Lets start by saying that a 2006 survey of all judges in Oklahoma found that 90% think there is not a litigation crisis of Oklahoma and weeping changes are not necessary. The same judges said they have the tools they need to dispose of frivolous law suits. No evidence was presented to the legislature in the 228 pages of this bill to support the notion that we have some great crisis.
How many on this forum have filed frivolous suits and been successful? How many attorneys wants to waste their time (uncompensated) doing so? We are solving a problem that is vastly over hyped. The net effect would be a health care savings of 0.5% and no economic advantage.
For full disclosure, I am an attorney that probably does 65%+ Plaintiff's work. Maybe half of that on contingency fees. I'm not wed to contingency fee contracts or Plaintiffs work in any way (I'm just a salaried slave), but my perspective is probably a Plaintiff's perspective.
FYI, here is the engrossed copy of the house bill:
http://webserver1.lsb.state.ok.us/2009-10bills/HB/HB1603_ENGR.RTFI didn't read all 228 pages of it and don't any of the people voting on it have either.
GUIDO:
1) Cap on non-economic damages:
Count the number of non-economic damages over $400K in Oklahoma in the last decade. There will be very, very few. Then go over those awards and find out in how many instances you think Oklahoma Citizens made a poor decision to grant the award. This is an attempt to make an issue where there really is none in order to begin restricted jury awards against companies.
Who does it help? Citizens? Victims?
Nope, it only serves to help the person or corporations who a jury of Oklahoman's have decided is deserving of a judgment against them. This law takes the power away from Oklahoma Citizens. Under this law if a company knew a product was hazardous and sold it anyway, causing dozens of deaths, their civil penalty would be a $300,000 punitive award. That'll teach 'em!
By taking power away from Oklahoma citizens and revoking the major civil recourse for intentional actions this law will accomplish its goal of increasing corporate profits and limiting the availability of the courts to people who rely on contingency fee arrangements. As it stands the court can restrict a demand for punitive damages up front, a jury can refuse to grant punitive damages, after a verdict the court can strip punitives, and the Defendant can appeal the award.
But Oklahoma judges, juries, and appellate courts are SO STUPID that we need a law telling us what makes sense. Surely a lobbyist in OKC knows better than an Oklahoman sitting on a jury or a judge who followed the case.
And does this apply to bad faith litigation? An insurance company makes a promise and you pay monthly to get coverage, then they just don't pay because it isn't profitable. After hiring an attorney to get them to do what they should have done in the first place - you can't really have no recourse. Surely that will keep them honest and paying claims.
2) Required Expert for Professional Negligence Actions
In other words in order to sue an attorney or a doctor you must first front $25,000 or the Courts are not available to you. If a surgeon leaves a sponge in your butt (real case I have), the wrong limb is removed, or a prescription is accidentally administered to the wrong patient - I don't think an expert should really be required to file suit. If an expert IS required to win the case, then why would the Defense want to mandate that the Plaintiff has to get one? Why not just let them go to trial and lose?
Right . . . because the goal is to limit the number of cases filed against Doctors NOT to make sure that injured plaintiffs get a day in court. Few firms can afford to front tens of thousands of dollars for experts in a medical malpractice case (euphemistically referred to as "professional negligence") and almost no injured parties can do so. The cost for dueling experts easily climbs into that range, not too mention the extra time it takes for all parties involved. Thus, most plaintiffs would be unable to afford it themselves and fewer firms would be able to take the case.
With the knowledge that most people can't afford to sue for medical negligence the industry is then free to dictate settlement terms or just refuse to settle as it sees fit. It will certainly help achieve the goal of compensating victims of medical negligence less and restricting people from bringing suits in the first place.
3) Joint and Several Liability
I am not familiar enough with this proposal to speak intelligently. In general if multiple parties contributed equally to cause an ill I don't care who I collect from. If one party feels they are not as-guilty as another, they can sue each other to work it out. If multiple parties shoot my plaintiff, he really doesn't care who's bullet cost him $100,000 in lost wages and medical bills and who's bullet cost him $50,000. He just wants $150,000 and the bad actors can figure it out amongst themselves.
4) NO idea on the "Hamburger" section. I have not heard of this and could not find it in the text of the measure. My guess is it is more pandering and not needed. These lawsuits are almost always thrown out by the court and if not, certainly we can trust a jury of our peers to make the determination.
When did we decide that juries and the courts were incompetent?
5) Guido, you failed to mention that it caps contingency fees at 33%.
First, this isn't really a restriction on plaintiffs attorneys, it is a reduction in contracting rights for every Oklahoman. You, as a citizen of the stat of Oklahoma, can no longer sign the standard contingency fee contract for trial. You've always been free to refuse, negotiate for a better rate, offer an hourly rate or go to a different attorney - but again the State has decided you are too stupid to contract on your own and will decide what decisions you should make.
Now, defense lawyers can still charge whatever they please and insurance firms can pay as much as they want to defend a lawsuit. But how much a plaintiff can pay to prosecute a lawsuit is going to be capped. A typical plaintiffs attorney would work for $225 an hour in lieu of their contingency fee while a typical defense firm is paid $350 per hour for attorney work. Why is the state telling one party what is fair and allowing the other party to do whatever they want?
33% is the standard rate for a simple case before trial. When suit is filed the fee generally goes up to 40% and often up to 45% for trial. 50% can be charged in some cases, generally where the attorney doesn't think they can win and doesn't want to take the case (it would be a hint to take the case elsewhere). This is proportional to the amount of time invested in the case and the amount of risk assumed.
A large PI firm has an average case valued around $15,000. There is no way they could survive as a business if they took many cases to trial and were compensated $5,000 for that trial. After putting in hours in settlement talks and discovery a trial will easily add 10-20 hours of attorney time. Then you risk losing at trial and eating hours and probably costs. It simply wouldn't be worth it to risk my time for my clients case when I could take a quick settlement and save a ton of time. Why would I want to present the case to a jury?
As a result the insurance company could offer you whatever they wanted, knowing that you are not likely to hire someone to look out for your interests. Even if you did hire an attorney, at a cap of 33% the insurance company knows that you are not likely to take it to trial and clearly will negotiate with that knowledge in mind. Again, this will definitely archive the desired goal of limiting payouts to Oklahomans.
6) Summary Judgment Rules
I am granted Summary Judgments not infrequently. If there are no facts in dispute, the judge decides the law and the case is finished. I guess I don't understand the problem with the current system.
Based on the rest of the bill, I can only assume that the proposed rule limits access to the courts, reduces recoveries, or takes the decision away from juries or judges.
7) Jobs?
The advertisements for this bill make it sound like the real goal is to bring jobs to Oklahoma. Having worked in industry and dealt with a crap ton of contracting for insurance from both sides and for rates for work performed in Oklahoma, Arkansas, Missouri and Kansas - I can attest that the rates for liability are very comparable and sometimes favorable in Oklahoma. I have never heard of a company refusing to operate in Oklahoma because of liability insurance laws.
The problem is WORKERS COMPENSATION rates, which are frequently twice what our neighbors rates are. And I would suggest that it is not reflected in attorney fees or awards in the state, but rather something in the operation of the system.
But the notion that restricting citizens rights in this proposed legislation will increase the availability of jobs is a total farce.
- - -
The entire bill does nothing but pander to Defense interests. It doesn't do anything to help Oklahomans: it reduces their potential recoveries, it will limit their access to attorneys, restricts their contracting rights, it takes decisions away from Oklahomans on juries, it reduces the roll of judges, and in almost every instance sets out to solve problems that 90% of the people in the know don't think are actually exist. Why are companies afraid to allow plaintiffs in Oklahoma to face juries on an even playing field?
A big congratulations is in order for insurance lobbyists in Oklahoma City - other than them there are no winners in this legislation. It's bad for plaintiffs lawyers, plaintiffs, defense lawyers, judges, juries, and victims. But it serves the interests of people who are afraid a jury would find them liable to their victims.
Conan,
I think you are lacking a basic understaning of punitive damages.
Punitive damages don't really effect most insurance rates. It is punishment for wrongdoing, it is not covered by many liability policies. If an industrial fabricator intentionally built a heat exchanger or a boiler weak to save money and shipped it KNOWING it was dangerous, then you can get punitive damages. If a car manufacturer knew a car was dangerous but a recall was to expensive. If a doctor knew which arm to amputate but removed the wrong one simply out of spite.
Punitive damages work. How many auto recalls are there now? It is cheaper for car manufacturers to make sure their products are safe than it is for them to just kill a few hundred people. It is cheaper for the boiler maker to pressure test vessel or over build them than it is to sell substandard products. That is only true because of the risk of substantial lawsuits.
If a boiler made by Inserv or Baker Hughes explodes and kills a couple people they will not be out a significant amount of money to their bottom line. If it is proven they KNEW these were dangerous and sold them anyway to increase profits, then they would be PUNISHED for their reckless profiteering by punitive damages and thus, the entire industry dissuaded from continued unsafe practices. It disrupts the profit formula (risk of catastrophic failure x cost of each failure < savings from inadequate produce, then produce the inadequate product).
Also worth noting that the myth of huge punitive awards is just that, a myth. I'm sure we could dig up a few examples that seem insane, and one or two of those would still seem outrages after the appeals. But in general the punitive damage awards are in line with the actual damages (all states that I am aware of have a formula for what is reasonable) - which of itself can defeat the purpose of punitive damages. But it negates your 20 times punitive award argument. Most punitive damages are 1x at best, they are rarely sustained above 3x. There are instances with nearly no economic damages but in which a deterrent is certainly called for.
And of course no defendant would want punitive damages assessed against them. Just as no plaintiff wants to suffer conduct that shows a "wanton disregard for the rights of others to such an extent that the State of Oklahoma has an interest in assessing punitive damages." We aren't talking about accidents here, we are talking about reckless or intentional conduct that deserves to be punished, not just required to get the victim back to par.
Furthermore, punitive damages are not perfectly analogous to criminal punishments. Many crimes are not rational acts. Rarely does a person sit down and consider murdering someone and decide it would be worth life in prison. HOWEVER, business are rational actors. A good business will consider possible economic and good will losses associate with a decision. Hence, it can serve as a detriment.
And yes. I know that I help pay punitive awards in many ways. But I know that the punishment factor is much more important to the tortfeasor than to me. Under your logic, why allow any rewards at all? They all cost us money. Just start eroding your rights to save money.
Overall medical malpractice insurance premium account for 2% of overall health care cost. According to the CBO that cost could be cut by 25% if we eliminated punitive damages - or 0.5% savings in overall health care costs. Given the implications (that there is no recourse to punish), it surely isn't worth eliminating more of my rights to save .5%. In fact, there is a solid argument to suggest that the threat of punitive damages saves the system a lot more than .5% as procedures are implemented to make sure large awards against hospitals do not occur.
And finally, the proposed legislation does NOTHING to address the antidote you gave. Suits can always be filed for something ridiculous, and the procedures are already in place to throw them out. I wish judges would assess more costs and fees for bad behavior from both sides and the rules are there to do it. But it really has nothing to do with the matter at hand.
Current primary punitive damage statute:
http://www.oscn.net/applications/oscn/DeliverDocument.asp?CiteID=71127
Truth be told, I'm not too worried. We would probably just take far fewer contingency case (probably fewer civil cases altogether) and require plaintiffs to tender a retainer like a criminal case. When a few bad cases came down under the new law people will be pissed and the pendulum will swing back the other way. In general people realize when a law takes something away from them and in the long run they want it back.
