Lawsuit Reform
By Rick Moore
"In a year when many statehouses are lining up in favor of economic growth and against parasitic personal injury lawyers, Oklahoma lawmakers have sent to the governor a bill comprising reasonable limits on awards for noneconomic damages in civil lawsuits." -- American Tort Reform FoundationOklahoma recently passed historic lawsuit reform which cause the trial lawyers to shudder as that one golden case that would set them up for life is no longer attainable in the great state of Oklahoma. Insurance premiums should not only improve for businesses but also for homeowners in the long run. It's a win-win for business owners and homeowners alike. Trial lawyers will still have the ability to become wealthy over time; they just won't have the opportunity to put their kids through college, pay off the mortgage, fund their retirement, and buy a new luxury vehicle by winning one golden case through litigation lottery.
The reform is a three-tiered attack on the system. We know that Title 5 of the Oklahoma Statutes allow Oklahoma attorneys to charge up to 50-percent on contingency cases. Most plaintiff attorneys will charge between 30-percent and 50-percent of the settlement award. In addition, Oklahoma attorneys currently work in an arena known as joint and several liability. In a nutshell, if the plaintiff was injured by Bob, Joe, and Sally the plaintiff could only sue each individual for the amount of damages allocated to that tortfeasor. However, should one of the defendants be responsible for more than 50-percent of the damages, the plaintiff may sue the said tortfeasor for 100-percent of the plaintiff's damages.
If Joe was 55-percent negligent, Sally was 35-percent negligent, and Bob was 10-percent negligent, the plaintiff attorney would look for the individual with the deepest pocket of money which is normally the tortfeasor with homeowner insurance or auto insurance. If Joe happened to have a $300,000 homeowners policy with an additional $1-million personal liability umbrella policy, he would be the prime target. Once Joe paid his judgment he could then pursue a contribution claim against Sally and Bob for their share of the loss. For Joe's sake, he would hope they, too, would have insurance policies. Mr. Joe is being penalized for demonstrating personal responsibility and as a result his premium will be increased the following year based on his new claim frequency. Now what's the incentive to join this madness? The new law changes the arena so the plaintiff must sue each responsible defendant in order to collect 100-percent of his damages. The plaintiff can no longer collect 100-percent of his damages from Joe. The plaintiff must also pursue Sally and Bob if he desires to collect 100-percent of his damages.
The second piece of legislation places a cap on non-economic awards. A jury will still consider the case and review any questions of fact. The settlement award is divided into special damages and general damages. Special damages are your monetary damages such as medical expenses, lost wages, and property damage. This law does not affect this award. A plaintiff may also receive punitive damages to punish someone or a company when malice, or gross negligence is involved. This law does not affect damages that involve gross negligence. General damages involve pain and suffering for which there is no exact dollar figure to associate. This law now caps this award at $350,000. A plaintiff may still stack the special, general and punitive awards. For example, a plaintiff who is injured and becomes a paraplegic as a result of a drunk driver's negligence travels to the Rehabilitation Institute of Chicago or the Mayo Clinic for the best possible rehabilitation care available. Prior to this medical care he visits Johns Hopkins Hospital for the very best neurological care. One can imagine the medical expenses could quickly surmount $1-million. His future medical expenses could easily go north of the $2-million mark. Let's say that Mr. Plaintiff was formerly a radiologist earning $60,000 annually, but can no longer perform this job as a result of his injuries. His attorney contracts an expert economist to forecast Mr. Plaintiff's loss of future earning capacity, including retirement. That amount is $1.9-million. A life care plan is also presented which totals $2.5-million. Let's also consider that a jury decides on awarding $100,000 in punitive damage since the driver was intoxicated and that his intoxication was a cause-in-fact of the accident. The plaintiff attorney presents the tremendous pain that is involved in the rehabilitation process, not to mention the pain Mr. Plaintiff experienced during the accident. The jury may still award Mr. Plaintiff $3-million in medical expenses, $1.9-million in lost wages, a life care plan of $2.5-million, and must now cap his pain and suffering at $350,000. And, don't forget the punitive damages of $100,000. The total award available in this case is $7.85-million. It is horrific for an individual to experience a loss such as paraplegia. The only reason to use such a gross catastrophic example is to explain the affect of the $350,000 cap. There is no cap on medical expenses. There is no cap on the wages that a plaintiff may lose over his lifetime. There is no cap on the amount of property damage that may be claimed.
While our legislators were voting on legislation to enact the $350K-cap, I found it laughable to read where Oklahomans for Liberty was attacking proponents of this reform as anti-constitutionalists proclaiming that pro-reformers were stomping on the Seventh Amendment. This group failed to mention the Oklahoma Uniform Jury Instructions wherein caps are listed for punitive damages awarded by the jury of a civil court. Moreover, the appellate court has decreased settlement awards handed down by juries in several cases over the years. Is the jurist opposing the Seventh Amendment by refusing to impose the will of the jury? The new law does not change the right to have a trial by jury in the Oklahoma Constitution. Issues of fact arising for the recovery of money in excess of $1,500.00 must be tried by a jury unless a jury trial is waived.
The third tier of recent tort reform requires that juries be instructed in civil cases that no part of an award for damages for personal injury or wrongful death is subject to federal or state income tax; and the jury should not consider income taxes when determining a proper compensation award.
As Republicans we know all to well of unintended consequences of legislation with good intentions. There is some concern from insurance professionals and defense attorneys that Senate Bill 862 may be misinterpreted by our liberal state supreme court so that Oklahoma would move from a modified comparative negligence state to a pure comparative negligence state like Louisiana. Currently, a plaintiff may be 50-percent at fault and still recover 50-percent of his damages. If the plaintiff is 51-percent or more at fault, he recovers nothing. Under a pure comparative negligence rule a plaintiff who is 99-percent at fault can still recover 1-percent of his damages. The American Tort Reform Foundation's Judicial Hellholes Report says: "Beware of Louisiana's civil justice system -- it can lead to verdicts of hundreds of millions of dollars, even without evidence of actual harm."
Senate Judiciary Committee Chairman Anthony Sykes (R-Moore) said "These bills protect Oklahomans, our doctors and our businesses from frivolous lawsuits. Oklahoma is way behind the curve on these reform measures. Just a few short years ago a Democrat President Pro Tem wrote a letter to encourage attorneys in other states to bring their lawsuits to Oklahoma because we had not enacted these reforms that our neighbors had. We are sending the opposite message today, Oklahoma will no longer be known as a lawsuit destination state."
Rick A. Moore serves on the Ethics & Religious Liberty Committee of the Baptist General Convention of Oklahoma and is State Committeeman from the Wagoner County Republican Party. He has been a conservative activist in the Oklahoma Republican Party for two decades, and is the NE Bureau Chief for the Oklahoma Constitution newspaper. He may be contacted at: okconstitution@gmail.com
Latest Commentary
Thursday 2nd of May 2024
Thursday 2nd of May 2024
Thursday 2nd of May 2024
Thursday 2nd of May 2024
Thursday 2nd of May 2024
Thursday 2nd of May 2024
Thursday 2nd of May 2024
Thursday 2nd of May 2024
Thursday 2nd of May 2024