Legislature(1995 - 1996)
04/28/1996 02:05 PM Senate RLS
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
CHAIRMAN MILLER brought CSHB 158(FIN) am (CIVIL LIABILITY) before
the committee as the final order of business. He directed
attention to a proposed Rules SCS and outlined the following
differences between it and the Senate Finance SCS:
1) Additional court rules changes, which are considered technical
amendments, have been added to the title.
2) Section 2 is a new section relating to responsibilities of
operators of commercial recreational activities.
3) In Section 3, the statute of repose has been changed from eight
years to 10 years.
4) In Section 4, page 5, line 27, the words "from the accrual of
the action" have been added at the request of the Administration.
5) In Section 6, the noneconomic damages section the amounts have
been changed to $500,000 and $750,000, and the escalator clause for
inflation has been eliminated.
6) In Section 8, the punitive damages section, it changes the
amount of the award for punitive damages going to the state of
Alaska from 90 percent to 75 percent.
7) Sections 11 & 12 add back in the "empty chair amendment" which
was in the Senate Judiciary SCS, but was eliminated in the Senate
Finance SCS.
8) Section 13 is a new section which is a technical fix to a gap
that was in a law created with the tort initiative of 1987.
9) In Section 16, a subsection (b) has been added, which was a
request of the Administration.
10) Section 18 is a substantial rewrite of the mandatory
arbitration, which was drafted with the help of the court system.
11) Section 19 tightens up civil liability for hospitals.
12) Section 20 is a new section which relates to civil liability
for false claim and improper actions.
13) In Section 21 the wording "and the person has been convicted
of a felony including convictions based on the quality of a plea or
a plea of nolo contendere" has been deleted.
14) Sections 24, 25 & 26 are court rule changes that have been
added.
15) Section 30 is new section which is a retroactivity clause on
the punitive damages awards only.
Number 200
Concluding his review, CHAIRMAN MILLER then invited comments on the
proposed Rules SCS.
JEFF BUSH , representing the Administration, noted he had sent a
letter to the Chairman outlining their concerns with the
legislation, and that many of those concerns have been dealt with
in the draft Rules SCS, but that many more of them have not been
dealt with.
Mr. Bush outlined the Administration's concerns with the following
sections of SCS CSHB 158(RLS):
Section 2. The Administration has a problem with a new section
being added in the final committee of referral. They believe there
has been insufficient process in terms of opportunity for a hearing
on this section, and the Department of Law believes that there may
be some legal problems and several ambiguities raised by this
section.
Section 3. As does any statute of repose, Section 3 raises
constitutional questions, and the Governor doesn't want a bill on
his desk that adds to constitutional issues or constitutional legal
concerns. The Supreme Court has indicated that there is an issue
with a statute of repose with any legislation that cuts off a
person's right to recover for an accident before the accident
actually occurs.
Section 6. There is concern that whenever there is a system that
has caps, it is making a policy judgment that those who have minor
injuries can be fully compensated, but those who have major
injuries may not be fully compensated for their injuries.
Section 12. Allocation of fault between parties, which is known as
the "empty chair provision" raises the issue of fairness. Any time
a system is set up where someone who is responsible for an injury
cannot be brought to the table, then there is going to be some
unfairness in the system.
Section 14. By allowing offers of judgements between individual
parties rather than as a group, and penalize the plaintiff or the
plaintiff's attorney for failing to guess on whether or not the
amounts being offered is going to be responsible or is going to be
what a jury is going to award is very difficult. A fair way to
look at this may be to adopt the Senate Judiciary version which
simply requires that all the parties on one side of the litigation
make their offers jointly before the penalty provisions kick in.
Although many of the Administration's concerns with the expert
testimony provision have been addressed, it still has some
technical changes that need to be made. There is concern that the
way the arbitration provision is written there is no opportunity to
file a motion to dismiss the case before the arbitration kicks in.
Section 19. There is concern that the requirement of $500,000 in
liability insurance may be too low.
Section 20. The Administration believes that Section 22, which
allows increased penalties against lawyers who file pleadings
improperly under Civil Rule 11, covers what the committee is trying
to accomplish in Section 20 so there is no longer a need for the
section. The Department of Law is convinced that there will be
lots of frivolous cases filed under Section 20 if it is left in.
Number 340
RICK VOLLERTSEN , an Anchorage attorney speaking on behalf of the
Alaska Action Trust, stated he believes the bill is a poorly
drafted and a profoundly ill-conceived piece of legislation for
plaintiffs, for defendants and for businesses, and, if passed, it
will be a travesty for those who are seeking legal redress in this
jurisdiction. To pass the bill is to jeopardize fundamental
constitutional rights of Alaskan citizens, including the right to
a jury trial and the right to counsel. He pointed out there have
been no hearings on the new provisions contained in the Rules SCS,
no study of costs, no statement of the statistics which support it.
He also stated the bill will increase litigation time and
litigation costs, and he cautioned that plaintiffs or defendants
will not be able to find lawyers to represent them if Section 20,
the civil liability provision, is kept in the bill.
Number 424
MICHAEL LESSMEIER , speaking on behalf of State Farm Insurance
Company, stated the Rules SCS is a product of significant
compromise that has been going on for more than 10 years with many
people working together with different interests trying to make the
system better. State Farm believes the Rules SCS does that, and
that the changes that have been made are significant. He said the
role of the Legislature is to balance fairness, and each provision
in the bill is a balancing process. He said Section 20 is an
attempt to impose a level of responsibility that does not currently
exist in our system, as well as an attempt also to place a penalty
in our system for someone that comes to court and doesn't tell the
truth. He believes these provisions will lead to less litigation,
not more, because they will force people to take responsibility for
their actions, including lawyers. In conclusion, he urged the
committee's support for the Rules SCS.
There being no further testimony on SCS CSHB 158(RLS) CHAIRMAN
MILLER asked for the pleasure of the committee on SCS CSHB
158(RLS).
SENATOR PEARCE moved SCS CSHB 158(RLS) be adopted. Hearing no
objection, the motion carried.
SENATOR PEARCE moved that SCS CSHB 158(RLS) be approved for
calendaring. SENATOR DUNCAN objected. The roll was taken with the
following result: Senators Sharp, Pearce and Miller voted "Yea"
and Senators Salo and Duncan voted "Nay." The Chairman stated the
motion carried on a 3-2 vote.
There being no further business to come before the committee, the
meeting was adjourned at 2:43 p.m.
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