House mem­bers de­bate ed­its to tort-caps pro­posal

Northwest Arkansas Democrat-Gazette - - VOICES - JOHN MORITZ AND BRIAN FANNEY

The state House had a lengthy de­bate Fri­day on duel­ing re­vi­sions of­fered for a pro­posed con­sti­tu­tional amend­ment lim­it­ing dam­ages awarded in civil law­suits.

By the end of the nearly two- hour dis­cus­sion, law­mak­ers voted to leave Se­nate Joint Res­o­lu­tion 8 as it had been ap­proved as re­vised by a com­mit­tee on Thurs­day: a pro­posal to set the max­i­mum limit in law­suit awards at $500,000 for puni­tive dam­ages and the same for noneco­nomic dam­ages, which are for losses that don’t have a mon­e­tary value.

Those caps have been pitched by SJR8 sup­port­ers as a way of cre­at­ing a bet­ter busi­ness en­vi­ron­ment by re­duc­ing the li­a­bil­ity Arkansans and cor­po­ra­tions would face from po­ten­tial law­suits. How­ever, op­po­nents ar­gue such lim­its on awards re­duce Arkansans’ ac­cess to jus­tice. Pre­vi­ous at­tempts to en­act tort-award lim­its in Arkansas have been re­jected by courts in re­cent years.

Both cham­bers of the Gen­eral Assem­bly must ap­prove the res­o­lu­tion as amended be­fore it can be re­ferred to the vot­ers on the 2018 bal­lot.

The orig­i­nal ver­sion of SJR8 passed by the Se­nate ear­lier this month placed caps

for dam­ages puni­tive at and $250,000. noneco­nomic

The cap was in­creased to $500,000 through an amend­ment by Rep. Bob Ballinger, R-Hindsville, the House spon­sor of SJR8 and the chair­man of the House State Agen­cies and Gov­ern­men­tal Af­fairs Com­mit­tee. The com­mit­tee ap­proved the change and the res­o­lu­tion as amended in a vote late Thurs­day af­ter­noon.

Ballinger’s changes also in­cluded a pro­vi­sion less­en­ing law­mak­ers’ in­volve­ment in Arkansas Supreme Court rules on plead­ing, prac­tice and pro­ce­dure, com­pared with the orig­i­nal ver­sion of SJR8. In the orig­i­nal ver­sion, Supreme Court rules wouldn’t take ef­fect un­til law­mak­ers ap­proved them.

In the new ver­sion, the court’s rules would take ef­fect with­out a leg­isla­tive vote, but law­mak­ers would be al­lowed to amend and re­peal court rules as well as adopt rules with a three-fifths vote.

Cur­rently, law­mak­ers don’t have a role in court rules.

A pro­vi­sion re­main­ing un­changed re­gards con­tin­gency fees for at­tor­neys in civil law­suits, lim­it­ing them to onethird of the amount of net re­cov­ery ob­tained through a set­tle­ment, ar­bi­tra­tion or judgment. A con­tin­gency fee is a sum a lawyer re­ceives as a fee only if the case is won.

SJR8 al­lows puni­tive dam­ages to ex­ceed $500,000 to a max­i­mum of three times the amount awarded for com­pen­satory dam­ages, which is the amount of money needed to re­place what is lost.

Be­fore the amended res­o­lu­tion could be con­sid­ered by the full House on Fri­day morn­ing, an ob­jec­tion was filed by Rep. Jimmy Gaz­a­way, R-Paragould, who said the changes had been made past a 4:30 p.m. dead­line Thurs­day.

The ob­jec­tion led the House to sus­pend the rules to con­sider the amend­ment, which was ap­proved by the full cham­ber. The House then con­sid­ered a com­pet­ing amend­ment by Gaz­a­way, which was re­jected.

Through­out the morn­ing ses­sion, law­mak­ers ac­cused op­po­nents of try­ing to rush through changes.

“This is the slick­est move I’ve ever seen,” Rep. Char­lie Collins, R-Fayet­teville, said of Gaz­a­way’s amend­ment, which was up­loaded to the Leg­is­la­ture’s web­site at 10:36 a.m. as the House was meet­ing.

Gaz­a­way’s amend­ment would have lim­ited puni­tive dam­ages to $250,000 or four times the amount awarded for com­pen­satory dam­ages. The limit wouldn’t be in ef­fect if a de­fen­dant in­ten­tion­ally caused in­jury or dam­age to a client.

It would have set noneco­nomic dam­ages at $1 mil­lion un­less the de­fen­dant com­mit­ted an act that was a “gross de­vi­a­tion from the stan­dard of care that a rea­son­able and pru­dent per­son would have ex­er­cised” re­sult­ing in harm to a per­son or in­ten­tion­ally com­mit­ted an act to cause in­jury. It also would re­move the cap on noneco­nomic dam­ages for cases that re­sult in death.

Gaz­a­way’s amend­ment would have lim­ited con­tin­gency fees to one- third of gross re­cov­ery — be­fore any re­duc­tion for lawyer costs.

“This is not nec­es­sar­ily some­thing I re­ally wanted to do,” Gaz­a­way said. But the res­o­lu­tion, he said, had been “rail­roaded through with very lit­tle de­bate on amend­ing the con­sti­tu­tion.”

Gaz­a­way was also ac­cused Fri­day by Rep. Michelle Gray, R-Mel­bourne, of telling the State Agen­cies com­mit­tee on Thurs­day his changes had the sup­port of Gov. Asa Hutchin­son. Gaz­a­way told the com­mit­tee he had been in talks with the gov­er­nor’s of­fice.

“The gov­er­nor’s made some sug­ges­tions to me that he would like to see in the form of an amend­ment and I have un­der­taken that task and have been draft­ing an amend­ment that meets with what the gov­er­nor has sug­gested to me that he would like to see in an amend­ment,” Gaz­a­way said on Thurs­day.

J.R. Davis, a spokesman for Hutchin­son, said both Gaz­a­way and Ballinger sought the gov­er­nor’s in­put.

“The gov­er­nor ap­pre­ci­ates Rep. Gaz­a­way lis­ten­ing to the gov­er­nor’s con­cerns re­gard­ing the cur­rent tort re­form mea­sure, but in the end, Rep. Ballinger’s amend­ment went fur­ther, was a bet­ter step in the right di­rec­tion, so the gov­er­nor sup­ported Rep. Ballinger’s amend­ment,” Davis said.

In­creas­ing the thresh­old to $500,000 and soft­en­ing the amend­ment in re­gard to leg­isla­tive con­trol of court rules were changes Hutchin­son sup­ported, Davis said.

Rep. Andy Davis, R-Lit­tle Rock, said on the House floor he ex­pected a fi­nal vote on SJR8 on Mon­day. If passed, the amended ver­sion of the res­o­lu­tion would have to be sent back to the Se­nate.

In each bi­en­nial reg­u­lar ses­sion, law­mak­ers may re­fer up to three pro­posed amend­ments to vot­ers in the next gen­eral elec­tion.

Arkansas Demo­crat-Gazette/JEFF MITCHELL

Rep. Jimmy Gaz­a­way, R-Paragould, at­tempts dur­ing Fri­day’s House ses­sion to amend Se­nate Joint Res­o­lu­tion 8 on lim­it­ing law­suit dam­age awards.

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