Civil Justice Reforms Once Again a Legislative Priority

The Legislature has introduced several bills designed to further improve Wisconsin’s civil justice system, building on the dramatic reforms passed during the 2011-12 Session.

Eliminating Phantom Damages (AB 29/SB 22): This legislation allows juries in personal injury cases to see all the evidence when determining the amount owed to compensate the plaintiff for his or her medical expenses. Under current law, defendants in personal injury cases are not allowed to introduce evidence of payments made to the plaintiff by third parties (collateral sources) when determining the “reasonable value” of the medical expenses. As a result, plaintiffs and their attorneys unjustly receive windfalls, which some courts have referred to as “phantom damages.” For more information, see the Wisconsin Civil Justice Council’s (WCJC) talking points prepared by the Hamilton Consulting Group.

Personal Injury Trust Claims Transparency (AB 19/SB 13): The purpose of this legislation is to provide transparency and prevent fraud in lawsuits involving personal injury trusts by creating certain discovery requirements during litigation. Numerous types of personal injury trusts have been created under the federal bankruptcy code and state laws to ensure that injured people can be properly compensated. In some instances, plaintiffs who file (or could file) claims with these personal injury trusts may also seek compensation for their injuries through a second channel – lawsuits against solvent defendants (i.e., businesses) in the courts. The ability of plaintiffs to seek multiple recoveries – without any transparency regarding these multiple recoveries – is what this bill addresses. For more information, see WCJC’s talking points. Also, click here to read a Wall Street Journal editorial discussing a similar law enacted in Ohio.

Transparency in Private Attorney Contracting (AB 27/SB 19): This legislation requires the State to take certain steps before it hires private plaintiffs’ attorneys on a contingency fee basis. The interests of private plaintiffs’ attorneys are not always aligned with the interests of a state and its citizens. Private plaintiffs’ attorneys who are given complete control of litigation may seek settlements and judgments that maximize their profit rather than the benefit to a state and its citizens. And private attorneys have received excessive fees for their work on behalf of states in some cases. This legislation ensures that government attorneys retain control of the litigation and that consumers, victims, and taxpayers receive their fair share of any recovery. For more information, see WCJC’s talking points. Also, click here to read a Wall Street Journal article discussing similar legislation that has been enacted in other states.
 

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