W. Va. Gov. Forms Working Groups to Discuss Insurance, Tort Reforms

February 14, 2005

West Virginia Gov. Joe Manchin has formed several formal working groups to discuss insurance reforms and frivolous lawsuits. The groups are comprised mainly of lobbyists and lawmakers.

During his State-of-the-State address Manchin said these topics will be at the top of his agenda, but as the West Virginia Legislature begins its 60 day sessions the governor has no bills on those issues.

“We’re meeting with interested parties from various organizations to hear what concerns each stakeholder has,” Brian Kastick, who’s overseeing the groups as Manchin’s public policy director told the Charleston Gazette. “We’re trying to find some common ground.”

After having been largely brushed aside during past fights over workers’ compensation and medical malpractice lawsuit limits, plaintiffs’ lawyers and labor groups aim to temper any civil system changes and match them with regulatory measures for insurers.

Manchin’s challenge: both sides in this showdown helped form the coalition that swept him into office with nearly two-thirds of the vote. Crafting these bills will test supporters just as his plan to raise severance taxes for workers’ compensation tested his allies in the coal, oil and natural gas industries.

Topics of greatest concern are:

Right to complain. Insurers want the right to sue replaced with the right to complain to the state’s insurance commissioner. Although he favors some lawsuit limits, House Speaker Bob Kiss, D-Raleigh, has suggested a compromise route of allowing bad-faith lawsuits only after the insurance commissioner has a chance to resolve the grievance.

Measures to help consumers with insurance costs may prove even trickier for that working group according to Kiss. “How do you make sure you stop the growth in insurance costs, or better yet, turn back the costs?” he asked. “If you put a statutory mandate in the legislation, wouldn’t that make the state unattractive to insurers? Isn’t that already part of the problem?”

An end to third-party bad-faith lawsuits. State law now allows non-policyholders to sue an insurance company that allegedly fails to deal with their claims against a policyholder in good faith.

An end to the deliberate intent standard. The workers’ compensation system was meant to replace the lawsuits that people used to file against their employers over workplace injuries. Employers may now be sued only if employees can prove deliberate intent to provide an unsafe workplace

An end to joint and several liability. When a jury awards damages against more than one defendant, it assigns a percentage of blame to each. But state law allows the plaintiff to recover the award from whichever defendant can pay, making the defendants both jointly and individually liable for the damages.

The method aims to ensure a jury verdict is honored and a plaintiff is compensated, but it can also lead to defendants paying a percentage of a damage award greater than their share of fault. To compensate them, the law allows those defendants to sue the under- or nonpaying defendants for the amounts they owe.

Manchin appeared to address the issue in his State of the State address, when he said that “a party should be treated justly and be required to pay only its fair share.” This could signal his desire for strictly several liability, in which defendants only pay a share of a damage award equal to their share of the blame.

West Virginia has already switched to several liability in medical malpractice cases, but it also is creating a victims’ compensation fund to ensure plaintiffs in such cases receive the full verdict amount.

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