Civil Justice Reform Act Passes Ark. House

March 26, 2003

The Civil Justice Reform Act of 2003 passed the Arkansas House yesterday with the Senate’s amendments. The governor has
announced his intention to sign the bill next week.

“The comprehensive bill should provide much needed relief to struggling doctors and insurers,” said Sarah Heidenreich, Alliance of American Insurers (AAI) policy manager. “In addition, the general provisions of the bill will much improve the legal climate in Arkansas. The bill provides both general tort reform revisions as well as reforms specific to medical malpractice lawsuits.”

The bill modifies joint and several liability for personal injury, medical injury, property damage, or wrongful death. It provides that liability will be several rather than joint and that each defendant is allocated damages in direct proportion to his/her degree of fault. In assessing percentage of fault, the fact finder can consider the fault of a nonparty. The fault of a nonparty can be considered if a plaintiff entered into a settlement agreement with the nonparty or the defending party gives notice not later than 120 days prior to the date
of trial.

The percentage of a party’s several share, however, can be increased
where a several judgment has been entered against multiple defendants and the court determines upon a preponderance of the evidence that some of the share may not be reasonably collectible. The bill sets forth the percentage that a bill can be increased based on a defendant’s share of fault. The defendant does have a right of contribution from parties whose share was determined not to be collectible. This provision does not apply to punitive damages.

The bill does not amend Arkansas’ comparative fault law, which provides that a plaintiff may not recover any damages if he is more than 50 percent at fault.

In addition, the bill establishes the standards to collect punitive
damages. The plaintiff has the burden of proving that the defendant knew or should have know that his actions would result in damage or injury and acted in reckless disregard; or the defendant intentionally pursued a course of conduct to cause injury or damage. The plaintiff must meet the burden of proof with clear and convincing evidence.

Furthermore, the bill places limits on noneconomic damages. Noneconomic damages are limited to the greater of $250,000 or three times the amount of compensatory damages, not to exceed $1 million. These fixed amounts will be annually adjusted to the Consumer Price Index. Nonetheless, the limits do not apply when the defendant intentionally pursues a course of conduct for the purpose of causing injury. The provision does not limit the court’s ability to scrutinize damages or order remittitur.

The reform bill also contains a provision regarding venue. Civil
actions must be brought in the county where a substantial part of the
act or omission occurred; an individual defendant resides or an entity
has its principal office; or the county in which the plaintiff resided
or had its principal office. The residence of a properly joined class
representative may be considered but the residency of a putative or
actual member of a class may not be considered. Venue must be proper to each and every named plaintiff joined in an action unless the plaintiffs assert a right to relief jointly, severally or arising out of the same transaction or occurrence; and that a predominate number of questions and fact apply; the action will be more efficient and economical if joined; and the interests of justice supports joinder.

Any action for medical injury against a medical provider must be
brought in the county in which the alleged act or omission occurred. The bill also sets forth several other provisions specific to medical
malpractice actions. An expert providing testimony must be of the same specialty as the defendant. Furthermore, future damages exceeded $100,000 shall, at the request of either party, be made through periodic payments.

The bill provides that an action for medical injury must be filed with
reasonable cause or sanctions are applicable for the attorney or
plaintiff. Where expert testimony is required, an affidavit must be
signed and filed 30 days after the complaint, stating the familiarity
with the standard of care, the experts’ qualifications, the opinion to
how the standard of care has been breached; and how the breach caused injury. The bill also allows the statute of limitations to be tolled for 90 days, if written notice is provided and several other conditions are met.

The act applies to all causes of action accruing on or after the
effective day of the act. Based on the medical liability emergency, the bill is effective the date that the bill is signed.

“The Alliance applauds the Arkansas Legislature for passing comprehensive tort reform legislation,” added Heidenreich. “This bill
will provide both fairness and accountability in order to improve the
legal environment in Arkansas, making it a more favorable state in which to do business.”

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