Torts; Medical Tort Reform; Joint and Several Liability
Revises medical tort reform laws to: allow for arbitration of medical services contracts, create a new cap on noneconomic damages for medical torts, allow for introduction of evidence, limit contingency fees, and allow for periodic payments for future damages. Makes a tortfeasor liable for no more than the percentage of share of damages attributable to that individual or entity. Removes exceptions from law, thus abolishing joint and several liability.
TWENTY-FIFTH LEGISLATURE, 2009
STATE OF HAWAII
A BILL FOR AN ACT
relating to torts.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:
PART I. MEDICAL TORT REFORM
SECTION 1. Chapter 658A, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:
"§658A- Arbitration in medical services contracts. (a) Any contract for medical services which contains a provision for arbitration of any dispute as to a medical tort, as defined in section 671-1, shall have a provision as the first article of the contract that shall be expressed in substantially the following language: "It is understood that any dispute as to medical malpractice that is as to whether any medical services rendered under this contract were unnecessary or unauthorized, or were improperly, negligently, or incompetently rendered, will be determined by submission to arbitration as provided by Hawaii law, and not by a lawsuit or resort to court process except as Hawaii law provides for judicial review of arbitration proceedings. Both parties to this contract, by entering into it, are giving up their constitutional right to have any such dispute decided in a court of law before a jury, and instead are accepting the use of arbitration."
(b) Immediately before the signature line provided for the individual contracting for the medical services shall appear the following in at least 10-point bold red type:
"NOTICE: BY SIGNING THIS CONTRACT I AGREE TO HAVE ANY ISSUE OF MEDICAL MALPRACTICE DECIDED BY NEUTRAL ARBITRATION AND I AM GIVING UP MY RIGHT TO A JURY OR COURT TRIAL AS PROVIDED IN ARTICLE 1 OF THIS CONTRACT."
(c) Once signed, such a contract governs all subsequent open-book account transactions for medical services for which the contract was signed until or unless rescinded by written notice. Written notice of such rescission may be given by a guardian or conservator of the patient if the patient is incapacitated or a minor.
(d) Where the contract is one for medical services to a minor, it shall not be subject to disaffirmance if signed by the minor's parent or legal guardian.
(e) A contract is not a contract of adhesion, nor unconscionable or otherwise improper, where it complies with subsections (a), (b), and (c) of this section."
SECTION 2. Chapter 663, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:
"§663- Medical tort actions, limitation on non-economic damages. Notwithstanding section 663-8.7, with respect to actions for medical torts, as defined in section 671-1, noneconomic damages shall be limited to a maximum award of $250,000."
SECTION 3. Chapter 671, Hawaii Revised Statutes, is amended by adding three new sections to be appropriately designated and to read as follows:
"§671-A Evidence of collateral benefits admissible. (a) In the event the defendant so elects, in an action for a medical tort, the defendant may introduce evidence of any amount payable as a benefit to the plaintiff as a result of the personal injury underlying the action pursuant to the United States Social Security Act, any state or federal income disability or worker's compensation act, any health, sickness or income-disability insurance, accident insurance that provides health benefits or income-disability coverage, and any contract or agreement of any group, organization, partnership, or corporation to provide, pay for, or reimburse the cost of medical, hospital, dental, or other health care services. Where the defendant elects to introduce such evidence, the plaintiff may introduce evidence of any amount which the plaintiff has paid or contributed to secure the plaintiff's right to any insurance benefits concerning which the defendant has introduced evidence.
(b) No source of collateral benefits introduced pursuant to subsection (a) shall recover any amount against the plaintiff nor shall it be subrogated to the rights of the plaintiff against a defendant.
§671-B Attorney fees. (a) An attorney shall not contract for or collect a contingency fee for representing any person seeking damages in connection with an action for a medical tort in excess of the following limits:
(1) Forty per cent of the first $50,000 recovered.
(2) Thirty-three and one-third per cent of the next $50,000 recovered.
(3) Twenty-five per cent of the next $500,000 recovered.
(4) Fifteen per cent of any amount on which the recovery exceeds $600,000.
The limitations shall apply regardless of whether the recovery is by settlement, arbitration, or judgment, or whether the person for whom the recovery is made is a responsible adult, an infant, or a person of unsound mind.
(b) If periodic payments are awarded to the plaintiff pursuant to section 671-C, the court shall place a total value on these payments based upon the projected life expectancy of the plaintiff and include this amount in computing the total award from which attorney's fees are calculated under this section.
(c) For purposes of this section, "recovered" means the net sum recovered after deducting any disbursements or costs incurred in connection with prosecution or settlement of the claim. Costs of medical care incurred by the plaintiff and the attorney's office overhead costs or charges are not deductible disbursements or costs for such purpose.
§671-C Periodic payments. (a) In any medical tort action, a court shall, at the request of either party, enter a judgment ordering that money damages or the equivalent for future damages of the judgment creditor be paid in whole or in part by periodic payments rather than by a lump-sum payment if the award equals or exceeds $50,000 in future damages. In entering a judgment ordering the payment of future damages by periodic payments, the court shall make a specific finding as to the dollar amount of periodic payments which will compensate the judgment creditor for such future damages. As a condition to authorizing periodic payments of future damages, the court shall require a judgment debtor who is not adequately insured to post security adequate to assure full payment of such damages awarded by the judgment. Upon termination of periodic payments of future damages, the court shall order the return of this security, or so much as remains, to the judgment debtor.
(b) A judgment ordering the payment of future damages by periodic payments shall specify the recipient or recipients of the payments, the dollar amount of the payments, the interval between payments, and the number of payments or the period of time over which payments shall be made. Such payments shall only be subject to modification in the event of the death of the judgment creditor.
(c) In the event that the court finds that the judgment debtor has exhibited a continuing pattern of failing to make payments, the court shall find the judgment debtor in contempt of court, and, in addition to the required periodic payments, shall order the judgment debtor to pay the judgment creditor all damages caused by the failure to make such periodic payments, including court costs and attorney's fees.
(d) Money damages awarded for loss of future earnings shall not be reduced or terminated by reason of the death of the judgment creditor, but shall be paid to persons to whom the judgment creditor owed a duty of support, as provided by law, immediately prior to death. In such cases the court which rendered the original judgment may, upon petition of any party in interest, modify the judgment to award and apportion the unpaid future damages in accordance with this subsection.
(e) Following the occurrence or expiration of all obligations specified in the periodic payment judgment, any obligation of the judgment debtor to make further payments shall cease and any remaining security given pursuant to subsection (a) shall revert to the judgment debtor.
(f) For purposes of this section:
"Future damages" includes damages for future medical treatment, care or custody, loss of future earnings, loss of bodily function, or future pain and suffering of the judgment creditor.
"Periodic payments" means the payment of money or delivery of other property to the judgment creditor at regular intervals.
(g) It is the intent of the legislature in enacting this section to authorize the entry of judgments in medical tort actions against health care providers which provide for the payment of future damages through periodic payments rather than lump-sum payments. By authorizing periodic payment judgments, it is the further intent of the legislature that the courts will utilize such judgments to provide compensation sufficient to meet the needs of an injured plaintiff and those persons who are dependent on the plaintiff for whatever period is necessary while eliminating the potential windfall from a lump-sum recovery which was intended to provide for the care of an injured plaintiff over an extended period, who then dies shortly after the judgment is paid, leaving the balance of the judgment award to persons and purposes for which it was not intended. It is also the intent of the legislature that all elements of the periodic payment program be specified with certainty in the judgment ordering such payments and that the judgment not be subject to modification at some future time which might alter the specifications of the original judgment."
SECTION 4. Section 657-7.3, Hawaii Revised Statutes, is amended to read as follows:
"§657-7.3 Medical torts; limitation of
actions; time. [
No action for injury or death against a chiropractor,
clinical laboratory technologist or technician, dentist, naturopath, nurse,
nursing home administrator, dispensing optician, optometrist, osteopath,
physician or surgeon, physical therapist, podiatrist, psychologist, or
veterinarian duly licensed or registered under the laws of the State, or a
licensed hospital as the employer of any such person, based upon such person's
alleged professional negligence, or for rendering professional services without
consent, or for error or omission in such person's practice, shall be brought
more than two years after the plaintiff discovers, or through the use of
reasonable diligence should have discovered, the injury, but in any event not
more than six years after the date of the alleged act or omission causing the
injury or death. This six-year time limitation shall be tolled for any period
during which the person has failed to disclose any act, error, or omission upon
which the action is based and which is known to the person. Actions by a minor shall be commenced within
six years from the date of the alleged wrongful act except the actions by a
minor under the age of ten years shall be commenced within six years or by the
minor's tenth birthday, whichever provides a longer period. Such time
limitation shall be tolled for any minor for any period during which the
parent, guardian, insurer, or health care provider has committed fraud or gross
negligence, or has been a party to a collusion in the failure to bring action
on behalf of the injured minor for a medical tort. The time limitation shall also
be tolled for any period during which the minor's injury or illness alleged to
have arisen, in whole or in part, from the alleged wrongful act or omission
could not have been discovered through the use of reasonable diligence.] Medical
tort actions, as defined in section 671-1, shall commence within three years
after the date of injury or one year after the plaintiff discovers, or through
the use of reasonable diligence should have discovered, the injury, whichever
occurs first. In no event shall the time for commencement of legal action
exceed three years unless tolled for any of the following: (1) upon proof of
fraud, (2) upon proof of intentional concealment, or (3) upon discovery of the
presence of a foreign body, which has no therapeutic or diagnostic purpose or
effect, in the person of the injured person. Actions by a minor shall be
commenced within three years from the date of the alleged wrongful act, except
that actions by a minor under the full age of six years shall be commenced within
three years or prior to the eighth birthday of the minor, whichever provides a
longer period. Such time limitation shall be tolled for minors for any
period during which a parent or guardian and defendant's insurer or health care
provider have committed fraud or collusion in the failure to bring an action on
behalf of the injured minor for professional negligence."
SECTION 5. Section 671-1, Hawaii Revised Statutes, is amended to read as follows:
"§671-1 Definitions. As used in this chapter:
(1) "Health care provider" means a physician or surgeon licensed under chapter 453, a physician and surgeon licensed under chapter 460, a podiatrist licensed under chapter 463E, a health care facility as defined in section 323D-2, a chiropractor licensed under chapter 442, a dentist licensed under chapter 448, a dental hygienist licensed under chapter 447, an acupuncture practitioner licensed under chapter 436E, a massage therapist licensed under chapter 452, a nurse licensed under chapter 457, an occupational therapist licensed under chapter 457G, an optometrist licensed under chapter 459, a pharmacist licensed under chapter 461, a physical therapist licensed under chapter 461J, a psychologist licensed under chapter 465, a marriage and family therapist licensed under chapter 451J, a dietitian licensed under chapter 448B, a radiologic technologist licensed under chapter 466J, a speech pathologist or audiologist licensed under chapter 468E, a veterinarian licensed under chapter 471, and the employees of any of them. Health care provider shall not mean any nursing institution or nursing service conducted by and for those who rely upon treatment by spiritual means through prayer alone, or employees of such institution or service.
(2) "Medical tort" means [
negligence, the rendering of professional service without informed consent, or
an error or omission in professional practice, by a health care provider, which
proximately causes death, injury, or other damage to a patient.] a
negligent act or omission to act by a health care provider in the rendering of
professional services, or the rendering of professional services by a health
care provider without informed consent, which act or omission or rendering of
service without informed consent is the proximate cause of a personal injury or
wrongful death, provided that such services are within the scope of services
for which the provider is licensed and which are not within any restriction
imposed by the licensing agency or licensed hospital."
PART II. JOINT AND SEVERAL LIABILITY
SECTION 6. The legislature believes that the present system of joint and several liability is unfair and inequitable in that a person with only one per cent of fault can become liable for one hundred per cent of the damages. Even if the plaintiff was partially to blame, a person with only one per cent of fault could have to pay nearly all of the damages. Joint and several liability has led to a search for "deep pockets," or governments, large companies, and other insured persons and entities, who must bear the greatest burdens of liability even if their involvement is minimal.
The legislature finds that the fairest solution is to abolish joint and several liability. This Act clarifies that each joint tortfeasor may be held liable for no more than that percentage share of the damages attributable to that joint tortfeasor.
SECTION 7. Section 663-8.7, Hawaii Revised Statutes, is amended to read as follows:
Limitation on pain and suffering. Damages recoverable for pain and suffering
as defined in section 663-8.5 shall be limited to a maximum award of $375,000[ ;
provided that this limitation shall not apply to tort actions enumerated in
SECTION 8. Section 663-10.5, Hawaii Revised Statutes, is amended to read as follows:
entity as a tortfeasor; abolition of joint and
several liability. Any other law to the contrary
including but not limited to sections 663‑10.9, 663‑11
to 663‑13, 663‑16, 663‑17, and 663‑31,] in any case
where a government entity is determined to be a tortfeasor along with one or
more other tortfeasors, the government entity shall be liable for no more than
that percentage share of the damages attributable to the government entity[ ;
provided that joint and several liability shall be retained for tort claims
relating to the maintenance and design of highways pursuant to section 663-10.9].
For purposes of this section, "government entity" means any unit of government in this State, including the State and any county or combination of counties, department, agency, institution, board, commission, district, council, bureau, office, governing authority, or other instrumentality of state or county government, or corporation or other establishment owned, operated, or managed by or on behalf of this State or any county.
For purposes of this section, the liability of a government entity shall include its vicarious liability for the acts or omissions of its officers and employees."
SECTION 9. Section 663-10.9, Hawaii Revised Statutes, is amended to read as follows:
"§663-10.9 Abolition of joint and
; exceptions]. (a) Joint
and several liability for joint tortfeasors [ as defined in section 663-11]
is abolished [ except in the following circumstances: (1) For the recovery of economic damages
against joint tortfeasors in actions involving injury or death to persons; (2) For the recovery of economic and
noneconomic damages against joint tortfeasors in actions involving: (A) Intentional torts; (B) Torts relating to environmental
pollution; (C) Toxic and asbestos-related
torts; (D) Torts relating to aircraft
accidents; (E) Strict and products liability
torts; or (F) Torts relating to motor vehicle
accidents except as provided in paragraph (4); (3) For the recovery of noneconomic damages
in actions, other than those enumerated in paragraph (2), involving injury or
death to persons against those tortfeasors whose individual degree of
negligence is found to be twenty-five per cent or more under section 663-31.
Where a tortfeasor's degree of negligence is less than twenty-five per cent,
then the amount recoverable against that tortfeasor for noneconomic damages
shall be in direct proportion to the degree of negligence assigned; and (4) For recovery of noneconomic damages in
motor vehicle accidents involving tort actions relating to the maintenance and
design of highways including actions involving guardrails, utility poles,
street and directional signs, and any other highway-related device upon a
showing that the affected joint tortfeasor was given reasonable prior notice of
a prior occurrence under similar circumstances to the occurrence upon which the
tort claim is based. In actions in which the affected joint tortfeasor has not
been shown to have had such reasonable prior notice, the recovery of
noneconomic damages shall be as provided in paragraph (3). (5) Provided, however, that joint and
several liability for economic and noneconomic damages for claims against
design professionals, as defined in chapter 672, and certified public
accountants, as defined in chapter 466, is abolished in actions not involving
physical injury or death to persons].
(b) Each party shall be liable for:
(1) That party's share of any damages only, and not for the share of any other person; and
(2) The amount of damages allocated to that party in direct proportion to the party's percentage of responsibility.
(c) A separate judgment shall be rendered against each party for the amount allocated to that party. For the purposes of this section, the trier of fact shall determine the proportion of responsibility of each party for the claimant's harm."
SECTION 10. Section 663-11, Hawaii Revised Statutes, is amended to read as follows:
"§663-11 Joint tortfeasors defined.
For the purpose of this part, the term "joint tortfeasors"
means two or more persons [
jointly or severally] who are liable
in tort for the same injury to person or property, whether or not judgment has
been recovered against all or some of them."
SECTION 11. This Act shall apply only to causes of action based upon acts or omissions occurring on or after its effective date.
SECTION 12. This Act does not affect rights and duties that matured, penalties that were incurred, and proceedings that were begun, before its effective date.
SECTION 13. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.
SECTION 14. This Act shall take effect upon its approval.