HOUSE BILL NO. 292 "An Act relating to civil actions; amending Alaska Rules of Civil Procedure 49 and 68; and providing for an effective date." Co-Chair Larson announced that, following public testimony, HB CSHB 292 (JUD) would be placed in a subcommittee consisting of Representative Parnell as Chair and Representatives Hanley, MacLean, Navarre and Grussendorf. REPRESENTATIVE BRIAN PORTER testified in support of CSHB 292 (JUD). He asserted that CSHB 292 (JUD) should result in a reduction of insurance liability rates and a expansion of medical services across the state. He noted that there are opposing legal opinions regarding the constitutionality of statute of repose provisions in CSHB 292 (JUD). He observed that CSHB 292 (JUD) contains many components. He asserted that only adoption of the entire package contained in CSHB 292 (JUD) will result in the desired reductions. BOB COWAN, ATTORNEY, EXXON PLAINTIFFS testified via the teleconference network from Anchorage, in opposition to CSHB 292 (JUD). He pointed out that the limit on punitive damages would be advantageous to large corporations and disadvantageous to fishing groups. He asserted that the legislation is designed to help outside and foreign corporations. TOM BELTZ, WASILLA testified via the teleconference network in opposition to CSHB 292 (JUD). He recounted his personal experience with Workers' Compensation. He maintained that the legislation will hurt the worker. 2 ROGER HOLMES, ATTORNEY, BLISS AND HOLMES testified via the teleconference network from Anchorage. He referred to the proposed change in rule 82. He noted that rule 82 is being restructured. He felt that the rule is being strengthened and will discourage frivolous lawsuits and force individuals to accept a reasonable offer. Mr. Holmes addressed the provision to require periodic payments in judgement of $100.0 thousand dollars. He noted that there are concerns that additional litigation would result from disputes regarding the provision for periodic payments. He felt that the courts would set standards which would prevent additional suits. In response to a question by Representative Martin, Mr. Holmes discussed the awarding of attorney fees. KEITH WASSERMAN, DELTA JUNCTION testified via the teleconference network in opposition to CSHB 292 (JUD). He questioned if a cap would be placed on judgements. Mr. Porter noted that an individual can receive economic, punitive, or non-economic recovery. He observed that under economic recovery all past and future lost wages without a cap can be awarded. Under economic recovery all medical expensives, past and future, can be awarded with no cap. There is a $500.0 thousand dollars cap on non-economic damages, such as pain and suffering. The cap for serious physical impairment has been expanded to $750.0 thousand dollars. Punitive damages could be awarded with a cap of $200.0 thousand dollars or three times the amount of non economic and economic damages whichever is greater. BRENT LAFAVE, MATSU testified via the teleconference network in opposition to HB CSHB 292 (JUD). He detailed his personal injuries and experience with Workers' Compensation. He emphasized that the individual worker is not able to afford lawyers and doctors to testify on their behalf during insurance disputes. PATTI RIZER, ANCHORAGE testified via the teleconference network opposition to CSHB 292 (JUD). She maintained that the legislation favors big business and makes victims responsible. She referred to litigation involving her son's death at a ski resort. HARLAN KNUDSON, PRESIDENT HOSPITAL ASSOCIATION testified in support of tort reform. He maintained that individuals are being denied the best quality medical care due to the costs of health insurance. He asserted that inaction will result in a hole in the cost of health care. KRISTI WASSERMAN testified via the teleconference network. In response to a question by Ms. Wasserman, Representative 3 Porter noted that California has initiated similar tort reform. He noted that in the fifteen years since California tort reform laws were adopted, medical malpractice insurance has risen by 85 percent in the state of California. The rest of the nation experienced a 400 percent increase in medical malpractice insurance. RICHARD CATTANACH, UNITED CONSTRUCTION COMPANY, ANCHORAGE testified via the teleconference network in support of CSHB 292 (JUD). He noted that there is no statute of repose in Alaska. He explained that a contractor retains, indefinitely, responsibility for any building they construct. He asserted that only .50 cents on a dollar spent in tort reform goes to the claimant. He maintained that the legislation will get more money to the claimant while lowering insurance costs. LES GARA, ATTORNEY, ANCHORAGE testified via the teleconference network in opposition to CSHB 292 (JUD). He referred to the six year statute of repose. He noted that there is a two year statute of repose provision for doctors. He explained that the statute of repose provisions would prevent litigation if the individual does not find out about the injury until 6 or 2 year after the action takes place. He gave examples of cases of injury that would not be compensated under the statute of repose. He noted that it is possible for contamination from faulty storage of hazardous waste to take place years after the tanks are stored. (Tape Change, HFC 94-103, Side 1) SHELDON WINTERS, ATTORNEY, STATE FARM INSURANCE COMPANY testified in support of CSHB 292 (JUD). He discussed provisions dealing with prejudgment interest. He noted that the legislation ties prejudgment interest to the federal district reserve rate. There would be no prejudgment interest on future damages. Any damage for future wage loss would be reduced by the amount that would have been taken out for federal or state income taxes. Representative Porter explained that the intent is that the individual receive what their net income would have been. No income tax will be paid on the award. HOUSE BILL NO. CSHB 292 (JUD) "An Act relating to civil actions; amending Alaska Rules of Civil Procedure 49 and 68; and providing for an effective date." BRUCE RIZER, ANCHORAGE testified via the teleconference network in opposition to CSHB 292 (JUD). He maintained that the function of tort law is to hold persons responsible for their actions. He recounted his experience with litigation resulting from the tragic death of his son. He asserted that insurance companies use every maneuver to stymie investigation and drive the cost of litigation up, while denying any responsibility PAUL FUHS, ACTING COMMISSIONER, DEPARTMENT OF COMMERCE AND ECONOMIC DEVELOPMENT noted that the lack of a statute of repose is effecting the state's ability to promote value added manufacturing in Alaska. HOUSE BILL NO. CSHB 292 (JUD) "An Act relating to civil actions; amending Alaska Rules of Civil Procedure 49 and 68; and providing for an effective date." JEFF FELDMAN, ATTORNEY, ANCHORAGE testified via the teleconference network in opposition to CSHB 292 (JUD). He asserted that CSHB 292 (JUD) is a "fundamental attack on the system of justice in Alaska." He maintained that CSHB 292 (JUD) is special interest legislation that affects and benefits wrongdoers, whose conduct injures or kills Alaskans. He observed that insurers and outside corporations will benefit from the legislation. He alleged that the "court house doors will be locked before Alaskans have reason to know they have been victimized." He gave examples of how the six year statute of limitation could affect victims. Mr. Feldman referred to a letter by the Department of Law, 6 March 8, 1994 (copy on file). He asserted that if victims are not able to obtain compensation from wrongdoers, the state will have the obligation through medicare and medicaid requirements to financially supporting those Alaskans who cannot obtain compensation. HOUSE BILL NO. CSHB 292 (JUD) "An Act relating to civil actions; amending Alaska Rules of Civil Procedure 49 and 68; and providing for an effective date." KEVIN MORFORD, CO-CHAIR, GREEN PARTY testified via the teleconference network in opposition to CSHB 292 (JUD). He noted that the Green Party unanimously passed a resolution opposing CSHB 292 (JUD). He maintained that the right to a trial by jury is a constitutional right of great importance. He observed that a civil jury trial is the only legal remedy available as a manner of right to persons who have been injured by the negligence of others. He asserted that the legislation is the result of a lobbing effort on the part of insurance companies and other special interest groups which wish to reduce their potential liability to the victims of negligence. Mr. Morford suggested that the best way to lower the cost of civil litigation is to fund consumer protection and enact regulations to ensure that injuries do not happen. HOUSE BILL NO. CSHB 292 (JUD) "An Act relating to civil actions; amending Alaska Rules of Civil Procedure 49 and 68; and providing for an effective date." MIKE SCHEINDER, ANCHORAGE testified via the teleconference network in opposition to CSHB 292 (JUD). He referred to Kaiser versus Brian Electric 695 federal section 207. He noted that faulty wiring caused the death of 160 people in a restaurant. Under CSHB 292 (JUD) litigation resulting from the deaths resulting from the faulty wiring would not have been allowed due to the statute of repose. He observed that there is no provision to assist consumers in any aspects of their endeavors or makes access to justice easier. He discussed the Canadian system. HOUSE BILL NO. CSHB 292 (JUD) "An Act relating to civil actions; amending Alaska Rules of Civil Procedure 49 and 68; and providing for an effective date." DARREL NELSON, ANCHORAGE testified via the teleconference network in opposition to HB CSHB 292 (JUD). He stressed that a child will not know what happened to them by age eight. He stressed that a child of eight is not able to handle the litigation process. He noted that parents may not know the law well enough to instigate proceedings on behalf of their children. BONNIE NELSON, AKPIRG, ANCHORAGE testified via the teleconference network in opposition to CSHB 292 (JUD). She maintained that there are not a lot of frivolous law suits. She suggested that a neutral body be commissioned to look into the impacts of the legislation.