Generally amends state tort law.
HOUSE OF REPRESENTATIVES
TWENTY-FIRST LEGISLATURE, 2001
STATE OF HAWAII
A BILL FOR AN ACT
relating to civil liability.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:
SECTION 1. The legislature finds that Hawaii's civil justice system must be reformed to increase the fairness and equity that has been eroded over the years through lawsuit abuse, unpredictability, and liability for the fault of others. Studies of civil justice systems throughout the nation abound, and opponents to reform caution against any action until we have the results of the definitive study, an approach that will produce nothing but futility. From the morass of studies, we have lost sight of the fundamental fairness and equity guaranteed by our constitutions and richly deserved by our people.
The legislature further finds that only by reforming Hawaii's tort system can we recapture this fairness and equity by providing victims with what they deserve in a cost-effective expeditious manner, while preserving the rights to due process for every one of our citizens.
The purpose of this Act is to correct the most serious problems with Hawaii's system of civil justice by minimizing the costs of frivolous lawsuits, holding every wrongdoer liable to the extent that the wrongdoer is at fault, and establishing clear guidelines for providing full compensation to victims. This is not only what we are obligated to provide to our citizens but is also vital to the survival of our economy in terms of retaining and attracting businesses and enhancing employment opportunities.
SECTION 2. Chapter 663, Hawaii Revised Statutes, is amended by adding two new sections to be appropriately designated and to read as follows:
"§663- Damage awards. (a) In any tort action, compensation may be awarded to the prevailing plaintiff for economic and noneconomic damages that are actually suffered by the injured plaintiff as the proximate result of the defendant's wrongful conduct.
(b) Economic damages which are recoverable in tort actions are damages that can be objectively determined in monetary terms and include, but are not limited to, the costs of:
(1) Medical, rehabilitative, and custodial treatment and care;
(2) Loss of income;
(4) Loss of use of property; and
(5) Repair or replacement of property.
In all tort cases where damages are awarded for loss or impairment of earning capacity, the amount of probable future earnings shall be determined by taking into account the effect of probable taxes. Nothing in this section shall be construed to limit or restrict the use of other factors deemed appropriate by a court in calculating damages awarded for loss or impairment of earning capacity.
(c) Noneconomic damages which are recoverable in tort actions are subjective, cannot be objectively determined in monetary terms, and include damages for:
(1) Pain and suffering;
(2) Mental anguish;
(4) Loss of enjoyment of life; and
(5) Loss of consortium.
Compensation for noneconomic damages actually suffered by the injured plaintiff shall not exceed $250,000 or the amount of compensation awarded for economic damages, whichever is greater.
(d) No party shall be liable for the negligent infliction of serious emotional distress or disturbance if the distress or disturbance arises solely out of damage to property or material objects unless the serious emotional distress or disturbance results in physical injury to or mental illness of the person who experiences the emotional distress or disturbance.
§663- Punitive damages. (a) Punitive damages are an extraordinary remedy intended to punish a defendant and deter future misconduct. Notwithstanding any other statutory provision, punitive damages shall be awarded against the defendant only where compensatory damages are awarded and the plaintiff proves by clear and convincing evidence that the plaintiff's injuries are the proximate result of the defendant acting with reckless disregard for the plaintiff's well-being or with the intent to cause injury to the plaintiff.
(b) Upon finding by the trier of fact that punitive damages may be awarded, the court shall determine the amount based on the following considerations:
(1) Reasonable relationship between the amount and the harm that has resulted and may result from the defendant's wrongful conduct;
(2) Duration and degree of reprehensibility of the defendant's wrongful conduct;
(3) Profit that has been or will be derived as a result of the defendant's wrongful conduct; and
(4) Financial condition of defendant.
Punitive damages shall not be sought or awarded in an amount that exceeds $250,000 or the amount of compensatory damages, whichever is greater.
(c) Punitive damages shall not be sought or awarded in a civil action based on the same wrongful conduct for which punitive damages were awarded in a previous action unless new and substantial evidence justifies an additional award of punitive damages. A court permitting an award of punitive damages pursuant to this paragraph shall:
(1) Make specific findings of fact on the record to support the claim for punitive damages;
(2) Reduce the amount of punitive damages by the sum of all punitive damages previously awarded in any state or federal court in any jurisdiction; and
(3) Prohibit disclosure to the jury of the court's determination and action pursuant to this subsection."
SECTION 3. Section 663-1.4, Hawaii Revised Statutes, is amended to read as follows:
"[§663-1.4] Payment of reasonable attorney's fees and costs in defense of suit. In any case [
brought by one health care professional against another for defamation, damage to reputation, or any other loss resulting from information provided by the second health care professional in any situation relating to a medical peer review proceeding, including the providing of information that may lead to the initiation of such a proceeding, if the second health care professional] where the defendant substantially prevails in the action[ ,] and [ if] the action [ brought by the first health care professional was] is frivolous, unreasonable, without foundation, or in bad faith, [ then] with respect to that defendant, the court, at the conclusion of the action, shall award to the [ second health care professional] defendant the cost of defending against the action, including a reasonable attorney's fee."
SECTION 4. Section 663-8, Hawaii Revised Statutes, is amended by amending the title to read as follows:
Damages, future] Future earnings."
SECTION 5. Section 663-10, Hawaii Revised Statutes, is amended to read as follows:
Collateral sources;] Elimination of multiple recoveries; protection for liens and rights of subrogation. (a) In any civil action in tort, the court[ , before] shall allow the admission into evidence of proof of collateral source payments that have already been made or that are substantially certain to be made to the plaintiff as compensation for the same damages sought in the suit. Proof of these payments shall be considered by the trier of fact in arriving at the amount of any award and shall be considered by the court in reviewing awards made for excessiveness. The trier of fact shall be informed of the tax implications of all damage awards and may hear evidence of the premiums and expenses personally incurred by the plaintiff to obtain any collateral sources paid or payable.
(b) Before any judgment or stipulation to dismiss the action is approved, the court shall determine the validity of any claim of a lien against the amount of the judgment or settlement by any person who files timely notice of the claim to the court or to the parties in the action. The judgment entered, or the order subsequent to settlement, shall include a statement of the amounts, if any, due and owing to any person determined by the court to be a holder of a valid lien and to be paid to the lienholder out of the amount of the corresponding special damages recovered by the judgment or settlement. In determining the payment due the lienholder, the court shall deduct from the payment a reasonable sum for the costs and fees incurred by the party who brought the civil action in tort. As used in this section, lien means a lien arising out of a claim for payments made or indemnified from collateral sources, including health insurance or benefits, for costs and expenses arising out of the injury which is the subject of the civil action in tort. If there is a settlement before suit is filed or there is no civil action pending, then any party may petition a court of competent jurisdiction for a determination of the validity and amount of any claim of a lien."
SECTION 6. Section 663-11, Hawaii Revised Statutes, is amended to read as follows:
"§663-11 Joint tortfeasors defined[
.]; joint and several liability, when applicable. (a) For the purpose of this part the term "joint tortfeasors" means two or more persons jointly or severally liable in tort for the same injury to person or property, whether or not judgment has been recovered against all or some of them.
(b) Notwithstanding any other provision, joint and several liability shall apply to a joint tortfeasor only where:
(1) The plaintiff's injuries are the proximate result of the tortfeasor acting in concert with one or more other tortfeasors either with reckless disregard for the plaintiff's well-being or with the intent to cause injury to the plaintiff; or
(2) The wrongful conduct of the tortfeasor proximately results in serious bodily injury or death to the plaintiff, for which the tortfeasor's wrongful conduct is at least twenty-five percent responsible.
With respect to all other tortfeasors, each tortfeasor shall be liable for no more than that percentage share of the damages attributable to the tortfeasor's wrongful conduct as determined in a special verdict by the trier of fact.
As used in this subsection, "serious bodily injury" means the permanent loss of a significant part or function of the body.
SECTION 7. Section 663-8.3, Hawaii Revised Statutes, is repealed.
[§663-8.3] Loss or impairment of earning capacity; damages. (a) In all tort cases where damages are awarded for loss or impairment of earning capacity, the amount of probable future earnings shall be determined by taking into account the effect of probable taxes. (b) Nothing in this section shall be construed to limit or restrict the use of other factors deemed appropriate by a court in calculating damages awarded for loss or impairment of earning capacity. "]
SECTION 8. Section 663-8.5, Hawaii Revised Statutes, is repealed.
[§663-8.5] Noneconomic damages; defined. (a) Noneconomic damages which are recoverable in tort actions include damages for pain and suffering, mental anguish, disfigurement, loss of enjoyment of life, loss of consortium, and all other nonpecuniary losses or claims. (b) Pain and suffering is one type of noneconomic damage and means the actual physical pain and suffering that is the proximate result of a physical injury sustained by a person."]
SECTION 9. Section 663-8.7, Hawaii Revised Statutes, is repealed.
[§663-8.7] Limitation on pain and suffering. [Repeal of section on October 1, 1995, by L 1993, c 238, §1 deleted by L 1995, c 130, §1.] 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 663-10.9(2)."]
SECTION 10. Section 663-8.9, Hawaii Revised Statutes, is repealed.
[§663-8.9] Serious emotional distress arising from property damage; cause of action abolished; exception for physical injury. (a) No party shall be liable for the negligent infliction of serious emotional distress or disturbance if the distress or disturbance arises solely out of damage to property or material objects. (b) This section shall not apply if the serious emotional distress or disturbance results in physical injury to or mental illness of the person who experiences the emotional distress or disturbance."]
SECTION 11. Section 663-10.5, Hawaii Revised Statutes, is repealed.
[§663-10.5] Government entity as a tortfeasor; abolition of joint and several liability. Notwithstanding the provisions of sections 663-11 to 663-17 and section 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. 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 12. Section 663-10.9, Hawaii Revised Statutes, is repealed.
§663-10.9 Abolition of joint and several liability; exceptions. [Repeal of section on October 1, 1995, by L 1993, c 238, §1 deleted by L 1995, c 130, §1.] 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."]
SECTION 13. If any provision of this Act, or the application thereof to any person or circumstance is held invalid, the invalidity does not affect other provisions or applications of the Act, which can be given effect without the invalid provision or application, and to this end the provisions of this Act are severable.
SECTION 14. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.
SECTION 15. This Act shall take effect upon its approval.