Civil Justice Reforms Move Forward

With the budget having been completed, the focus of the remainder of the 2013-14 legislative session will be on individual bills, including civil liability reforms. In this area, the first portion of the 2013-14 legislative session has been very active and successful. Numerous bills improving Wisconsin’s legal climate have received public hearings, passed the Assembly and await action in the Senate. We fully expect the Senate to pass these bills when the Legislature reconvenes in the fall. Below is a summary of the major pieces of legislation making their way through the legislative process.

Limiting Phantom Damages (Collateral Source Rule) (SB 22/AB 29): This legislation allows juries in personal injury cases to see all the evidence when determining the amount required to compensate the plaintiff for his or her past medical expenses.

Due to a number of negative Wisconsin Supreme Court decisions, the civil defendants are precluded from introducing into evidence the amount of past medical expenses actually paid by the plaintiff’s health insurer – or medical assistance – rather than the amount that was billed by the medical provider. As a result, plaintiffs and their attorneys continue to receive windfalls in situations where the plaintiff did not pay the full amount of his or her medical expenses.

AB 29 received a public hearing in the Assembly, and we are hopeful it will be voted out of committee soon. The bill unfortunately has been stalled in the Senate due to concerns raised by health insurance subrogation attorneys, many of whom are members of the plaintiff’s bar.

Hopefully the Senate Judiciary Committee will allow for a public hearing so that it can learn how Wisconsin businesses are paying inflated settlements and verdicts due to the inability of courts and juries to see evidence of the amounts actually paid for the plaintiff’s medical expenses.

Personal Injury Trust Claims Transparency (SB 13/AB 19): The legislation will prevent double-dipping in personal injury cases that also involve potential compensation from trust funds created under the federal bankruptcy law. The most common types of lawsuits that also include potential compensation from federal trust funds are those involving asbestos exposure.

As explained in a Wall Street Journal editorial and article, with the proliferation of asbestos lawsuits and claims filed with trust funds, some unscrupulous plaintiff attorneys are double-dipping by withholding evidence from courts whether the plaintiff has received a trust claim payment, or whether they are eligible to receive such compensation. This allows plaintiff attorneys to double dip by recovering once against a business and then against the trusts.

The legislation was amended in the Assembly to address some concerns raised by opponents of the legislation. The bill passed the full Assembly and is expected to pass the Senate when it reconvenes in the fall.

Transparency in Private Attorney Contracting (SB 19/AB 27): This legislation provides greater transparency and oversight when the State of Wisconsin hires private plaintiff attorneys on a contingency fee basis. The bill also imposes caps on attorney’s fees for private plaintiff attorneys hired to represent the state on a contingency fee basis.

Former United States Congressman and Florida Attorney General Bill McCollum testified at both the Assembly and Senate hearings, and provided written testimony clearly explaining why this legislation is necessary.

The bill passed the Assembly with bipartisan support and is expected to pass when the Senate reconvenes in the fall.

Physician’s Duty of Informed Consent (SB 137/AB 139): This legislation clarifies a Wisconsin Supreme Court decision (Jandre v. Wisconsin Injured Patients and Families Compensation Fund) dealing with a physician’s duty of informed consent. Specifically, the bill establishes a reasonable physician standard and rejects strict liability for a missed diagnosis by a physician.

The bill has passed the Assembly with significant bipartisan support and is expected to pass the Senate later in the fall.

Lemon Law Reforms (SB 182/AB 200): Wisconsin is well known for having the worst lemon law in the nation. The law places unreasonable requirements on vehicle manufacturers that allow lawyers – like the self-proclaimed “Lemon Law King” – to win jackpot awards that have no nexus to fairness and the underlying goals of the law.

For example, in Marquez v. Mercedes-Benz USA, LLC, 2012 WI 57, the cost of the vehicle was roughly $56,000. Had the owner provided the manufacturer the necessary bank account information in a timely manner, the owner would have been given a check for the vehicle, plus other costs. However, the current law creates a substantial incentive for owners and their lawyers to impede resolution of a lemon law claim. By delaying the process one day beyond the 30-day statutory deadline, vehicle owners and their attorneys hit the jackpot, which in the Marquez case, was $618,000.

The legislation makes a number of changes to current law, such as:

  • removing automatic double damages (which includes the cost of the vehicle);
  • clarifying what it means for a vehicle to be “out of service”;
  • providing a more reasonable time period for providing a comparable vehicle; and
  • establishing a more reasonable statute of limitations.

The bill passed in the Assembly with overwhelming bipartisan support and is expected to pass when the Senate reconvenes this fall.

Inadmissibility of a Statement of Apology by a Health Care Provider (SB 129/AB 120): The bill received a public hearing the Assembly Committee on Health and passed out of Committee (7-4). The original bill language provides that a statement, gesture, or the conduct of a health care provider or a health care provider’s employee or agent, that expresses apology, benevolence, compassion, condolence, fault, liability, remorse, responsibility, or sympathy to a patient or the patient’s relative or representative is not admissible into evidence or subject to discovery in any civil action or administrative hearing regarding the health care provider as evidence of liability or as an admission against interest.

The bill was amended by deleting the language pertaining to discovery. Therefore, under the amended version, any statement, gesture, or conduct described above may be subject to discovery. However, as amended, the statement, gesture or conduct is not admissible as evidence of liability or an admission against interest.

For more information, please see the Wisconsin Medical Society’s memorandum supporting the bill.

Legislature Adopts Budget Provision Retroactively Applying 2011 Act 2’s Lead Paint Provisions: Many readers will recall that in 2011, Gov. Scott Walker introduced and the Legislature passed the omnibus civil liability reform bill (2011 Wisconsin Act 2). One of Act 2’s provisions overturned the Thomas v. Mallett decision, which established the “risk contribution” theory in lead paint cases.

Specifically, Act 2 requires the claimant to prove that the manufacturer made the specific product responsible for the injury. Act 2 further provides that if a claimant cannot identify the manufacturer of the specific product, and no other method of recovery is available, the court may apportion the liability to more than one manufacturer of the specific product liable for the injury. Act 2 was originally drafted to apply prospectively. The 2013-15 budget enacted by the Legislature applies Act 2’s language dealing with product liability retroactively to all cases, whenever filed or accrued. The legislation also includes a “Legislative Findings and Intent” section explaining the purpose of the law change

For more information on any of these proposals, please contact Andrew Cook or Robert Fassbender.