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 Heads To Senate

For Immediate Release: March 19, 1997 Contact: Rep. Brian Porter (907) 465-4930

JUNEAU - A comprehensive rewrite of civil litigation rules in Alaska passed the State House of Representatives Wednesday upon a re-consideration vote. House Bill 58, sponsored by House Majority Leader Brian Porter, calls for a graduating system for predictable punitive damages and limiting frivolous lawsuits.

"The incentives that created the most litigious society on earth are firmly in place. As a consequence, the cost of liability insurance has become unaffordable to many and unavailable to others. In some areas of this state, there are no domestic insurance companies which will write higher risk liability insurance policies for any price," said Porter.

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

"HB 58 will create a more equitable distribution of the cost and risk of injury in civil lawsuits. 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.

"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.

Porter said Alaska finds itself and its private sector competing with other nations for economic opportunity.

"If we want an environment that is conducive to rational economic development, the creation of jobs, and a higher standard of living for all Alaskans, enactment of meaningful tort reform is paramount," said Porter.

Tort reform is part of the Republican-led Majorities Commitment to Alaska.

Following are the most significant portions of the tort reform bill:

• Put a cap on punitive damages of the greater of $300,000 or three times compensatory damages. In extreme cases, the cap is the greater of $600,000 or four times compensatory damages.
• 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 $300,000, except that in aggravated cases the cap is $500,000 per claim.
• 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.
• Allow a jury to know before it enters a verdict whether an injured person has realized a recovery for the same injury in another lawsuit or from another source.
• 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 $10,000 for filing clearly frivolous lawsuits, or for falsifying material facts in a lawsuit.
• Overrule an Alaska Supreme court decision which struck down 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 future damages to be paid to injured persons in periodic payments in order to protect injured persons from becoming wards of the state. Statistics show that about 25% to 30% of accident victims completely dissipate their judgments or settlements within two months of recovery, and 90% of them spend it all within 5 years.
• 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.

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