CS FOR SPONSOR SUBSTITUTE FOR HOUSE BILL NO. 58(FIN) am "An Act relating to civil actions; relating to independent counsel provided under an insurance policy; relating to attorney fees; amending Rules 16.1, 41, 49, 58, 68, 72.1, 82, and 95, Alaska Rules of Civil Procedure; amending Rule 702, Alaska Rules of Evidence; and amending Rule 511, Alaska Rules of Appellate Procedure." CHRIS CHRISTENSEN, General Counsel, Judicial Branch, stated that their fiscal note was low considering the massive number of changes the bill proposes. He noted that most parts of tort reform didn't help the state save money, but did help litigants. The fiscal impact of most of the changes would be either neutral or impossible to predict. There would be a slight impact on the way cases were handled. For example, the defendant has the option of making periodic payments for amounts in excess of $100 thousand. Extra judicial time would be involved in that the judgement would have to set up the payment schedule and take testimony from witnesses, and resolve future disputes if payments were not being made. Section 15 relates to collateral benefits and requires the jury to consider them, rather than the judge under current law, which would add jury expenses. Section 23 modifies the rate at which prejudgment interest is accrued by changing it from a fixed rate to a floating rate. This would require a new rate to be set yearly, necessitating new computer software and additional clerical time. Continuing, MR. CHRISTENSEN testified that there would be an increase in the medical malpractice 3-person expert advisory panels because of the inclusion of malpractice claims against government attorneys, but the cost would be minimal, and was not included in the fiscal note. Some judicial costs would be saved regarding motion practices, but would be offset by longer trials and increased appeals. It has been estimated that the bill would result in increased litigation for five to seven years until all the issues were settled. In response to a question from SENATOR ADAMS, MR. CHRISTENSEN responded that the fiscal note he was referring to was dated 3-11-97 for $19.4 thousand. SENATOR ADAMS commented that one of the stated reasons for tort reform was because the court system was clogged, yet their fiscal note was low. Based on that, he doubted the truth of that reasoning and believed the bill should not be before the legislature. He questioned the number of tort cases. MR. CHRISTENSEN stated that torts were a very small percentage of total cases before the courts, excluding small claims. There were less than 1,500 tort cases last year, out of approximately 140 thousand total cases. SENATOR ADAMS questioned the argument that most civil lawsuits were frivolous. He referred to the court system's 1995 annual report indicating that most cases have merit. MR. CHRISTENSEN confirmed that the percentage of lawsuits which are dismissed or fined as frivolous was very tiny, but did not have exact figures. SENATOR ADAMS cited additional statistics regarding tort cases, making the argument that the bill was not needed. He reiterated that because of the small fiscal note the bill did not do anything. TERI CARNS, Senior Staff Associate to Judicial Council, testified via teleconference from Anchorage. She spoke about the Judicial Council fiscal note that covers two areas. One was an alternative dispute resolution program review at a cost of approximately $8,000 for a contractee to do that work. The other was a review of settlement data. It would provide an opportunity to have confidential data available for analysis to the Judicial Council, which would then be reported periodically to the legislature and the court at a cost of approximately $18 thousand. COCHAIR SHARP noted there were no additional questions. He stated the bill would be HELD for further consideration.