Legislature(1993 - 1994)
02/03/1994 03:00 PM L&C
* first hearing in first committee of referral
= bill was previously heard/scheduled
= bill was previously heard/scheduled
HB 292 - CIVIL LIABILITY Number 416 CHAIRMAN HUDSON brought up HB 292 and stated that the work draft now before the committee was dated 2/2/94. Number 440 REP. GREEN moved CSHB 292(L&C) dated 2/2/94. No objections were heard; it was so ordered. Number 460 REP. PORTER stated there were a couple of areas of concern brought up by Mike Ford that the committee needed to discuss. Number 480 MIKE FORD, Staff Attorney, Legal Services, raised three points for the committee's consideration. Mr. Ford provided the committee with a written detailed memo that appears below. 1) By adding the phrase, "was discovered or should have been discovered by the exercise of reasonable diligence" to Sec. 09.10.065(a)(1) in section 4, I believe the committee has adopted existing law applicable to determining when the clock starts for purposes of application of statutes of limitation. In legal terms, this date is also known as the date when a cause of action "accrues." The significance of this relates to another section of the draft section 6. In section 6, the current two-year statute of limitation for a tort suit is reenacted as section 09.10.075. This two-year limit that requires a tort suit should be brought two years from the date of accrual, or two years from when a person knows or should know that that the person has a claim. In short, there are two almost identical provisions relating to accrual of an action, one contained in section 4 and another in section 6. This may lead to confusion and unnecessary litigation over the enactment of similar provisions of law applicable to the same lawsuit. One solution to this situation is to change section 09.10.065 in a manner that leaves sec. 0910.075 as the applicable statute of limitation. This would create one two-year statute for all tort suits, except when a shorter period is imposed under another provision of law. 2) In section 4, section 09.10.065(a)(1) appears to allow two years to bring a negligence action against a healthier care provider. The key point is that the committee amended this provision to allow a person two years from when the injury is discovered or should have been discovered to bring suit. It appears that this rolling two-year period would be cut off by the provisions of section 3. Under section 09.10.052(a)(3), in section 3, a person has six years from the date "of the last act alleged to have caused the person injury, death, or property damage" to bring suit. Under this provision, I believe that a person negligently injured by a health care professional would have only six years from the date of injury to bring a lawsuit, not two years from the date the person discovers or should have discovered the injury as contemplated in section 4. In short, if the committee wishes to retain the rolling two-year discovery limit for actions against a health care provider, then it is necessary to amend section 09.10.052 in section 3 to ensure this occurs. 3) In section 7(AS 09.17.010(c), section 9(AS 09.17.020(c), and section 25 (AS 09.55.580(h), I have deleted the requirement that a person be convicted of the offense and substituted language regarding attempting, committing, or fleeing the commission of the class A or unclassified felony. Requiring that the person bringing the action be a "victim of that offense" raises a question concerning a person who was "fleeing" from the crime. It is unclear whether a person injured by a person fleeing a class A or unclassified felony would also qualify as an exception to the cap on noneconomic damages. For example, assume that a person commits a class A felony and then flees the crime by car. While heading down G street the offender inures a pedestrian. Was the pedestrian a "victim of the offense" as required under this language? The problem is also illustrated by looking at the language in AS 09.17.030 (in section 10). If the language in section 10 were used, the benefits of the law would apply to the pedestrian in the example because the amended language requires that the act of fleeing the class A felony relate to the pedestrian's injury, not that the pedestrian be a victim of the class A felony. Number 570 REP. PORTER moved to delete in section 4 (a)(1) and renumber. No objections were heard; it was so ordered. Number 593 MR. FORD gave an example of the concern he outlined in number two above: If a doctor is negligent in some way, seven years go by before you know about it; none of the exceptions apply; it wasn't intentional, wasn't gross negligence, wasn't fraud, then you would lose that claim under this language. REP. PORTER replied that that is absolutely correct. He added that is what a statute of repose is. REP. PORTER was surprised to see that the current version of HB 292 did not contain the exception to the statute of repose that covered the instance: if a doctor performing surgery leaves something inside of a person and the person doesn't discover it for 20 years. Rep. Porter said he does not remember that provision being deleted. TAPE 94-8, SIDE B Number 001 MR. FORD stated there was that provision at one time. REP. MACKIE asked what action took that provision out. Number 015 MR. FORD did not recall when that provision was taken out. Number 025 REP. MACKIE stated for the record that he had specifically brought this concern up before and felt comfortable that this was taken care of. Number 035 REP. PORTER stated that the wording as Mr. Ford mentioned, the limitation imposed under (A) of this section which is the six year statute of repose, is suspended until resolved. "During any period in which there is fraud, intentional concealment, etc., the undisclosed presence of a foreign body, that has no therapeutic or diagnostic purpose or effect, in the body of the injured person and the action is based on the presence of the foreign body." Number 040 MR. FORD said the langauge just stated does appear in the original HB 292, but it appears in the section against health care providers. Number 048 DANIELLA LOPER, staff, Rep. Brian Porter, stated that "that langauge was deleted because on the accrual date it was felt that, according to the discovery rule, since you could discover it any time, and the statute of repose was not in question yet." Number 050 MR. FORD agreed and added that it was felt at that time that the langauge was duplicative, but if the committee wanted that exception to remain, then they should reinsert the langauge. CHAIRMAN HUDSON stated that this was the intent of the original bill and asked Mr. Ford to prepare an amendment to reinsert the language. Number 056 CHAIRMAN HUDSON asked Mr. Ford to prepare an amendment to reinsert the language. Number 065 MR. FORD explained his last concern by using the following example: If a person has committed a crime, class A or unclassified felony, they leave the scene and three blocks away they hit and kill a pedestrian. Is the pedestrian a person who is not subject to the cap on noneconomic damages? MR. FORD asked if the committee intended that any resulting injury from fleeing the crime would eliminate the cap or did they intend to limit recovery to those victimized during the commission or attempt to commit a crime? Number 197 REP. PORTER suggested the committee delete the language "or fleeing" on page 6, line 12, page 6, line 27, and page 13, line 13. There were no objections; it was so ordered. Number 205 REP. HUDSON raised a concern brought to his attention regarding the deletion of the exception to limits on noneconomic caps for disfigured or severely impaired persons. Chairman Hudson explained that it was his understanding that what had been accomplished with the rewrite of the statute was that the committee had done no "damage" to the concept. Number 215 MR. FORD explained that under present law there is a cap for recovery of noneconomic damages, but there is an exception for disfigurement or severe physical impairment. The version of HB 292 before the committee now eliminates that exception. Number 225 CHAIRMAN HUDSON asked if this was the committee's intent. Number 254 REP. PORTER replied that it was the committee's intent to delete this exception. Rep. Porter suggested this exception has been used as a major loophole to bring large suits. Rep. Porter cited the example of a broken figure that heals crooked. Should a person be allowed to use the exception to the $500,000 cap to sue for more? REP. PORTER added that the terms in question are ambiguous. CHAIRMAN HUDSON asked if the courts had defined these terms. MR. FORD answered that he was sure the courts had dealt with this issue, but he was not aware of any definition. REP. SITTON stated that $500,000 would not be an appropriate cap for someone who was severely brain damaged, and we have to rely on the judgement of the jury in some cases. He suggested that the committee tighten up the definition of severe physical impairment. Number 340 REP. HUDSON stated he thought the issue was important to bring up, but if the exception were to be reinserted, the definitions would have to be really tight. Number 345 MR. FORD responded that the committee should remember that in order for the exception to come into play in a lawsuit, it would have to be a very serious injury. He doubted that a minor disfigurement or impairment would be at issue. Number 355 REP. MULDER surmised that a severely injured person would most likely be going after damages in the economic and punitive categories. Rep. Mulder supported the deletion of the exceptions to the noneconomic cap. Number 360 CHAIRMAN HUDSON added that one of the reasons he supported the deletion was because the interpretation of the terms used was unclear. Furthermore, the exception only applies in a relatively few cases on an annual basis. Number 400 REP. SITTON asked if doctors and hospitals were required to carry malpractice insurance in Alaska. Number 408 MR. FORD replied that there is no mandatory insurance law in Alaska. As a practical matter, a doctor who works for a hospital is required to have insurance. Number 428 REP. MULDER wanted to clarify the point regarding the relationship between a doctor on contract and the hospital he works out of. What kind of recourse would a patient have if something went wrong? Number 440 REP. PORTER replied that a major focus of this legislation is to make things fair and equitable for all. He stated that he did not think it fair that a hospital be held liable for the actions of a doctor on contract with them when they neither train or supervise them. This is in contrast to the doctors who are hired directly by the hospital; they are employees and the hospital should be held liable for there actions. Number 460 CHAIRMAN HUDSON clarified that doctors who are hired by the hospital are covered by the hospital, but doctors who are independent contractors are not required to have insurance and are not covered by the hospital. This is the intent of this legislation. Number 466 REP. WILLIAMS asked for further clarification on the liability of hospitals and doctors. Number 477 REP. PORTER reiterated his points on liability factors. Only the independent health care workers are not covered by the hospitals. Any employee of the hospital would be covered by the hospital's liability insurance. Number 491 REP. MACKIE hypothesized that a nurse employed by a hospital but under the direction of a doctor could conceivably be part of an operation gone awry. In this case, would the hospital be a named defendant since they employ the nurse? Number 536 REP. PORTER replied that it is the difference of between criminal law and criminal evidence; it could be a violation of the law, but whether you can prove it or not is the question. He added that if the nurse had some degree of responsibility and culpability, which is a matter of proof that the jury would decide, then the hospital could be named and held responsible. Number 550 REP. SITTON stated that in 1989, with 800 doctors in the state, there were only four or five malpractice suits. With this in mind, he did not feel insurance rates will come down since the insurance industry is fueled by competition and the premiums obviously do not rely on these few cases. REP. SITTON added that he has not heard from a single insurance company that this legislation will result in reduced rates. Number 570 REP. PORTER replied that Dave Walsh, Director of the Division of Insurance, and John George, lobbyist for the insurance industry, have both testified that insurance rates will come down if the legislation is passed and survives court challenges. TAPE 94-9, SIDE A Number 001 REP. WILLIAMS added his concern with whether or not the insurance rates will come down with passage of this legislation. Number 020 REP PORTER stated there is a provision in HB 292 that requires the medical community to come up with a set of standards of practice with the aim towards eliminating the need of defensive medicine. In addition, HB 292 asks the Division of Insurance to examine rates and report back to the legislature. Number 075 REP. SITTON stated that the testimony taken back in November was that it's not the large awards that run up insurance rates, but the host of small ones as stated by Mr. George. Rep. Sitton asked, if this is true, then why do we have the caps on the various damages? Number 100 REP. PORTER answered that it was his recollection that Mr. George testified that while the vast majority of claims are in the smaller range, it's the potential and periodic large claims that have the driving effect on rates. Number 120 REP. MULDER added that it's the potential exposure that drives the system. Number 185 REP. WILLIAMS asked the committee to revisit the issue of the deletion of the exceptions to the noneconomic caps. Rep. Williams expressed his particular concern about a person severely disfigured or impaired. Number 207 REP. PORTER outlined the various options available to an injured person, damages for economic loss, medical coverage, punitive and noneconomic loss. Number 245 CHAIRMAN HUDSON stated that deleting the exceptions is definitely a policy call on the part of the legislature and that the supporters of HB 292 believe its a significant one. Number 288 REP. WILLIAMS stated he feels uncomfortable with the deletion of the exceptions without more discussions. Number 308 REP. MACKIE stated he is against the cap of $500,000 for pain and suffering in severely impaired and disfigured cases. Number 350 REP. GREEN asked if Rep. Mackie thought there was an appropriate limit or cap, $2,000,000 or $3,000,000 or so, which the injured person should be satisfied with. REP. MACKIE responded that he has a very good friend who is in that very situation and maybe they should ask him. Rep. Mackie added that he meant no disrespect, but some sort of discussion should be attempted in order to tackle this issue. REP. MULDER stated that he was sensitive to this issue because no amount of money could make a person physically whole again, but the policy question is what level is fair. Number 424 REP. PORTER stated that disfigurement and severely disabled are two different terms. Rep. Porter contended that a bent finger is disfigurement and therein lies the large loophole that in reality negates the presence in present law of a cap on noneconomic damages. Number 430 REP. MACKIE agreed that losing a finger should not be regarded as a severe disfigurement or impairment; but someone who is confined to a wheelchair should not be covered with a cap. Number 454 CHAIRMAN HUDSON stated he did not want to sacrifice the bill over this issue. He asked Rep. Porter if he felt his staff or counsel could redefine the problem that has created the change to begin with. Maybe we could come up with a plug for the loophole and yet still accommodate the few cases a year that may fall into the disfigured or severely impaired situation, he said. Number 470 MR. FORD suggested that the committee look at qualifying disfigured, as impaired is qualified by "severely." Number 480 REP. PORTER stated that it only qualifies the terms in the eyes of the beholder. Number 524 CHAIRMAN HUDSON summarized that the will of the committee seems to be to address this issue, and since the bill goes to Judiciary next, maybe Rep. Porter could suggest a solution. Number 529 REP. MACKIE suggested that this issue would be a major one on the floor. Number 540 REP. PORTER told the committee he would be willing to work with staff and counsel to work up language that would define severe physical disability and impairment. CHAIRMAN HUDSON instructed staff to draft a letter of intent to the Judiciary Committee that the Labor and Commerce Committee wishes the Judiciary committee to address this issue. REP. WILLIAMS moved CSHB 292(L&C) with individual recommendations. No objections were heard; it was so ordered. CHAIRMAN HUDSON adjourned the meeting at 5:00 p.m.