Legislature(1993 - 1994)

09/10/1993 09:00 AM L&C

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
txt
  HB  292 Relating to civil actions;  amending Alaska Rules of                 
  Civil Procedure  49,  68,  and  82;  and  providing  for  an                 
  effective date.                                                              
                                                                               
  CHAIRMAN HUDSON noted the members  present and announced the                 
  day's  agenda,  explaining  that   the  meeting  was   being                 
  teleconferenced.   The meeting was intended to set the stage                 
  and  to  get a  better understanding  of  the issue  of Tort                 
  Reform.                                                                      
                                                                               
  MIKE FORD, Attorney, Legislative Legal Services, Legislative                 
  Affairs Agency, began with a general overview.  He feels one                 
  of the  difficulties of this  area, from various  reports is                 
  that  tort  reform  involves a  number  of  fairly technical                 
  areas.    Tort reform  actually  is  a subset  of  our civil                 
  justice  system.    Civil  justice  is intended  to  provide                 
  revenues  to the  individual as  opposed to  (indiscernible)                 
  public.  A tort,  essentially is anything for which  you can                 
  receive compensation, something you can  obtain damages for.                 
  Tort  reform is contrasted to contractual actions.  It's not                 
  about a  breach of  contract, or a  crime, but some  type of                 
  civil  injury  that one  can  obtain  a recovery  for.   The                 
  purpose of the tort laws  is compensation.  The  involvement                 
  in this  area of the  law, over the  years, has  resulted in                 
  expansion of this  area.  At the beginning  of the tort era,                 
  there were very  narrow areas for  which you could obtain  a                 
  recovery.  Over  the last  50 - 60  years, particularly,  we                 
  have seen an enormous  expansion in the types of  things for                 
  which you  can take a recovery.  Some  of that has been done                 
  by case law and some has been done by legislators.   Between                 
  the two, we have seen a fairly large expansion in that area.                 
                                                                               
                                                                               
  There are  several kinds  of basic  areas in  which you  can                 
  obtain  a recovery.   There  are torts known  as intentional                 
  torts, of which the  most common area is negligence  in that                 
  someone has failed to do something  that a reasonable person                 
  would have  done.  There  is  some damage  caused  and  that                 
  triggers  the traditional lawsuit  of which is  an effort to                 
  recover compensation for that injury.                                        
                                                                               
  MR.  FORD explained the  whole system is  intended to obtain                 
  compensation for  someone and  the progression  of filing  a                 
  lawsuit to actual recovery can be a very quick one or it can                 
  be a very long one, depending on  the facts of the case.  It                 
  is  hard  to  talk about  the  typical  case,  they are  all                 
  different.  Some  involve years of litigation,  some involve                 
  very  small amounts of  money and are  settled very quickly.                 
  All cases  have an  impact on  the system.   Sometimes  they                 
  involve changes to the law, either  to the courts or changes                 
  to the law  implemented by  the legislature.   That gives  a                 
  certain basic understanding of tort reform.                                  
                                                                               
  MR.   FORD  told  committee  members  the  most  significant                 
  legislative changes occurred  in 1986.   At  that time,  the                 
  legislature looked at a number of proposals that changed the                 
  way  in which someone could recover damages in civil action.                 
   The result of that effort was passage of a bill that became                 
  an  act,  Chapter  17,  Title  9.    It  made  a  number  of                 
  significant changes  to the  way in  which someone  recovers                 
  damages in civil action.  The  adoption of that act resulted                 
  in,  most  significantly,  the change  in  which  the system                 
  operates in the  area of joint  and severability.  It  means                 
  when someone has  an injury, often  the injury is caused  by                 
  more than one person.    Before 1986, one could  recover all                 
  damages from any one  of the multiple defendants.   That was                 
  the rule of joint  and severability.   It is several in  the                 
  sense that each party is liable.   It is joint in the  sense                 
  that all  the parties  are liable  for all  of the  damages.                 
  That was the  original issue among all of the  states and in                 
  Alaska.  The legislature  decided to change that.   In 1986,                 
  what we changed to was a  modified version of that approach.                 
  The legislature decided to allow a recovery against a single                 
  defendant for more  than the  share of the  damages, but  it                 
  limited the amount you could recover.  In that sense, it was                 
  a modified  rule  of  joint and  severability.    The  other                 
  significant change in that area was  the cap on non economic                 
  damages.                                                                     
                                                                               
  MR. FORD  said in  1988, the  initiative was  passed by  the                 
  voters of the state of Alaska,  which made another change to                 
  the  rule  of  joint/severability.    The  rule  changed  by                 
  (indiscernible)   initiative   to   pure   severability,   a                 
  responsible party  was only  liable for their  share of  the                 
  damage.  If there  were three defendants, they would  all be                 
  equally liable.   They would only  be liable for their  one-                 
  third share of their liability.  That is the law today.  The                 
  initiative also made another change,  in which it eliminated                 
  the contribution chapter.                                                    
                                                                               
  CHAIRMAN HUDSON asked  Mr. Ford  to expand  on the  attorney                 
  fees,  and  asked   if  there  was  an   initiative,  public                 
  referendum, or public vote on the subject at that time.                      
  MR. FORD answered that he believed  there was and thought it                 
  was a proposal.  The only  two substantive provisions on the                 
  initiative ballot were  the issue of  joint/severability and                 
  the contribution  chapter.  He believed there  was an effort                 
  to do the Rule 82  provision on attorney fees and,  for some                 
  reason, it was not admitted to the ballot.  He was  not sure                 
  why.                                                                         
                                                                               
  Number 129                                                                   
                                                                               
  REPRESENTATIVE NAVARRE asked if the limit to attorney's fees                 
  was not allowed on the ballot.                                               
                                                                               
  MR. FORD stated it was not on the ballot.                                    
                                                                               
  Number 138                                                                   
                                                                               
  REPRESENTATIVE  GREEN asked  Mr. Ford  is  he may  have come                 
  across  a situation that  at the time  there seemed  to be a                 
  change from  getting someone  well to  getting someone  more                 
  than well.                                                                   
                                                                               
  MR. FORD felt that had always been an issue and the response                 
  of  the  legislature  was  to  put  the  cap  on  it.    The                 
  legislation passed in  1986 limited  the pain and  suffering                 
  damages   to  the   amount  of   $500,000.00   with  certain                 
  exceptions.                                                                  
                                                                               
  Number 154                                                                   
                                                                               
  CHAIRMAN HUDSON asked Mr. Ford to walk the committee through                 
  HB 292.                                                                      
                                                                               
  Number 202                                                                   
                                                                               
  MR.  FORD  began his  review  of  HB 292,  work  draft dated                 
  8/27/93.  He began with Section 1, FINDINGS AND PURPOSE.  He                 
  felt it  was self explanatory.  The only purpose of this was                 
  if the court was to find some ambiguity in one of  the other                 
  provisions.  It also serves the purpose to the public of the                 
  intent.  The only problem he  had was on page 3, (6),  which                 
  concerns  having   the  attorney  general   compile  certain                 
  information.  He didn't believe there to be a provision that                 
  actually requires the attorney general to do that.                           
                                                                               
  MR.  FORD  stated  that  if  the  intent was  to  leave  the                 
  paragraph in, he  would suggest that the  committee think of                 
  how  they  want   the  attorney   general  to  compile   the                 
  information, and what information.  At present, there is not                 
  a provision  that states the attorney general shall do this.                 
  He felt it  was an oversight.   He had no other  comments on                 
  Section. 1.                                                                  
                                                                               
  MR.  FORD  then brought  up Section  4,  stating it  was the                 
  existing  law  which provided  a  two year  period  to bring                 
  personal injury  lawsuits.   He explained  what was  done in                 
  Section 4, lines  1, 2, and 3,  was that they had  taken out                 
  the existing rule  and moved it to  Section 5.  It  was done                 
  because it makes it much clearer in that manner because they                 
  are also affecting other provisions of  the bill.  Section 4                 
  is simply  cleaning up  the provision,  moving the  existing                 
  rule, and placing it in Section 5.                                           
                                                                               
  Section 5,  is a  two  year period  to bring  a lawsuit  for                 
  personal injury death or  property damage.  It is  two years                 
  from the accrual  of the action.   Accrual  is a legal  term                 
  which basically  means  that time  that one  should know  or                 
  should have known that he/she could file the lawsuit.  It is                 
  in one  sense, a rolling period.  When does the clock start?                 
  When does the clock stop?  Sometimes it is hard to know that                 
  and sometimes it is very simple.  If someone slips and falls                 
  down the  stairs, it  is pretty  clear to  know that  he/she                 
  would have injuries.   That is  when the clock  starts.   If                 
  someone  has an operation, and  suffers an injury they don't                 
  know about - the  doctor leaves a sponge where  he shouldn't                 
  have left it -  one may not know  about it for a long,  long                 
  time.  That  is a more  latent type of  injury that may  not                 
  start until you know that you have that injury; two examples                 
  of the opposite extremes.                                                    
                                                                               
  There  are two provisions in Section  5, which are different                 
  in effect,  in each  type of civil  action.   On line  8, it                 
  states:  "Notwithstanding  AS 09.10.140."   That means  that                 
  the provisions of 09.10.140  do not apply.  AS  09.10.140 is                 
  an  exception to the general rule.  The general rule being a                 
  person has two  years to file  a lawsuit, except in  certain                 
  cases.   The cases  which are  being talked  about are  with                 
  people who are in prison, people who  are under age that are                 
  minors, or people who are incompetent.  Those are exceptions                 
  to  the  general  rule that  one  has two  years  to  file a                 
  lawsuit.                                                                     
                                                                               
  On lines  11 and 12,  it states  where this period  does not                 
  apply if there is a  shorter period under another  provision                 
  of law.  There are other provisions that may start the clock                 
  earlier, so one actually  has less than two years.   This is                 
  why there is subsection (b).                                                 
                                                                               
  Section 2 is a  provision that applies to a  particular type                 
  of civil action, particular type of torts.  It gives one six                 
  years to bring a lawsuit.  A point of significance: on  line                 
  13, there is still not included exceptions.  Notwithstanding                 
  AS  09.10.140,  those  exceptions are  not  going  to apply.                 
  Another point of significance, is that it is a flat six year                 
  period, not six  years from when  one knows, or should  have                 
  known.  It  is six years from  (1), (2) & (3) dates.   It is                 
  the earlier of those dates.  A person may have more than one                 
  of (1), (2) & (3) apply.  Look at number (1); six years from                 
  the date a  product is alleged  to have caused the  personal                 
  injury or property  damage was purchased.   For instance  if                 
  someone buys a can of hair spray, and it causes all of their                 
  hair to fall  out, the day that person  buys the hair spray,                 
  the  clock  starts   to  work.     Number  (2)  deals   with                 
  construction  type  cases,  substantial  conclusion  of  the                 
  construction that one alleges  caused their injuries, starts                 
  the clock.  Number (3)  is a generic provision for the  last                 
  act alleged to  have caused the  personal injury.  The  time                 
  one has to bring their personal injury is six years from one                 
  of those dates.  It may  be that the earlier provision  that                 
  was  discussed,  the  two year  provision,  would  not apply                 
  because this is a shorter period.  In that sense, the two do                 
  match.                                                                       
                                                                               
  For example, conceivably  five years down the  road, someone                 
  discovers a sponge in  their stomach.  The last  act alleged                 
  to have caused their personal injury  was the operation.  If                 
  it is  five years down the road, then  the person has a year                 
  to bring up  their action.   Whereas the other provision,  a                 
  person had two years.                                                        
                                                                               
                                                                               
  Number 328                                                                   
                                                                               
  REPRESENTATIVE NAVARRE stated that the  two years only apply                 
  as a  roll.  The rolling  factor only applies for  the first                 
  six years.                                                                   
                                                                               
  MR. FORD  believed that  was correct,  if in  fact that  the                 
  section applied to the person.                                               
                                                                               
  He  stated there  are exceptions, such  as in  subsection b,                 
  intentional injuries,  intentional concealment.   The doctor                 
  knew  about  the sponge  and didn't  tell  the person.   The                 
  emphasis here is to require one to bring the action within a                 
  period  of  time  after  the  injury  that  is the  shortest                 
  applicable under any of  the provisions that they have.   An                 
  example of the two year provision is:  One has the operation                 
  and knows it doesn't work correctly, something happened that                 
  was wrong.  The  person has two years to  bring the lawsuit,                 
  not six years.  A shorter period would apply in that type of                 
  case.                                                                        
                                                                               
  Number 335                                                                   
                                                                               
  REPRESENTATIVE BROWN referenced  page 5, line 10,  the words                 
  "of  the  accrual   of  the  action"   and  asked  for   the                 
  explanation.                                                                 
                                                                               
  MR. FORD  stated "accrual,"  was a  technical term,  meaning                 
  when one knows or when someone should have known.                            
                                                                               
  Number 340                                                                   
                                                                               
  REPRESENTATIVE GREEN asked if he was walking down the street                 
  and there was construction going on and a pressure vessel on                 
  a Cat blows  out which is seven years old, did it mean there                 
  is no compensation if someone suffered injuries.                             
                                                                               
  MR.  FORD  answered in  the negative.    He stated  that the                 
  company that  bought the  Cat  might be  out of  luck.   All                 
  depending  if they had contracts or if they had a tort suit.                 
  The owner of the Cat is liable.                                              
                                                                               
  Number 353                                                                   
                                                                               
  REPRESENTATIVE NAVARRE asked what if  the valve was supposed                 
  to last  for ten  years,  no warranty  but the  manufacturer                 
  stated it would  last for ten years.  If the valve failed in                 
  six  years,  would  the manufacturer  be  liable  under that                 
  situation,  or  if the  subcontractor  looked for  the major                 
  construction company  that owns the  Cat?   Where would  one                 
  recover?                                                                     
                                                                               
  MR. FORD answered it would be hard to tell who could recover                 
  exactly.   If it was an express warranty  - a piece of paper                 
  stating the  part would last  for ten  years.   If that  was                 
  done, then they would  be on the  hook for the damages  that                 
  result.  If the manufacturer just gave someone a product and                 
  the industry standard is  ten years, or one just  assumes it                 
  is going to be good for  ten years, but it doesn't, then  it                 
  really depends if there is negligence or not.                                
  REPRESENTATIVE NAVARRE added that if there was no negligence                 
  in that case, there would not be any recovery.                               
                                                                               
  MR. FORD stated  he was correct.  It  could be ordinary wear                 
  and tear.                                                                    
                                                                               
  Number 382                                                                   
                                                                               
  REPRESENTATIVE  BROWN  said if  there  was an  airplane that                 
  crashed that was  purchased by  Alaska Airlines seven  years                 
  ago,  and the  fault for  the crash  was determined to  be a                 
  defective part  in the  airplane and  not the  fault of  the                 
  Alaska Airlines  pilot,  ground crew,  weather, or  anything                 
  else.   The reason for  the crash was the  defective part in                 
  the airplane.   Would there be  any recovery for people  who                 
  were killed or injured  and who would the recovery  be from?                 
  To  what extent would Alaska Airlines,  itself, be liable in                 
  that situation?                                                              
                                                                               
  MR. FORD stated people spend  thousands of dollars to answer                 
  those  types of questions.   He could  only give guidelines.                 
  It is very hard  to predict liability precisely.   The rules                 
  that  apply under  this bill,  again one must  bring certain                 
  lawsuits within six  years.  If  there was  a part that  was                 
  defected, that was not known about, for seven years, he felt                 
  they lose the right to bring personal injury actions at some                 
  point.   If there  was  no negligence  in  the part  of  the                 
  airlines, that people  died as  the result of  the part,  he                 
  felt it  was hard  to believe.   If  it just  happened, then                 
  there is no recovery,  because there is no negligence.   The                 
  airline did not act unreasonable.                                            
                                                                               
  Number 442                                                                   
                                                                               
  REPRESENTATIVE  BROWN asked if that would  be because of the                 
  imposition of the  six years from  the date the product  was                 
  purchased by them.                                                           
                                                                               
  MR. FORD answered if the last act alleged to have caused the                 
  personal injury was the installation of the part, it was not                 
  done negligently.  The  reason the airplane crashed was  the                 
  part was defective.   The  last act alleged  to have  caused                 
  personal injury, in  his mind, was  the plane crash for  the                 
  people who died.  Alaska Airlines wouldn't be the one to sue                 
  the manufacturer, but the person who died might well be.                     
                                                                               
  REPRESENTATIVE NAVARRE asked about the severability law.                     
                                                                               
  MR. FORD stated that only applies  to who is responsible and                 
  how much one pays,  whether one can bring the  lawsuit under                 
  the terms of the statute of limitations.                                     
                                                                               
  REPRESENTATIVE NAVARRE stated that one could bring a lawsuit                 
  but if the part was 100 percent responsible for the cause of                 
  the  accident, one  would not  have any  recovery.   Someone                 
  could bring  a lawsuit,  say to  sue the  airlines, but  the                 
  airlines will say it was not their fault.                                    
                                                                               
  MR. FORD felt that was a good question which brought up what                 
  was the last act.                                                            
                                                                               
  REPRESENTATIVE  BROWN referenced page  3, subsection a, line                 
  13, stating a  person may not  bring an action for  personal                 
  injury, death, unless it is brought  within six years of the                 
  earlier of the  date.  (1) a product alleged  to have caused                 
  the  problem was  purchased.   The airlines  was flying  the                 
  plane  and the plane came down  because of a defect, that is                 
  going to be the date the  airlines purchased either the part                 
  or plane, or whatever was at fault.  Right?                                  
                                                                               
  MR. FORD stated that clearly the  airlines could not sue the                 
  manufacturer.                                                                
                                                                               
  REPRESENTATIVE BROWN asked  if the people that  were injured                 
  could sue the manufacturer.                                                  
                                                                               
  MR. FORD answered  in the  affirmative.  The  fact that  the                 
  airlines  purchased  it.   He  believed  number  "(3)" would                 
  apply.                                                                       
                                                                               
  CHAIRMAN HUDSON believed it was important that the  area was                 
  understood.  He  asked Mr.  Ford if he  could contrast  what                 
  would happen next.                                                           
                                                                               
  MR. FORD answered  that at present,  again it comes back  to                 
  the term "accrual,"  when you know or should have known.  If                 
  the defective part  is installed, and  one does not know  it                 
  for seven years, then when one knows  it, you have the right                 
  to  bring your lawsuit up.   Under the laws today, one could                 
  sue  the  manufacturer or  the  airlines, because  they know                 
  about it when the plane crashes.                                             
                                                                               
  Number 476                                                                   
                                                                               
  REPRESENTATIVE MACKIE referenced  the original question  and                 
  stated it  was not  clear in  his mind,  under the  proposed                 
  draft, what is being said.   The airlines would not be  able                 
  to sue the manufacturer because of  the six year limitation,                 
  but the victims'  families would  still be able  to bring  a                 
  lawsuit and expect recovery from the manufacturer under this                 
  scenario.                                                                    
                                                                               
  MR. FORD  answered  in the  affirmative, stating  it is  the                 
  earlier  date,  if  the  act  alleged  is the  part  of  the                 
  aircraft.                                                                    
                                                                               
  REPRESENTATIVE  DAVIDSON asked  what  is magical  about  six                 
  years and what happens in other states.  Is there a six year                 
  limitation  or  some  other length  of  time?    Did it  not                 
  encourage the state of Alaska to become some type of dumping                 
  ground  for  older  equipment because  people  would  not be                 
  responsible because the company that set the equipment up in                 
  the first place wouldn't have to worry about lawsuits?                       
                                                                               
  MR. FORD referenced there were a  number of states that have                 
  periods of time like this.  The  period of time that one has                 
  to bring a lawsuit varies.  The state of Colorado has a ten-                 
  year  provision,  which  is  applicable  to  architects  and                 
  engineers.   When he states  they have other provisions like                 
  this,  other  states  don't  necessarily  have  as  broad  a                 
  provision as this.  They have statute  provisions like this.                 
  The provision  that Colorado  has is  a ten-year  provision,                 
  which was upheld in a court challenge.                                       
                                                                               
  REPRESENTATIVE DAVIDSON asked if Colorado divided up between                 
  design and construction and other actual product purchases.                  
                                                                               
  MR. FORD stated that was correct.                                            
                                                                               
  Number 518                                                                   
                                                                               
  REPRESENTATIVE BROWN referenced back to the question whether                 
  (1)  governs,  or  (3)  governs  under  the  (indiscernible)                 
  medical about the  airplane crash.   She asked if it  states                 
  the earlier of (1) or (3),  if (1) was seven years ago,  and                 
  (3)  was today, wouldn't the person injured be excluded from                 
  suing under the language as it is written now.                               
                                                                               
  MR. FORD stated  that as  he reads number  (1), it  wouldn't                 
  apply to a person  who wasn't a purchaser.  If  a person who                 
  wasn't a purchaser was injured by  a product, purchased by a                 
  third party, in this case  Alaska Airlines, he wouldn't read                 
  it  that  way, because  the passenger  did not  purchase the                 
  product.                                                                     
                                                                               
  REPRESENTATIVE  FINKELSTEIN  referenced   the  same   point,                 
  stating that hypothetically what was  being spoken about was                 
  the  case where the fault  was entirely the  part.  The part                 
  was  defective,  there was  no  doubt  about it.    There is                 
  nothing in the draft  that states there is any  relationship                 
  to  whether  the  person filing  the  suit  is  the one  who                 
  purchased the product.   It only states, "a  product alleged                 
  to cause the injury," not purchased by the plaintiff, had to                 
  be brought within six years.                                                 
                                                                               
  MR. FORD said he understands what Representative Finkelstein                 
  was saying.   Clearly  the case,  as he  understood it,  the                 
  airlines could not sue the parts company, but a person could                 
  not either.   The product, that  alleged to have caused  the                 
  injury, was purchased  within six  years.  That  is what  is                 
  stated.  The record needs to be straightened out, it is very                 
  confusing.                                                                   
                                                                               
  REPRESENTATIVE FINKELSTEIN  agreed it  was complex  material                 
  and the clearer it could be made, the better.  A court could                 
  interpret  it that number (1) did apply.   He asked where it                 
  could be found  that the  connection to whether  or not  the                 
  plaintiff was the one who purchased it.   It didn't seem the                 
  words were in the draft.  The only words he found  were that                 
  the product, regardless of who purchased  it, was alleged to                 
  have caused the damage.                                                      
                                                                               
  MR. FORD asked what was a "product."   Is the part that goes                 
  in a  plane a product?   He was  assuming those facts.   The                 
  fact that it was purchased more than six years earlier.                      
                                                                               
  Number 594                                                                   
                                                                               
  REPRESENTATIVE GREEN stated that there have been statutes of                 
  repose  dealing  primarily  with  buildings.   Parts  within                 
  buildings  may  have  been  the  problem  which  caused  the                 
  ultimate damage.   How are those litigations handled?  Would                 
  it be the same as an airplane?                                               
                                                                               
  MR. FORD answered that there were similarities between those                 
  types of cases.  A large distinction is that with buildings,                 
  they  are  not  subject  to the  stresses  as  an  airplane.                 
  Buildings typically don't have  obvious defects, although  a                 
  defect may exist and may last  for 30 years before something                 
  happens.                                                                     
  REPRESENTATIVE GREEN  added there could  be exceptions  when                 
  one looks at an aftermath of  earthquake, for example.  They                 
  do fail primarily for either negligence or stress.                           
                                                                               
  MR. FORD stated in that sense, they are similar.                             
                                                                               
  Number 623                                                                   
                                                                               
  REPRESENTATIVE MACKIE felt the draft was not clear.  He felt                 
  it  needed to be clearly explained so there would not be any                 
  question for a judge to have to interrupt.                                   
                                                                               
  TAPE 93-39, SIDE B                                                           
  Number 001                                                                   
                                                                               
  CHAIRMAN HUDSON reiterated that some  the of questions would                 
  be posed to some of the witnesses following the testimony.                   
                                                                               
  Number 012                                                                   
                                                                               
  MR. FORD  brought up  Section 3  AS.09.10 stating  it was  a                 
  different limitation which  applies to  an action against  a                 
  health   care    provider.       The   exception    language                 
  "notwithstanding."  Moving to Section 2, again it is started                 
  with exceptions of  line 4, "Notwithstanding AS  09.10.140,"                 
  which  simply  means  there  are   exceptions  that  do  not                 
  presently apply to a lawsuit brought under this section.  If                 
  someone  were  to  bring  an  action based  on  professional                 
  negligence, there is  a definition of that.  If  one has two                 
  years  from the date  of the alleged  act.  There  is also a                 
  variation on that,  if one is  less than six  years of  age,                 
  then the action must  be brought before the person's  eighth                 
  birthday.    Those  two provisions  would  apply  to actions                 
  against health care providers.                                               
                                                                               
  MR. FORD explained there are  sections under subsection (b),                 
  again   the   fraud,   intentional   concealment   and   the                 
  undiscovered presence of  a foreign body is  an example like                 
  (a).  There is also an exception to this two year provision.                 
                                                                               
  Number 037                                                                   
                                                                               
  REPRESENTATIVE  MACKIE  referenced  the   health  provision,                 
  asking if it was a two year accrual.                                         
                                                                               
  MR. FORD answered that  it states, "two years from  the date                 
  of the alleged negligent  act or omission."  He  then stated                 
  it did not say "accrual," that it stated "two years from."                   
                                                                               
  CHAIRMAN HUDSON reiterated  it was  different from the  last                 
  section.                                                                     
                                                                               
  MR.  FORD  agreed  with  Chairman   Hudson,  adding  it  was                 
  different from the generic provision.                                        
                                                                               
  Number 041                                                                   
                                                                               
  REPRESENTATIVE MACKIE referenced number 2  "or if the person                 
  is less than six years  of age."  He felt it could have been                 
  something that occurred when the child was one year old, for                 
  example, had surgery prior to their sixth birthday, or prior                 
  to becoming eight  years of age.  The action  could still be                 
  brought up in that case of the infant or a small child.                      
  REPRESENTATIVE  NAVARRE stated  that  the argument  of child                 
  bearing, if there is a problem with the delivery, usually by                 
  the eighth birthday, it is  known if there is  developmental                 
  disability or other  harm which could  be attributed to  the                 
  birth.   What it  doesn't do  is if  someone had  corrective                 
  surgery done when they  are seven years old, they  only have                 
  until they are nine years old to bring up the case.  He felt                 
  it should be eight years from the time  of the procedure, in                 
  some cases.                                                                  
                                                                               
  Number 058                                                                   
                                                                               
  MR.  FORD  referenced Section  6,  stating there  were three                 
  changes.   On line 14, adding  "wrongful death" to a type of                 
  action  in  which  you  can  recover damages  from  personal                 
  injury.  This  change has already  been made by the  courts.                 
  Mr. Ford then referenced line 15, "BASED ON  NEGLIGENCE" and                 
  stated he  felt it meant  to simply  broaden so it  would no                 
  longer apply the non economic  damage limitations, simply to                 
  negligent actions.  What came  to mind were strict liability                 
  and intentional torts which would  amount to subject to  the                 
  provision, limiting non economic damages.                                    
                                                                               
  Number 071                                                                   
                                                                               
  REPRESENTATIVE   MACKIE   suggested   deleting   "based   on                 
  negligence."    He asked  if  he understands  correctly that                 
  negligence  no  longer  had to  be  proven  in  the case  of                 
  personal injury.                                                             
                                                                               
  MR. FORD answered in  the negative.  He explained  Section 6                 
  reads:  "In an action to recover damages for personal injury                 
  based on negligence."   He  then explained if  it was  taken                 
  out, it  would read:  "In  an action to recover  damages for                 
  personal  injury."   Damages  for  non economic  damages are                 
  limited.  He added that any action for personal injury would                 
  be limited by the provision.                                                 
                                                                               
  MR. FORD referred to the provision "limited compensation for                 
  pain  and suffering,"  and  said  in  order to  collect  non                 
  economic losses, described as pain and suffering, it limited                 
  the  following:   Pain,  suffering, inconvenience,  physical                 
  impairment,  disfigurement, loss  of  enjoyment of  life and                 
  other  nonpecuniary  damage.     He  added  that   "loss  of                 
  consortium" was added as well.                                               
                                                                               
  CHAIRMAN  HUDSON  asked   Mr.  Ford  to  explain   "loss  of                 
  consortium."                                                                 
                                                                               
  MR.  FORD explained  "loss  of consortium"  meant  someone's                 
  spouse.   If someone loses  their spouse, and  the enjoyment                 
  one received from  that companionship, they can  recover for                 
  the loss.                                                                    
                                                                               
  MR. FORD reiterated  that negligence actions are  limited in                 
  this manner.  By  taking the language out, it  would broaden                 
  the limitation.                                                              
                                                                               
  Number 100                                                                   
                                                                               
  MR. FORD brought the  attention of the committee  to Section                 
  7, stating  it was  the cap  on non-economic  damages.   The                 
  changes suggested were an effort to require the cap apply to                 
  single injuries  or death.  He was  not sure if the language                 
  would actually achieve its  goal.  Mr. Ford stated  that the                 
  existing  law  limited the  cap to  each  claim, based  on a                 
  separate incident or injury.  He  was not sure that limiting                 
  it to a single  injury or death  was very clear because  one                 
  could suffer multiple injuries in one incident.  He felt the                 
  committee  should  consider  looking  at  the language  very                 
  carefully, if  in fact, the  intent is  to limit the  cap to                 
  injuries that result from single incidents.                                  
                                                                               
  CHAIRMAN HUDSON suggested  the provision should  say "single                 
  incident" rather than "single injury."                                       
                                                                               
  REPRESENTATIVE  NAVARRE referenced line  20, "may not exceed                 
  $500,000  for  all claims,  including  a loss  of consortium                 
  claim," and said  he feels the language does  not need to be                 
  there.                                                                       
                                                                               
  MR. FORD agreed with Representative Navarre.                                 
                                                                               
  Number 124                                                                   
                                                                               
  MR. FORD  stated Section  8 was  a section  that requires  a                 
  certain  level of  evidence if  punitive damages were  to be                 
  awarded.  The draft  would add some new language  that would                 
  also  require evidence of a certain  thing.  Such as in line                 
  26, "malice  and conscious acts showing deliberate disregard                 
  of another  person  by the  person  from whom  the  punitive                 
  damages are sought."  It is being specific about the kind of                 
  evidence that is  wanted.  He  felt that typically what  one                 
  finds in cases that do award punitive  damages, is precisely                 
  this.  It could certainly be spelled out this way.                           
                                                                               
  Number 135                                                                   
                                                                               
  REPRESENTATIVE NORDLUND  asked Mr. Ford about  situations of                 
  recklessness or carelessness.                                                
                                                                               
  Number 138                                                                   
                                                                               
  MR. FORD did  not think carelessness  would fit.  He  stated                 
  they  were talking  degrees  of badness.    He didn't  think                 
  reckless would either.   Deliberate disregard does  not seem                 
  to be careless or  reckless.  They would have  the intent to                 
  do it.                                                                       
  MR. FORD  stated that  typically there  are negligent  acts,                 
  reckless  acts, and an intentional  acts, to put three broad                 
  categories on it.  He felt conscious acts showing deliberate                 
  disregard was actual reference to an intentional act.                        
                                                                               
  Number 151                                                                   
                                                                               
  REPRESENTATIVE MULDER asked Mr. Ford to  clarify what he was                 
  talking about  as when Ford had the  Pinto with the gas tank                 
  that  was  faulty.   Did  Ford  put  the  Pinto out  anyway,                 
  calculating  the fact that redesigning  the car was going to                 
  cost more than what computed damages were going to be.  That                 
  would be showing disregard, clear and convincing evidence of                 
  malice and conscious act?                                                    
                                                                               
  MR. FORD  agreed and explained that again a lot of the times                 
  it would be interpreted  by courts and juries.  To his mind,                 
  someone  manufacturing 200,000 vehicles  that they  know are                 
  defective would be a conscious act of deliberate disregard.                  
  REPRESENTATIVE MULDER  asked if it  was deliberate disregard                 
  in both drafts.                                                              
                                                                               
  MR. FORD answered in the affirmative.                                        
                                                                               
  Number 166                                                                   
                                                                               
  REPRESENTATIVE NAVARRE  asked how much,  after what punitive                 
  damage(indiscernible)  showing  by   clear  and   convincing                 
  evidence  which  is  already  the  standard, now  adding  an                 
  additional standard, which changes have occurred in awarding                 
  punitive damages since the 1986 change.  How many more would                 
  it reduce by putting in the additional language?                             
                                                                               
                                                                               
  MR.  FORD  answered  that  he  did  not have  any  facts  or                 
  statistics.   His  understanding  was  that  punitives  were                 
  awarded in  very few  cases.   The practical  effect of  the                 
  change would be very  little.  He did not have  any facts to                 
  support  it.   Someone could  check with  the court  system,                 
  which  might  have  some  actual  figures  on the  award  of                 
  punitive damages.                                                            
                                                                               
  Number 178                                                                   
                                                                               
  REPRESENTATIVE MACKIE referenced the  example Mr. Ford  used                 
  and  stated  that  if  a   car  manufacturer  built  200,000                 
  vehicles,  that  would be  considered  deliberate disregard.                 
  Did that mean that out of 200,000 cars, it came out that one                 
  car  was  defective  that  someone  bought  and  got  in  an                 
  accident, then there was clear  and convincing evidence that                 
  it was the  manufacturer's fault  for the defective  vehicle                 
  because it was  only one and not 200,000.  It would preclude                 
  anyone  from filing action  against the manufacturer because                 
  it was deliberate disregard but it was still their clear and                 
  convincing evidence that it was their fault.                                 
                                                                               
  MR. FORD  answered that  one would  have to  meet the  whole                 
  standard.   They  would have  to meet  clear and  convincing                 
  evidence  of malice  and conscious  acts  showing deliberate                 
  disregard.  Again, that would  be up to a jury to  determine                 
  what that was.  In the example he had used, he  was assuming                 
  all 200,000 vehicles  had the  defect, and the  manufacturer                 
  knew about it.   But they decided it was simpler to litigate                 
  than to go  back and  change the part,  which he  understood                 
  were the facts of the Pinto case.   He felt that one vehicle                 
  out of  200,000, it  would not  withstand.   He was  talking                 
  about the manufacturer, not installation.                                    
                                                                               
  REPRESENTATIVE MACKIE  referenced that as  he understood the                 
  complex issue, in the original  language, before the "malice                 
  and conscious acts  showing deliberate disregard,"  it would                 
  have to  be proven,  unless it  was supported  by clear  and                 
  convincing evidence  that it  was the manufacturer's  fault,                 
  for example.   Now in addition to  that, they would  have to                 
  prove that there was deliberate disregard of the whole works                 
  which if it was one vehicle that  is defective the day after                 
  it is driven off the lot, and it killed a family, they don't                 
  have the ability to recover damages  because it was only one                 
  vehicle  and  it  couldn't  be   proven  it  was  deliberate                 
  disregard.                                                                   
                                                                               
  MR.  FORD  answered it  was  just  punitive  damages he  was                 
  speaking  of.  Damages are  intended to punish someone above                 
  and  beyond what one would  give someone for their injuries.                 
  I am assuming  they would recover  all the damages they  are                 
  entitled to compensate them for their injuries.                              
                                                                               
  REPRESENTATIVE MACKIE stated he meant  a jury couldn't award                 
  punitive damages unless deliberate disregard was proven.                     
                                                                               
  MR. FORD answered  in the  affirmative.  One  would have  to                 
  meet the standards to award punitive damage.                                 
                                                                               
  REPRESENTATIVE MACKIE stated  it was, in effect,  the way to                 
  limit the size of the award.                                                 
                                                                               
  MR. FORD answered it would have  that practical effect.  But                 
  he did  not think punitive  damages are awarded  very often.                 
  For those cases that do, yes, it would eliminate those.                      
                                                                               
  Number 219                                                                   
                                                                               
  REPRESENTATIVE  FINKELSTEIN thought it  was usually in cases                 
  where it is a  big company and the economic  damages are not                 
  considered significant enough to have an  effect on it.  One                 
  is not  cheating the punitive  effect because the  amount of                 
  money   is  so   insignificant  from  the   actual  economic                 
  (indiscernible), you would have to get  their attention.  In                 
  those types of  cases, he did not know  where one could find                 
  malice.  For instance, the example  for the auto company, he                 
  did not see any malice.  Since it would have to be clear and                 
  convincing evidence of malice and  conscious act, he felt in                 
  the  example,  they  would never  suffer  punitive  damages.                 
  There was not malice involved.                                               
                                                                               
  Number 228                                                                   
                                                                               
  MR. FORD reiterated if one presumes it has to be directed to                 
  them personally,  then yes  it would  not have  malice.   He                 
  added that it could  also be interpreted as disdain  for the                 
  public in general.                                                           
                                                                               
  REPRESENTATIVE FINKELSTEIN added he did not think malice was                 
  just disdain.  He felt it  was way beyond that.  Disdain  is                 
  indifference and malice, is pretty  horrible intentions.  He                 
  referenced the auto company  and stated it might  be covered                 
  and it should  be recognized  that there is  no evidence  of                 
  malice involved in the case.                                                 
                                                                               
  Number 239                                                                   
                                                                               
  REPRESENTATIVE NAVARRE agreed  and added  that in the  Pinto                 
  case,  most would want to make sure  that it meant that Ford                 
  Motor Company  was going  to be  held for  punitive damages.                 
  But, in fact, he felt the definition of malice might be that                 
  if "or" was  put in,  it might work.   Certainly  "conscious                 
  acts showing deliberate  disregard" could cover it,  but not                 
  if there was  "malice and conscious  acts" because, in  that                 
  case, they did  not want anyone to get hurt.  They were just                 
  hoping nothing would happen.                                                 
                                                                               
  Number 252                                                                   
                                                                               
  MR. FORD referenced  Section 9,  stating it was  cap on  the                 
  amount someone could get for punitive  damages.  It is three                 
  times the amount of compensatory  damages for $200 thousand,                 
  whichever is greater.   He felt  the intent was  to avoid  a                 
  situation   where   someone   obtains   $50   thousand   for                 
  compensatory damages and $500 million in punitive damages.                   
                                                                               
  Number 261                                                                   
                                                                               
  REPRESENTATIVE  NAVARRE stated that  already with  the clear                 
  and convincing standard, and  adding the additional language                 
  that "malice and a conscious  acts with deliberate disregard                 
  of another person,"  and then limiting the amount  one could                 
  collect,  undermines the whole idea behind punitive damages.                 
  The reason was if Ford Motor Company, in the Pinto case, was                 
  charged with $200 thousand punitive damages, then they could                 
  have surely  made a  conscious  decision to  make sure  that                 
  every one of the Pintos got sold in Alaska because then they                 
  could afford it.  That is what it would mean.                                
                                                                               
  REPRESENTATIVE PORTER referenced the first  time he read the                 
  section,  he thought  $200 thousand  was  the maximum.   Two                 
  hundred thousand dollars was  not the maximum.  It  would be                 
  the maximum if  the compensation was less  than one-third of                 
  that - $66 thousand.                                                         
                                                                               
  MR. FORD agreed.                                                             
                                                                               
  REPRESENTATIVE PORTER added in the Pinto case, they have 200                 
  or 300  claims and  it was only  going to  total $5  million                 
  compensation, it could institute $15  million or three times                 
  for punitive damages.                                                        
                                                                               
  REPRESENTATIVE NAVARRE asked what  the punitive damages were                 
  in the Pinto case.                                                           
                                                                               
  MR. FORD answered he  remembered one case in which  the jury                 
  awarded $100 million.                                                        
                                                                               
  Number 286                                                                   
                                                                               
  CHAIRMAN HUDSON asked if a court could modify an application                 
  of three times the amount of  compensatory damages.  Did the                 
  court or the  judge have the authority to change  that or go                 
  above that?                                                                  
                                                                               
  MR. FORD answered in the negative.  The law would have to be                 
  rewritten.                                                                   
                                                                               
  Number 295                                                                   
                                                                               
  MR.  FORD  moved  to  Section  10,  stating,  "The  existing                 
  provision, added  in 1986,  was intended  to prohibit  those                 
  people  who  committed  crimes  from  recovering  for  their                 
  injuries.   The changes that would  be made, on line  5, the                 
  language being taken  out required someone being  engaged in                 
  commission  of  a  felony,  it  would  be  broadened  to  be                 
  `attempting  committing  on  fleeing  from.'"   Also  to  be                 
  eliminated is the  requirement that the person  be convicted                 
  of a felony.  Lastly, on line 8, being taken out is the word                 
  "felony" and substituting it with "action."   On lines 9 and                 
  10, delete "an  exception for  certain civil rights  actions                 
  under 42 U.S.C. 1983."                                                       
                                                                               
  REPRESENTATIVE MACKIE asked if it  was attempting to address                 
  the situation as the landmark case, referenced in the Juneau                 
  Empire, where a man was suing for his emotional suffering.                   
  MR. FORD stated it could apply  if the injuries in suffering                 
  resulted from his crime he committed.  He added one comment,                 
  stating  as  he  first  read the  section,  he  thought that                 
  fleeing from the commission of a felony intended to refer to                 
  the person  committing the felony,  and not to  someone who,                 
  for example, witnesses a bank robbery and runs out the door.                 
  He felt that  "attempting to commit or  committing" actually                 
  came from "fleeing from."                                                    
                                                                               
  REPRESENTATIVE NORDLUND asked who was  to prove that someone                 
  was attempting to commit a felony.                                           
                                                                               
  MR. FORD answered  that under the  existing law, the  person                 
  would have to be  convicted.  Under the provision,  it would                 
  be a battle in a civil suit.  There could  be a case where a                 
  person was actually acquitted, and they had criminal action,                 
  but was precluded  from recovering personal  injury damages.                 
  The  jury  would  find  that,   yes,  someone  was  actually                 
  attempting to commit a felony.                                               
                                                                               
  REPRESENTATIVE NORDLUND asked if in a civil  suit, one would                 
  bring in all kinds of evidence.                                              
                                                                               
  MR. FORD  answered in the  affirmative and added  there were                 
  different burdens.   Criminal action had a  different burden                 
  of proof than a civil action.  One can see that today in the                 
  DEI laws, there are  dual DEI provisions basically.   One is                 
  an  administrative  procedure  where  one  will  lose  their                 
  license and one is  a criminal action.  There  are occasions                 
  where someone is acquitted of a criminal action and yet they                 
  still lose their license in the administrative action.   The                 
  same thing happened here.                                                    
                                                                               
  REPRESENTATIVE  NORDLUND asked if  in some particular cases,                 
  would it be likely to create some new issues.                                
                                                                               
  MR. FORD answered in the affirmative.                                        
                                                                               
  REPRESENTATIVE  PORTER  added that  one  of the  things that                 
  would be  covered, is  an  individual who  is killed,  while                 
  attempting a felony, and is never  convicted.  But his heirs                 
  might take off after (indiscernible).                                        
                                                                               
  Number 349                                                                   
                                                                               
  REPRESENTATIVE  FINKELSTEIN  did  not   understand  the  DEI                 
  example because  of looking at  the DEI, the way  the law is                 
  written, it did  not say in  the civil section that  someone                 
  was  involved  in  a  DEI  crime.    It  only  talked  about                 
  particular circumstances that might  fit it.  What was  done                 
  was referenced a criminal conclusion in  a civil action.  It                 
  did not seem like it was exactly  the same situation.  It is                 
  not  committing  an   action  that   involves  certain   and                 
  particular damages, it is saying, committing a felony, which                 
  is a  criminal conclusion.   He  still shared the  confusion                 
  Representative Nordlund had.   He did  not think it was  the                 
  same as a  DEI because  it is  referenced in  action, not  a                 
  separate  criminal  conclusion.    A  felony is  a  criminal                 
  conclusion, not an action.                                                   
                                                                               
  MR. FORD  stated a  felony was  a conclusion  in a  criminal                 
  prosecution, but they were speaking of a civil suit.                         
                                                                               
  REPRESENTATIVE MACKIE asked a question referencing a lawsuit                 
  in the newspaper, where  a man had gotten a DEI  was suing a                 
  liquor store for financial damages  the man suffered because                 
  he  got  his DEI,  because  the  liquor store  sold  him the                 
  liquor.  How does a case such as that apply to what is being                 
  spoken about?                                                                
                                                                               
  MR. FORD answered the man would  not be committing a felony.                 
  The existing law would not apply.                                            
                                                                               
  REPRESENTATIVE  PORTER  added that  he  felt it  would apply                 
  (indiscernible).                                                             
                                                                               
  MR. FORD referenced something to keep  in mind was there was                 
  a  comparable  negligent system.    Supposedly, when  one is                 
  negligent in causing one's own injuries, whatever that is or                 
  what percentage of recovery that is, that's (indiscernible).                 
                                                                               
  Number 398                                                                   
                                                                               
  REPRESENTATIVE  DAVIDSON referenced  Mr.  Ford's comment  on                 
  creating some new issues and felt  it seemed there were many                 
  new issues created throughout the legislation.  He asked  if                 
  it was not  true that the fact they were  creating these new                 
  issues   would  have  the  effect  of  expanding  prolonging                 
  litigation rather than expediting litigation.                                
                                                                               
  MR. FORD answered by saying that was a very hard question to                 
  answer.  In all  fairness to the sponsors  of the bill,  the                 
  system is constantly  changing.  The courts  change the law,                 
  this is enacted by the legislature to change the law, and it                 
  is  not  a static  fixed thing.    It often  changes through                 
  litigation.  The  best answer  he could give,  would be  the                 
  best job the legislature did to draft legislation would make                 
  that  easier.     It   would  make   the  litigation   less.                 
  Oftentimes, changes  the legislature  makes to  statutes, or                 
  creation  of  statutes, will  add  to a  litigation process.                 
  Maybe only in  the short running, maybe in  the long run, it                 
  depends on the perspective.   Maybe over a period  of twenty                 
  years, there  will  be less  litigation.   Often changes  to                 
  statutes result in challenges.                                               
                                                                               
  Number 424                                                                   
                                                                               
  MR.  FORD referenced Section 11, stating  it was a provision                 
  that requires  the  verdict to  be  itemized and  an  amount                 
  awarded for certain  types of damages  to be reduced by  any                 
  income  tax liability that may exist.   He felt it spoke for                 
  itself.                                                                      
                                                                               
  Number 443                                                                   
                                                                               
  REPRESENTATIVE PORTER stated that the  reason Section 11 was                 
  included, as  he  understood  it,  was the  awards  are  not                 
  taxable.  What one  ends up doing is paying  a person money,                 
  say for an  economic loss of wages  of $50 thousand  a year.                 
  He would  have had  to pay  taxes, resulting  in his  really                 
  receiving $30 thousand.   Since it is not a  taxable revenue                 
  for  the individual,  award for damages,  he is,  in effect,                 
  getting $20 thousand  more than he  would have in the  first                 
  place.                                                                       
                                                                               
  REPRESENTATIVE NAVARRE stated the bill works  in conjunction                 
  with  other  sections  of the  bill  and  if  it is  already                 
  limiting to a  set amount, one  further reduce that  amount,                 
  whatever it  comes up with  by the  amount that is  equal to                 
  taxes.                                                                       
                                                                               
  REPRESENTATIVE PORTER stated  they could certainly ask  that                 
  it be clarified.                                                             
                                                                               
  Number 463                                                                   
                                                                               
  MR. FORD moved  to Section  12, stating it  was a  provision                 
  that required a portion  of a judgement owed to  an attorney                 
  under a contingent fee agreement, reduced to a present value                 
  and paid in a lump sum.  He felt it spoke for itself.                        
                                                                               
  REPRESENTATIVE BROWN asked what public benefit, to be served                 
  by the provision, would be achieved.                                         
                                                                               
  Number 485                                                                   
                                                                               
  CHAIRMAN HUDSON  stated he  felt they  should hear from  the                 
  other people  wanting to testify on the  bill, as to some of                 
  the  reasons  why.    He  added  that  something  which  was                 
  mentioned  to  him  was  attorneys  quite  often  end  up in                 
  litigation  where  they  have  to  front  their  own  travel                 
  expenses  to go  and get  depositions and  their own  office                 
  expenses, etc.,  and the whole  thing is to  try to  get the                 
  money that they have already expended back into their hands.                 
  The apportionment  section is  where the  settlement to  the                 
  victim or  to the  plaintiff can  be dealt  with over  time.                 
  Again, to help  the victim  receive funds over  a period  of                 
  time rather than one time  and then be pounced upon by  your                 
  troop.                                                                       
                                                                               
  Number 495                                                                   
                                                                               
  REPRESENTATIVE  PORTER added  it was  his understanding  the                 
  presumption was that the monies due an attorney are for work                 
  done up to  time of trial  and award.   The attorney has  no                 
  further committal to work on the case afterwards.  The funds                 
  that  the  person  has  earned, should  be  paid  in today's                 
  dollars, whereas  the victim  is being  compensated for  the                 
  future  earnings  that  might  have  future  (indiscernible)                 
  considerations.  You shouldn't  pay an attorney inflationary                 
  rate  ten years  down the  road for work  that was  done ten                 
  years ago.                                                                   
                                                                               
  REPRESENTATIVE  BROWN  asked what  the  significance  was of                 
  deleting "an injured" on lines 26 and 27, as  it seemed like                 
  the way it was  before, if the  injured party wished to  get                 
  periodic  payments then  the  (indiscernible)  was going  to                 
  structure in that manner.   Now it is  being changed to  the                 
  person who is  paying the  payments and saying  that to  the                 
  maximum extent feasible, they are going  to be structured as                 
  periodic payments rather  than a lump  sum which might be  a                 
  more  beneficial (indiscernible).  She asked if that was the                 
  effect of  taking out  "an injured" on  lines 26 and  27, to                 
  give  that  option to  the person  that  was paying  out the                 
  money.                                                                       
                                                                               
  REPRESENTATIVE PORTER answered in the affirmative.  If it is                 
  a valid method of  paying out money, both the  plaintiff and                 
  the defendant should have the option (indiscernible).  If it                 
  is an  (indiscernible) way,  it was  a proposal  in 1986  or                 
  1988, "an injured party" was snuck in at the last minute.                    
  REPRESENTATIVE  BROWN  asked  what if  the  company  that is                 
  paying  the damages  out, over  time, goes  bankrupt or  the                 
  insurance company folds, didn't it put a lot of  risk on the                 
  person who is supposed to be recovering (indiscernible).                     
                                                                               
  REPRESENTATIVE PORTER answered that it  may be that there is                 
  a greater ability  for a company to pay the  kind of funding                 
  over a period of time than it  would be to come up with  one                 
  lump sum.  Either one of those might balance off  the other.                 
  There are no guarantees.                                                     
                                                                               
  Number 544                                                                   
                                                                               
  REPRESENTATIVE NAVARRE  stated he  was the  chairman of  the                 
  Labor and Commerce committee in 1986,  when the bill came up                 
  and  the provision  was not snuck  in.   It was put  in as a                 
  conscious decision by  the committee, the reason  being that                 
  the idea behind  tort law was to make the  victim whole, the                 
  injured party whole.  If the injured party  felt that it was                 
  in their  best interest, then  they could choose  a periodic                 
  payment.  The periodic payments are done, a lot of the time,                 
  at the request of the injured party or through  negotiations                 
  by their attorney, but forcing them to accept it, even if it                 
  may not be  in their best interest,  but in the interest  of                 
  the person paying, just didn't seem to make sense.                           
                                                                               
  REPRESENTATIVE  PORTER  responded  by  saying  his point  of                 
  supporting the provision,  is that making a person whole, in                 
  his mind, didn't mean giving that  person more money than he                 
  or she  would have  had prior  to the  injury.   In case  of                 
  (indiscernible),  if the  person is 20  years old  and would                 
  have earned $2 million  in their life time, giving  them two                 
  million dollars now, and the  financial benefit that amounts                 
  to, over and  above what they  would have had, isn't  making                 
  them whole.   That is  making them  rich and  it isn't  what                 
  compensation is designed to do.                                              
                                                                               
  Number 622                                                                   
                                                                               
  REPRESENTATIVE  NAVARRE felt  if there was  a limit  of $500                 
  thousand for  the total  claim, and  it was  reduced to  the                 
  present  value,  he  thought  if  they  were  going  to  put                 
  provisions like that in, the difference between the lump sum                 
  of   $500   thousand,   today   versus   periodic    payment                 
  (indiscernible) then it would probably  be $300 thousand, if                 
  you go over  20 years, you're  paying maybe  less.  "If  you                 
  have $500 thousand  and I  owe you $500  thousand, there  is                 
  $500 thousand at risk.   Now if I say, I'll pay that  to you                 
  at $10 thousand a year  for 50 years, then you'd  say 'b.s.,                 
  the volume of that is $500 thousand, I want my $500 thousand                 
  now.'   Well I'm going  to pay  you $500 thousand,  its just                 
  going to be in periodic payments."  That  needs to make sure                 
  we have that clarified because then  you have to pay $10,000                 
  for one hundred years.                                                       
                                                                               
  REPRESENTATIVE  MULDER   felt  the  whole  intent   was,  as                 
  Representative Porter pointed out, not to make somebody rich                 
  overnight.   It was to  be a reasonable alternative  to be a                 
  lump sum  at once.  To say, if  someone or their heir was to                 
  receive $500 thousand, it would  be reasonable for the court                 
  to work out  a ten  year payment period  whereby they  would                 
  receive an amount each year as  opposed to make Mike Navarre                 
  a millionaire overnight.                                                     
  REPRESENTATIVE NAVARRE used  another hypothetical  situation                 
  where  someone  winds up  a  quadriplegic  and there  is  no                 
  question about who was at fault, and they go to court anyway                 
  because they do that a lot, and they end up winning whatever                 
  the maximum is, and at that point...                                         
  (end of tape).                                                               
                                                                               
  TAPE 93-40, SIDE A                                                           
  Number 001                                                                   
                                                                               
  REPRESENTATIVE DAVIDSON agreed and stated  he felt they were                 
  "tweaking" the system so much that while they were stumbling                 
  over themselves to  prevent a victim  that had been  damaged                 
  severely, in  many instances, they  didn't want them  to get                 
  rich.  It seemed that they were tweaking the system so  much                 
  that they were  making it a  bonanza for wrongdoers.   Maybe                 
  what needed  to be  done was  to insure  that there will  be                 
  payment over the long term.  Maybe there is a bond mechanism                 
  that can be included  to insure that there will  be payment.                 
  There  are no  guarantees, we  all understand  that, but  it                 
  seemed  to be an effort that so many people are getting away                 
  with so much.   That's not how  I read the news  these days.                 
  We've already heard how punitive  damages are rarely awarded                 
  but I think we have to stay focused on who we are  trying to                 
  insure, at least  has an opportunity  to survive.  We  don't                 
  want to re-victimize people because we "tweaked" them out of                 
  the system of  financial well-being.  These victims  are the                 
  very  ones who  are going  to need  more  care, undoubtedly,                 
  because of the nature of their injuries or their losses.                     
                                                                               
  Number 016                                                                   
                                                                               
  CHAIRMAN HUDSON stated because of  timing, he wanted to move                 
  on through the bill, adding there  will be ample opportunity                 
  for the  philosophy and  for the  policy commissioners,  and                 
  who's harmed  who and what the value and  why, etc.  He then                 
  asked Mr. Ford to continue.                                                  
                                                                               
  Number 018                                                                   
                                                                               
  MR. FORD referenced Section  13, stating it was a  provision                 
  that  specified  when  one  is  entitled to  receive  future                 
  damages that they specify the  recipient, the dollar amount,                 
  the  payment and the amendment here  would also require that                 
  any future payment include increases for inflation.                          
                                                                               
  MR. FORD referenced Section 14,  stating it was a collateral                 
  benefits section that was basically the  existing collateral                 
  benefits  section that  they  have  for medical  malpractice                 
  actions.    At  present, there  are  two  slightly different                 
  systems.   There is a  collateral benefits provision  in the                 
  existing  law  that  is  repealed  and  reenacted  with  the                 
  provision.  A  collateral benefit  is simply, something  you                 
  receive, either from insurance or some kind of other source,                 
  private  or  public,  in addition  to  the  compensation you                 
  received in  your lawsuit.  The  idea of the section  was to                 
  prevent double recovery.                                                     
                                                                               
  REPRESENTATIVE NORDLUND referenced the exception for  social                 
  security  (indiscernible).   These  are provisions  from the                 
  federal government, and yet they don't  have any of the same                 
  provisions under the state  law.  In other words,  you can't                 
  segregate the  state benefits  under this  provision of  the                 
  bill, but you have to segregate the federal benefits.                        
                                                                               
  MR. FORD  answered that  one cannot  recover both  benefits.                 
  Sometimes there  are exceptions  in the  provision for  some                 
  benefits,  that  by  federal law,  you  are  not  allowed to                 
  segregate.    You are  not  allowed  to exclude  under  this                 
  provision,  one  of  which is  a  benefit  under the  social                 
  security act.                                                                
                                                                               
  MR.  FORD moved to Sections 15, 16 and 17, stating they were                 
  all like  a package,  resulting from  a suggestion  from his                 
  office.   In the enactment  of the  changes in 1986,  by the                 
  legislature, one of  the things the  legislature did was  to                 
  allow a person  who is released  from the lawsuit to  settle                 
  their  cases and get  out.  After  the adoption of  the 1986                 
  changes, the initiative, actually  adopted in 1988, repealed                 
  the entire chapter of  the law.  That  repeal resulted in  a                 
  cross  reference in the  1986 provisions that  was no longer                 
  accurate.  In  reference, the  provision no longer  existed.                 
  What is  being attempted, is  simply to provide  in statute,                 
  what happens when one, in  fact, releases someone, when  the                 
  lawsuit is settled.  This clears  out the glitch that is  on                 
  the books at present.                                                        
                                                                               
  Section 18 is  the provision that  is intended to  encourage                 
  people against  some of their  lawsuits.   The existing  law                 
  provides a penalty to someone who, in fact, refuses an offer                 
  of settlement that was made in good faith, and turned out to                 
  be a good  offer; or someone who refuses to  accept an offer                 
  from someone who  is being sued.   This changes the  penalty                 
  portion.  The existing penalty only affects the interest one                 
  receives  on  their  money.     The  new  penalty  provision                 
  substitutes actual costs and attorney  fees, as the penalty.                 
  Essentially, it is  intended to  encourage people to  settle                 
  their cases.  An example:  "If I am suing you, Mr. Chairman,                 
  and  I offered you $10 thousand  to settle our case, and you                 
  said, 'No!'  In fact, I recover $50 thousand from you,  then                 
  you would  be penalized.   I  would be foolish  to make  the                 
  offer, but....anyway  you  would be  penalized."   It is  an                 
  incentive  to  settle  your lawsuits,  it  just  changes the                 
  penalty that  applies if someone,  in fact, does  not settle                 
  their case when they should have.                                            
                                                                               
  Section  19 is  the  provision that  specifies  the rate  of                 
  interest on judgments.   Rather than  a flat 2 1/2  percent,                 
  which is existing law, they would actually float the rate at                 
  3 percent above the  federal reserve discount rate.    There                 
  would be a floating interest rate  on the judgments close to                 
  fixed 10 1/2 percent.                                                        
                                                                               
  Section 20 is the provision  that prohibits certain interest                 
  to  be  awarded.   The type  of  interest is  free judgement                 
  interest.  It is interest someone would get from the date of                 
  injury to the date  of judgement.  People will  no longer be                 
  able  to  get  prejudgment  interest  or  certain  kinds  of                 
  damages.    Future  economic  damages,  future  non-economic                 
  damages and  punitive damages, all  are getting  prejudgment                 
  interest for those items under this provision.                               
                                                                               
  Section 21 is  a technical reference because  the collateral                 
  benefits  section  was appealed  and moved.    It is  only a                 
  technical amendment.                                                         
                                                                               
  Section  22,  again  is  a  technical amendment  because  of                 
  Section 23.   Section 23 is  a limitation on the  amount one                 
  can receive  under a  lawful death  action, if  there is  no                 
  spouse, minor child, or dependent  who survives the deceased                 
  person.  Right  now wrongful death  is limited to  pecuniary                 
  losses if there are no survivors.   Under this provision, it                 
  is limited to $10  thousand, placing a cap on the amount you                 
  can get for pecuniary damages.                                               
                                                                               
  CHAIRMAN  HUDSON  asked  if  this  was  where  there  is  no                 
  immediate next of kin.                                                       
                                                                               
  MR.   FORD  agreed,   adding  no   father,   mother,  child,                 
  grandchild, sibling, spouse, or dependent.                                   
                                                                               
  REPRESENTATIVE PORTER  asked Mr. Ford  to explain  pecuniary                 
  damages.                                                                     
                                                                               
  MR. FORD  stated it was money losses.   It is what one would                 
  have  received  had  the  person   lived  through  a  normal                 
  lifetime.                                                                    
                                                                               
  REPRESENTATIVE BROWN  asked how it  would affect non-married                 
  partners,  homosexual  partners  that  are  not  technically                 
  spouses.                                                                     
                                                                               
  MR. FORD stated there was not a definition of spouse in  the                 
  provision,  but  assuming   the  traditional  definition  is                 
  accepted, they would probably not count.  He did not believe                 
  the court has held an unmarried partner as a spouse.                         
                                                                               
  Number 104                                                                   
                                                                               
  REPRESENTATIVE NAVARRE asked if a  parent lost a child, what                 
  was it worth.                                                                
                                                                               
  MR. FORD answered  it would not  apply in this case  because                 
  there would be a survivor.                                                   
                                                                               
  REPRESENTATIVE NAVARRE agreed there would  be a survivor but                 
  it wouldn't be a spouse, a minor child or a dependent.                       
                                                                               
  MR. FORD answered it would be a father or mother.                            
                                                                               
  REPRESENTATIVE  MACKIE  asked  under  "dependent,"  did  the                 
  definition allow for all of that.                                            
                                                                               
  MR. FORD answered in the affirmative.  If someone lost their                 
  child, this would not apply to them.                                         
                                                                               
  REPRESENTATIVE NAVARRE stated it did say  that.  It states a                 
  dependent  means  a  father, mother,  child,  grandchild  or                 
  sibling who was dependent  upon the deceased at the  time of                 
  death.  If  it is a single  child family and the  child gets                 
  killed, how are they dependent on them?                                      
                                                                               
  MR. FORD answered, assuming that is true, then correct.                      
                                                                               
  Number 127                                                                   
                                                                               
  MR.  FORD referenced  Section 24,  stating it  was rule  82,                 
  attorney fees provision.                                                     
                                                                               
  REPRESENTATIVE MACKIE referenced  the pecuniary  description                 
  was only meaning  a monetary value  that one could  actually                 
  put a value on that one  would have received from the person                 
  in the future.  How can one put a dollar figure on something                 
  like that?                                                                   
                                                                               
  MR. FORD answered that often it was very difficult.  He then                 
  moved to Section 24, stating it was the provision that would                 
  eliminate attorney  fees except  in certain  cases.   Unless                 
  there is  a  statute that  allows it  or unless  there is  a                 
  grievance to the  parties, that you do not  receive attorney                 
  fees  in  a civil  action  for  personal  injury,  death  or                 
  property damage.   This is different from  the existing law,                 
  in  that  now you  do get  attorney  fees for  certain civil                 
  cases.  This also  affects a court rule which we  have noted                 
  in the bill.                                                                 
                                                                               
  Section 25 applies to civil liability  of hospitals for non-                 
  employees.   It is actually brought  about by one particular                 
  case, Jackson versus Powers.  Under this provision, a health                 
  care provider who is not an employee of  the hospital, or an                 
  actual agent,  is in the hospital is  not going to be liable                 
  for the negligence.  Basically,  the hospital, itself, would                 
  not be liable.  The health care provider may be liable.                      
                                                                               
  Simply because the hospital allows its facilities to be used                 
  by a doctor,  they are  not going  to be held  liable.   The                 
  hospital is still responsible for their negligence.                          
                                                                               
  Section 26 is our repealers and I am not going to go through                 
  it except for  one.  There is  a provision in 09.17  that is                 
  repealed by the  bill that  relates to non-economic  damages                 
  (indiscernible).  It  is line 17.010(c) which  provides that                 
  our  limitation  on   (indiscernible)  does  not  apply   to                 
  disfigurement or severe physical impairment.  This provision                 
  was  repealed.   The  other provision,  040(c), is  simply a                 
  method  for awarding  future  damages.   You  might like  to                 
  examine  that.   The decision  made  in 1986  allowed future                 
  damages to the award of a certain method.  This will  repeal                 
  that method.  The last repealer deals with collateral source                 
  and we needed to  do that because we  have a new  collateral                 
  source rule.  We are simply eliminating the dual  provisions                 
  from  one  to one  provision  in  the bill.    The remaining                 
  provisions deal with  (indiscernible).  We did  have several                 
  (indiscernible) provision, we don't  like to do that  but we                 
  were persuaded to  do that.  (indiscernible)  section would,                 
  of course, limit  the applicability of the bill  to lawsuits                 
  filed after the effective date of the bill.                                  
  We do have an effective date of July 1, 1994.                                
                                                                               
  That concludes the bill.                                                     
                                                                               
  Number 165                                                                   
                                                                               
  CHAIRMAN HUDSON thanked Mr. Ford.  He stated  everyone could                 
  see it was a complex and intricate area.                                     
                                                                               
  MR. FORD added  one more remark.  He compared  the August 27                 
  version with the August 25  version and they are  identical.                 
  He thought it was  simply a matter of when they  ran off the                 
  copies.  They are the same version.                                          

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