Lawsuit Reform Passes House
ByHistoric Lawsuit Reform Overwhelmingly Passes House
OKLAHOMA CITY (May 14, 2009) – Following years of dedicated effort, House members today overwhelmingly passed historic comprehensive lawsuit reform legislation that represents an agreement with lawmakers, business advocates, doctors, mineral owners and trial lawyers.
The deal will reduce the number of frivolous lawsuits in Oklahoma, which will help lower health care costs for all Oklahomans, recruit and retain Oklahoma doctors and bring more cost certainty to businesses in our state, especially small companies.
“The collaboration that occurred between all interested parties to reach this landmark agreement is exactly the type of work the people of Oklahoma expect from their leaders,” said House Speaker Chris Benge, R-Tulsa. “This deal is a compromise, which means everyone didn’t get everything they wanted, but it represents true reform for our state.”
Under the compromise, House Bill 1603 will contain the following major provisions.
Vague noneconomic damages (so-called “pain and suffering” awards) would be capped at $400,000 outside of exceptional circumstances. In rare cases where the cap is lifted, any amount greater than $400,000 could be paid with a reinsurance policy the state would purchase. The bill creates a task force that will study the details of the policy and payment options prior to implementation.
The reinsurance policy would pay up to $20 million a year to injured Oklahomans in exceptional circumstances of gross negligence or severe disfigurement. It is estimated such a policy would cost less than $1 million annually for the additional protection.
In order to have access to the reinsurance policy, doctors are required by the legislation to carry at least $1 million in medical liability insurance, which covers the majority malpractice cases. There is currently no state minimum requirement for insurance coverage.
“This change places the burden on doctors to carry higher levels of insurance to further protect injured Oklahomans, but also adds some certainty to the system in rare catastrophic cases,” said Rep. Dan Sullivan, House author of HB 1603 and the bill’s chief negotiator from the House.
The policy is a unique agreement that gives physicians a hard cap for medical liability insurance purposes but allows Oklahomans who have extenuating circumstances to receive awards above the cap.
As a result of that compromise, insurers will be able to sell medical liability insurance to doctors at lower rates because they won’t have to build up enormous reserves to cover the rare “jackpot” award that would otherwise bankrupt the company.
One of the main reasons doctor’s insurance currently costs so much is the impact of frivolous lawsuits – even though 70 percent of medical liability claims were dismissed between 2004 and 2007, Oklahoma’s major doctor’s insurance company spent $50 million defending those cases.
That cost should be significantly reduced following passage of House Bill 1603, allowing for cheaper insurance policies to be sold to doctors.
In turn, those lower insurance rates will make it easier to attract doctors to currently underserved areas of Oklahoma, particularly rural communities. Today, women all across Oklahoma often have to drive to Oklahoma City or Tulsa to deliver a baby because few local doctors will perform that service due to litigation threat and high insurance rates.
“Doctor and nurse shortages are a serious problem in Oklahoma. We have some of the best physician training in the country, but other states are stealing our doctors away,” said Rep. Doug Cox, an emergency room doctor in Grove. “We are training-often with taxpayer dollars-doctors who are being recruited to lawsuit reform-friendly states, it is a fact. This bill will give those physicians a chance to practice in this state.”
House Bill 1603 also contains other reforms. In the area of class-action lawsuits, court shopping for class-action suits would be restricted, and attorney fees could be reviewed.
The bill also requires an expert to certify that a professional negligence case has merit before it can proceed. That requirement would be waived for plaintiffs who cannot afford the costs associated with finding an expert.
“Unfortunately, we should have had these reforms years ago. But thankfully all of the parties involved agreed that the status quo could no longer continue,” said Sullivan, R-Tulsa. “This bill will ensure all Oklahomans with legitimate claims have a level playing field when they walk into a courtroom. This is real reform that will have real results.”
Legislative leaders and their representatives negotiated with interested parties all session, including the Oklahoma State Chamber, the Oklahoma State Medical Association, the Physicians Alliance for Tort Reform, Oklahomans for Lawsuit Reform and the various other organizations.
After the deal was announced earlier this week, Gov. Brad Henry called it “a strong piece of reform legislation” and “perhaps the most comprehensive tort bill in state history.”
“We worked hard to make this a true piece of compromise legislation, and I hope Gov. Henry, who has said he supports reasonable lawsuit reform, will sign it into law as soon as it reaches his desk,” said Benge.
The legislation passed the House with a bipartisan vote of 86-13 and now returns to the Senate for final consideration.
2009 Oklahoma Lawsuit Reform Agreement
The major reforms agreed upon include the following:
Class action reforms as set out below:
• Adoption of an expanded federal rule (#2023) as a foundation for class actions in
Oklahoma;
• Specific procedures and guidelines set out the court must follow in appointing an
attorney to represent the class;
• Specific findings that must be included in an order certifying a class;
• More specific information that must be included in the notice provided to
potential class members if a class is certified;
• More specific court oversight of the case, particularly regarding dismissals and
settlements;
• Limiting non-resident membership in state class actions;
• Allowing the court to stay, transfer or dismiss a case if it should be heard in
another court;
• Requiring the appellate court to immediately review certification orders using the
de novo standard;
• Allowing the appellate court to also review orders determining whether the class
has exhausted administrative procedures;
• Requiring the case to be stayed while an appeal of the certification order is
pending;
• Providing that settlements in which coupons are awarded, the attorney shall also
receive his fee in coupons; and,
• Providing specific guidelines the court must follow in awarding attorney fees to
the attorney representing the class, which includes allowing the court to appoint
an independent attorney to represent the class during the fee hearing.
Appeal Bond Cap – $25 million & no appeal bond required on punitive damage
Appeals
Mandatory Dismissal for Late Service (180 days)
Summary Judgment – Adopted Federal Rules
Prejudgment Interest Reforms (Shall not begin to accrue until 24 months after
commencement of suit) and a reduction in the rate calculation
Joint & Several Liability
• Limits liability to instances where a tortfeasor is more than 50% at fault..
Asbestos/Silicosis Reforms
Cap on Non-Economic Damages
• In any action arising from a claimed bodily injury, the amount of compensation which a trier of fact may award a plaintiff for noneconomic loss shall not exceed $400,000.00.
• In any civil action arising from a claimed bodily injury, the amount of compensation which the trier of fact may award a plaintiff for economic loss shall not be subject to any limitation.
Properly pleading jurisdiction levels (More closely tied to Federal level)
Peer Review Confidentiality
Certificate of Merit for Professional Negligence
Other significant reforms include:
Forum non conveniens
Redefining of “Frivolous” Lawsuits
Junk Science & Expert Witness Reforms
Initial Disclosure of Witness Exhibits
Gun Manufacturers Liability Protection
• Exempts gun manufacturers, distributors and sellers who “lawfully” manufacture, distribute or sell firearms from liability for “any injury suffered.” Does not exempt such firearms from product liability if appropriate.
Common Sense Consumption Act
• Known as the “Cheeseburger Act,” this protects against obesity lawsuits against restaurants and food manufacturers.
Volunteer Liability
Emergency Volunteer Immunity
School Protection Act
Admissibility of non-wearing of Seat Belts (exempts children under 16)
Agri-Tourism Liability Reform
