Alliance Disappointed in Mo. Gov.’s Veto of Tort Reform Bill

July 11, 2003

Yesterday’s veto of a comprehensive civil justice reform bill will not only hurt insurers, but also consumers in the long run, according to the Alliance of American Insurers, an industry lobbying group.

The bill (SB 280), which was vetoed by Gov. Bob Holden (D), would have positively addressed such long-standing problems as venue reform, limits on appeal bonds, class actions and caps on non-economic damages in medical malpractice cases.

“Missouri has failed to take advantage of a chance for true tort reform that would have loosened the grip of litigation on the state’s whole economy, not just the insurance market, which is being strangled by out-of-control lawsuits,” said Joe Woods, assistant vice president of the Alliance’s Southwest Region. “Changes such as those in SB 280 would have gone a long way toward improving the state’s business climate, translating into greater job opportunities and more predictable pricing on a wide variety of consumer goods and services.”

SB 280 contained a number of civil justice reform measures including the following:
—Provides that state agencies that use a lawyer or law firm must obtain such services through open and competitive bids;
—Provides that prejudgment and post-judgment interest rates shall be tied to the auction price for 52-week Treasury bills;
—Venue reform;
—Provides for interlocutory appeal of orders granting or denying class certification;
—Places a $50 million limit on appeal bonds;
—Provides for joint and several liability for compensatory and non-economic damages if a defendant is found to bear 10 percent or more of the fault; however, liability for punitive damages is several only and not joint;
—Requires mediation for all tort actions unless the court finds that mediation has no chance of success;
—Caps non-economic damages in medical malpractice cases at $350,000 and provides for periodic inflationary increases of that dollar amount beginning on August 28, 2003; also removes the words “per occurrence” with respect to the cap on non-economic damages;
—Requires a court to dismiss any medical malpractice claims for which the plaintiff fails to file an affidavit of merit;
—Prohibits certain quality assessment records from being subject to release by subpoena or admissible in certain civil, criminal and administrative proceedings.

“All of these changes are in accordance with the Alliance’s overall goal of civil justice reform that retains individuals’ rights, but discourages jackpot justice,” said Joyce Kraeger, an Alliance lawyer. “There really is no logical defense for opposing these sensible, fair changes.”

According to Kraeger, several states have enacted substantial tort reform this year similar to SB 280. They include Arkansas, Colorado, Idaho and West Virginia.

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