20 States Have Enacted Tort Reforms This Year

July 15, 2003

This year has been the busiest for enactment of state civil justice reform legislation since 1995, according to the American Tort Reform Association (ATRA). At mid-year, 20 states already have enacted laws; 19 laws were enacted by the conclusion of 1995. The report comes as ATRA completed its semiannual Tort Reform Record.

The 20 states that have enacted civil justice reforms include: Arizona, Arkansas, Colorado, Florida, Georgia, Idaho, Kansas, Louisiana, Minnesota, Mississippi, Montana, North Carolina, Oklahoma, Pennsylvania, Tennessee, Texas, Utah, Virginia, West Virginia and Wyoming. Some states have not concluded legislative sessions and others have called special sessions in order to advance reforms.

ATRA’s Record lists state-by-state civil justice reforms passed since 1986, the year ATRA was founded. Some states have passed sweeping, comprehensive reforms. Texas led the way by enacting a comprehensive law that includes joint and several liability reform, limits on noneconomic damages, medical liability reform and punitive damages reform.

The Texas legislature is currently in special session to tackle asbestos litigation reform. Other states that have passed comprehensive reforms include Arkansas, Idaho and West Virginia.
Colorado became the fifth state to enact attorney retention “sunshine” legislation, which eliminates the “backroom” negotiations of contingency fee contracts between personal injury lawyers and government officials. The new law requires that government officials, who sign contracts with personal injury lawyers on a contingency fee basis, competitively bid those contracts and obtain legislative review of the terms of the contracts.

Last week, two governors vetoed civil justice reform bills. Missouri Gov. Bob Holden vetoed a comprehensive bill that would have helped put Missouri law in line with nearby states that have all enacted strong reforms. In addition, the Iowa legislature announced it has hired a law firm to challenge Gov. Vilsack’s line-item veto of several civil justice reform provisions in an omnibus regulatory reform package. The Iowa legislature alleges that Vilsack improperly used the item veto, as it is only to be used to strike language from appropriations bills.

This year’s legislative activity was driven, in part, by a sharp escalation in tort costs in the United States, which increased 14.3 percent from 2000 to 2001, the largest single-year increase since 1986, according to a study released by Tillinghast-Towers Perrin in February. The study indicates total costs for 2001 at $205 billion or $721 per U.S. citizen compared to $179 billion or $636 per U.S. citizen in 2000.

This year, eight states have enacted medical liability reforms and another 17 have considered or are still considering legislation. States that have enacted medical liability reforms include Arkansas, Georgia, Ohio, Oklahoma, Texas, Utah, Virginia and West Virginia. Florida is currently in special session to address its medical liability crisis.

At the federal level, the United States Senate failed to overcome a Democratic-led filibuster of the medical malpractice reform bill, S. 11. Senate Majority Leader Bill Frist indicated that he will bring the bill back in the fall. Major provisions of S. 11 included: a cap on noneconomic damages of $250,000; a sliding scale on attorney fees; periodic payments of judgments that equal or exceed $50,000; a “fair share rule” so that damages are allocated in proportion to a party’s degree of fault (joint and several liability reform); and a provision to allow collateral source benefits to be introduced into evidence.

The House of Representatives passed a similar bill, H.R. 5, in March.
Other significant federal developments include the Class Action Fairness Act of 2003, which passed the U.S. House of Representatives (H.R. 1115). A vote is expected on companion legislation (S. 274) in the Senate this month.

The Senate Judiciary Committee completed its mark-up of asbestos litigation reform legislation, S. 1125, and reported it favorably out of committee July 10. The bill creates a $108 billion trust fund to be financed largely by insurance and manufacturing firms who are currently asbestos defendants. Ten categories of damages have been developed, including five levels for non-malignant disease and five levels for cancer, with victims receiving compensation based on the severity of illness.

This year in the Record, ATRA tracked a new category of legislation—jury service reform. As jury service participation rates have declined and juries have become less and less representative of the community, there has been a new movement to boost participation rates by passing legislation to make it easier for citizens to serve. Arizona, Louisiana, and Utah passed jury service reform legislation during 2003, and we expect many more to do so in the year ahead.

A copy of the Record is available on the ATRA Web site (Adobe Acrobat file).

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