LAWSUIT AWARDS CAP gets House OK.
After more than an hour of debate, the House voted 66-30 Monday for a constitutional amendment that would limit civil-lawsuit payouts.
Senate Joint Resolution 8 by Sen. Missy Irvin, R-Mountain View, is generally favored by businesses, including the medical industry, whose officials say expensive lawsuits make it difficult to provide goods and services at reasonable prices — including much-needed health care in rural areas.
SJR8 is generally opposed by lawyers who say the amendment puts a cap on the value of a human life, reduces the ability of the public to hold businesses accountable and allows lawmakers to interfere in court rules.
If the Senate concurs with the amended version of SJR8, the amendment would be referred to voters in the November 2018 general election.
Rep. Bob Ballinger, R- Hindsville, the House sponsor of the resolution, said the measure ensures fairness.
“The purpose of this is to end extortion that’s happening now in Arkansas,” he said. “Businesses are being extorted because they come in, they’re faced with: Do I go ahead and defend this even though I know it’s a frivolous lawsuit? Or do I pay it because in the end a jury may very well slap on me a $10 million judgment and I can’t afford that?”
But Rep. Douglas House, R-North Little Rock, said the amendment would constrain a lawyer’s ability to represent individual Arkansans against large corporations by limiting contingency fees.
“I was looking in the Bible yesterday. Jesus didn’t have many nice things to say about lawyers,” House said. “Then I looked a little bit closer, and it was the lawyers for the rich and powerful that he was fussing at — not the plaintiff’s lawyers — not the people who represented the common folks.”
The amended version of SJR8 would place a cap on noneconomic damages at $500,000. It would limit punitive damages to $500,000 unless the total amount of punitive damages is within three times the amount awarded for compensatory damages, which is the amount of money needed to replace what is lost.
The resolution would allow the Arkansas Supreme Court’s rules to take effect without a legislative vote, but lawmakers would be allowed to amend and repeal court rules as well as adopt new rules with a three-fifths vote. Currently, lawmakers do not have a role in court rules.
The proposed amendment limits contingency fees for attorneys in civil lawsuits, limiting them to one-third of the amount of net recovery obtained through a settlement, arbitration or judgment. A contingency fee is a sum that a lawyer receives as a fee only if the case is won.