SATURDAY, FEBRUARY 25, 2017 House debates edits to tort-caps proposal
Floor vote on measure expected next week
The state House had a lengthy debate Friday on dueling revisions offered for a proposed constitutional amendment that would set limits on 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 Gen-
eral Assembly must approve the resolution as amended before it can be referred to the voters on the November 2018 ballot.
The original version of SJR8 passed by the Senate earlier this month placed caps for punitive and noneconomic damages at $250,000.
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 would not 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 new rules with a three-fifths vote.
Currently, lawmakers do not have a role in court rules.
A provision that remained
unchanged regards 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.
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 would not 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” that resulted 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 that 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 had 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 that 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.