Tuesday, April 5, 2011
OKLAHOMA CITY – Governor Mary Fallin today signed a series of lawsuit reform measures into law, delivering on a key portion of her job-creation agenda.
“At the beginning of the year, I asked our Legislature to work with me to do everything we can to create more jobs and build a better environment for doing business in Oklahoma,” Fallin said. “Lawsuit reform was at the top of the list.”
"For too long, inflated legal fees have been an unnecessary cost-driver in the private sector and a burden on the medical community. As a result, we’ve seen businesses and doctors choose to locate in other states, depriving our citizens of good jobs, reducing access to medical care and driving up the costs for medical treatment.
“I’m thrilled to be able to sign into law measures which will directly address skyrocketing legal fees, protect our doctors, and help to bring more jobs and businesses into Oklahoma while still protecting the rights of plaintiffs and those who have suffered injuries. This is a great day for anyone who is committed to building a more prosperous state and a stronger economy.”
The comprehensive reform package includes three different measures. House Bill 2128, Senate Bill 862 and Senate Bill 865 were all signed into law today.
HB 2128 places a $350,000 hard cap on non-economic damages. Caps on non-economic damages have been proven to help create jobs and lower medical liability insurance premiums in other states. A 2008 study by the Perryman Group reports that after implementing non-economic damage caps, the state of Texas created 223,700 jobs, increased annual consumer and business spending by $55.3 billion, and grew state revenues by $1.4 billion. The study also reported that medical liability insurance premiums decreased by 21.3 percent and the number of lawsuits filed against hospitals decreased by 70 percent. Thirty states have now placed similar hard caps on non-economic damages, not including Oklahoma.
HB 2128 will not impact economic damages, such as lost wages, medical expenses and future loss of expected wages. The bill also includes an exception to the cap in cases of malicious conduct, gross negligence and reckless disregard.
SB 862 eliminates joint and several liability, sometimes known as the “deep pocket” rule, where each and every defendant in a tort lawsuit is liable for the entire amount of a plaintiff’s damage regardless of their degree of fault. SB 862 eliminates the “deep pocket” consideration, ensuring that plaintiffs seek defendants who are most at fault rather than defendants with the most financial assets.
SB 865 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.