Alaska State Legislature

News From The House Majority

Ken Freeman, Press Secretary
State Capitol
Juneau, AK 99801
phone: (907) 465-3804
web site: http://www.akrepublicans.org
Actuality line: 1-800-478-6540

Tort Reform Passes!

For Immediate Release: April 18, 1997 Contact: Rep. Brian Porter (907) 465-4930

JUNEAU - Legislation calling for a comprehensive rewrite of civil litigation rules in Alaska passed the Alaska State Senate Friday. House Bill 58, sponsored by House Majority Leader Brian Porter, calls for a graduating system for predictable punitive damages and limiting frivolous lawsuits. The bill will go to the House on Monday for a concurrence vote to changes agreed upon by the sponsor, the Senate and the Governor.

"Enactment of meaningful tort reform will mean a business environment that is conducive to rational economic development, the creation of jobs, and more opportunity for all Alaskans," said Porter.

"This act seeks to reduce costs associated with the current civil legal system, while ensuring that adequate and appropriate compensation for persons injured through the fault of others is available," said Porter. "HB 58 will create a more equitable distribution of the cost and risk of injury in civil lawsuits."

House Speaker Gail Phillips noted her enthusiasm for the passage of tort reform.

"This measure is part of our Commitment to Alaska to create jobs for Alaskans. We will be providing a better climate for companies to do business in Alaska while bringing additional predictability to our civil legal system," said Phillips.

"The bill we have before us today represents an updated and polished product. I don't anticipate any problems with the House concurring with the agreement reached today," said Phillips.

Porter said many large and small businesses and individual professionals are discouraged from doing business in Alaska because of problems with liability insurance.

"The graduating system of punitive damages, other limitations, and disincentives placed on frivolous lawsuits which are called for under HB 58, are the kinds of things necessary to bring the cost of litigation and insurance down, and provide better opportunities for business and customers," said Rep. Porter.

Following are the most significant portions of the tort reform bill: (UPDATED 4/18/97)

• Put a cap on punitive damages of the greater of $500,000 or three times compensatory damages. In extreme cases, the cap is the greater of $7 million, or four times compensatory damages, or four times the amount of financial gain that the defendant received as a result of the defendant's misconduct.
  
• Pay one half of punitive damage recoveries to the State of Alaska.
  
• Put a cap on damages for non economic damages (pain, suffering, loss of enjoyment of life, disfigurement and physical impairment) of the greater of $400,000 or $8,000 per year of the injured person's life expectancy. In aggravated cases the cap is the greater of $1 million or $25,000 per year of the injured persons life expectancy.
  
• Require that "expert witnesses" in professional malpractice cases be licensed in the same profession anywhere in the world, in order to prevent egregiously slanted testimony from "hired gun" type of expert witness.
  
• Prevent lawyers from running up exorbitant fees ($800,000 to more than $1,000,000) as "independent counsel" for insured persons with respect to claims made which are unquestionably not covered by that person's insurance policy.
  
• Punish lawyers with fines of up to $50,000 for filing clearly frivolous lawsuits, or for falsifying material facts in a lawsuit.
  
• Overrule an Alaska Supreme court decision which limited the voter's initiative which directed that a person should only be held liable for damages in direct proportion to that person's degree of fault.
  
• Establish a bar from filing lawsuits by persons who are injured while committing a felonious crime, or while operating a motor vehicle, aircraft or boat while under the influence of alcohol or illegal drugs .
  
• Overrule another Alaska Supreme Court decision by granting immunity to hospitals from liability for negligence of independent contractor emergency room physicians, provided the physicians carry at least $500,000 of liability insurance.
  
• Reduce several statutes of limitations and the statute of repose to a reasonable length in order to prevent the assertion of stale or fraudulent claims which would be impossible to defend because 10 or 20 years have passed since the alleged negligent act.
  
• Allow offers of judgment to be made by either party in order to encourage early settlement of litigation, by requiring the payment of actual attorney fees to the party making the offer to settle by those who fail to accept the offer of judgment when that offer is later proven at trial to have been virtually the same as the trial judgment.
  
• Require collection of settlement information and insurance data in order to establish a data base from which to judge the effectiveness of tort reform.
  
• Require a study and recommendations 10 months from now as to an alternative dispute resolution system, such as, for example, the mediation system that enjoys an 80% success rate in Seattle area federal courts. Such a system could be in place by July 1, 1998.

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