HB 10 - MANDATORY MEDIATION/DESIGN PROF LAWSUITS Number 1990 JEFF LOGAN, Legislative Assistant to Representative Green, came forward to present testimony on HB 10, "An Act requiring mediation in a civil action against an architect, engineer, or land surveyor; amending Rule 100, Alaska Rules of Civil Procedure; and providing for an effective date." This legislation is an effort to keep people out of court, not by restricting their rights to file an action, but by providing an alternative venue and method to address their complaint. The goal is to facilitate a mutually agreeable pre-trial settlement. MR. LOGAN continued that if a plaintiff is seeking damages from a design professional the case must go to meditation with a few limited exceptions. These are firstly, if all parties to the suit desire to by-pass mediation they go straight to trial. Secondly, if in those cases where the judge determines that the plaintiff is indigent the judge can require the defendant to pay all the costs of mediation. In those cases the defendant can refuse this option, by-pass mediation, and go to trial. Number 2078 MR. LOGAN walked the committee through the steps allowed for in this legislation. The process begins by someone filing out a motion. The case is assigned to a judge. On a form the judge will indicate when a case should go through mandatory mediation. After the defendant is notified there is communication between the judge and the parties. The court system keeps a list of mediators on file. If the parties agree on the mediator the judge appoints this choice. If the parties don't agree there is a process already incorporated in the court rules for the judge to select three names. The parties each get an opportunity to challenge and from this list the judge selects the mediator. MR. LOGAN stated that the plaintiff and defendant meet with the mediator in formal conference. Before they meet, the parties can provide the mediator with a brief of not more than five pages explaining the situation as they see it. The mediator can meet individually with each party after an initial meeting with everyone present. The meetings are private, the discussions are confidential and the mediator cannot be called upon in court to discuss what happened during these meetings. After these meetings, the information is reviewed and each party's position is assessed. If someone wants out and they don't believe they can get what they want from this process the mediation is terminated. If the parties do want to continue they do so with help from the mediator and when or if they reach settlement, the plaintiff files for a motion for dismissal. The defendant writes the check and that's the end of it. Number 2165 MR. LOGAN noted a letter of support from the Alaska Design Professionals in the packet and this 5,000 member organization, through their Legislative Action Committee, have asked for this legislation. He added that after a review of the files related to this legislation, before HB 414 was proposed last session (a bill that addressed this issue), he found a letter from a constituent on December 10, 1994 asking for some type of a pre-trial process to avoid these types of cases. He gave an historical overview of this legislation's progress and all the work that has gone into this effort. Number 2330 REPRESENTATIVE HUDSON referred to the Rules of Court and asked if these were the original province of the legislature or the courts. MR. LOGAN stated that he had no idea. Number 2355 DOUG WOOLIVER, Administrative Attorney, Alaska Court System, came forward to provide information on HB 10. He stated that the court has the primary responsibility for writing court rules, but under the Alaska constitution the legislature can amend these rules by a two-thirds majority vote out of both houses. The court originally writes them, the legislature can amend them. CHAIRMAN ROKEBERG asked what would happen to the rest of a piece of legislation with an incorporated court rule if a two-thirds vote was not obtained. MR. WOOLIVER responded that the rest of the bill would stay as is, just like an effective date. This happened with tort reform last year. All the court rules didn't pass so they all got dropped and the rest of the bill stood. Number 2411 REPRESENTATIVE RYAN noted that Alaska has an excellent set of statutes related to arbitration and asked if anyone had considered putting this as a first step, arbitration as the second and finally a courtroom hearing for the third option to help relieve the court load. MR. LOGAN responded that this was considered. The agreement that the trial attorneys and the design professionals came to was that they wanted something to bind the parties to mediation. Under Court Rule 100 as it is now, there is an option for mediation, but both sides wanted a motivator to compel people to go through this process. This is why they seek these changes. MR. LOGAN added that this process began with a Certificate of Merit which means a tribunal of an attorney, an engineer and some other public member would review these cases as they came in to determine the merits of each. This original option didn't get the support they needed. This present legislation did. TAPE 97-20, SIDE B Number 005 REPRESENTATIVE HUDSON asked what the response has been from the trial bar. Number 020 MR. LOGAN stated that he did not know why they weren't present at this meeting. No written testimony has been received. They did testify in the past. A Mr. Russ Winter testified throughout the process last year. On April 17, of last year, in the House Judiciary Committee hearing he said, "This may be one of the first instances when the trial lawyers and possible defendants have reached agreement on change in the court system which is actually quite a nice thing to be able to say." Mr. Winter did make some points he was still concerned about, one of which was why the scope of the bill was limited only to design professionals. Mr. Logan noted the simple reason for this was that no one has asked to be included in this during the entire time they've been working on this piece of legislation. Number 079 MR. WOOLIVER noted that the only thing the court asks is that the effective date be dropped, in large part, because this legislation does include court rule changes. Even if this legislation makes it through both the House and Senate, it might not be transmitted to the governor or signed immediately. Last year there were several bills signed at the end of June with a July 1 effective date, this makes it extremely difficult to get all the court rules written in a timely manner. They also ask that it become effective 90 days after the governor's signature. Number 120 REPRESENTATIVE HUDSON made a motion to amend HB 10 by technically removing the section 4, line 18, page 2, the effective date by deleting this entire section. Hearing no objection it was so moved. Amendment number one was conceptually adopted. Number 142 REPRESENTATIVE RYAN moved and asked unanimous consent to move HB 10 out of committee with individual recommendations and accompanying fiscal note as amended. Hearing no objection CSHB 10(L&C) was moved out of the House Labor and Commerce Committee.