent recognition that there is a
potential for harming someone."
Number 813
After general discussion, Amendment 7 was adopted.
Number 815
MS. LOPER presented Amendment 8, dealing with periodic
payments. She said the bill would allow either party to
choose the periodic payment schedule by merely placing a
threshold of $50,000 before a party can opt to go on a
periodic payment schedule.
Number 829
There being no objection, Amendment 8 was adopted.
Number 831
MS. LOPER presented Amendment 9. She said the parties shall
submit to the court a proposal containing the periodic
payment schedule in order to be included in the court's
judgement.
CHAIRMAN PORTER clarified that this section was suggested by
the court system to cut down on the court time. The bill
provides that either the defendant or the plaintiff can
elect periodic payments.
TAPE 94-25, SIDE A
Number 000 - 196
CHAIRMAN PORTER presented an explanation of the amendment's
language and rationale. He explained it is protection for
the injured party. It is there to guarantee these payments.
Number 220 - 316
CHAIRMAN PORTER suggested the committee address Amendment 9
at greater length on the following Monday.
Discussion continued, with REP. NORDLUND expressing both
support for the intent of the bill but concern that the
settlements would be structured out of the court and the
plaintiff would not be able to participate in that
structure.
MS. LOPER interjected that a mediator would be present in
structuring this settlement between the defendant and the
plaintiff.
Number 317
CHAIRMAN PORTER proposed that the committee hear testimony
the following Monday and continue reviewing the amendments.
This was acceptable to committee members.
There being no further business, the meeting was adjourned
at 3:45 p.m.
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