1 TORT REFORM UPDATE JUNE 25, 2004 Robert W. Kerpsack, Esq. ROBERT W. KERPSACK CO., L.P.A. 21 East State Street, Suite 300 Columbus, OH 43215 Telephone:

1

TORT REFORM UPDATEJUNE 25, 2004

Robert W. Kerpsack, Esq.ROBERT W. KERPSACK CO., L.P.A.

21 East State Street, Suite 300Columbus, OH 43215

Telephone: (614) 242-1000Facsimile: (614) 242-4180

Email: [email protected]

2

TORT REFORM UPDATE TOPICS:• S.B. 281 – MEDICAL MALPRACTICE LIABILITY

• H.B. 412 – NURSING HOME LIABILITY

• S.B. 179 – HOSP. LIAB./PHYSICIAN CREDENTIALING

• S.B. 227 – WORKERS’ COMP. SUBROGATION

• H.B. 51 – SAVINGS STATUTE/CIV. R. 41 DISMISSAL

• H.B. 212 – PREJUDGMENT INTEREST

• PENDING TORT REFORM LEGISLATION

3

MED MAL REFORM• S.B. 281 HIGHLIGHTS:

– Effective April 10, 2003– Caps on noneconomic damages– Limits on future damages– 4-year statute of repose– “Good faith” motions– Non-subrogated collateral sources admissible– Clerk’s annual med mal report

4

MED MAL REFORM CAPS ON NONECONOMIC DAMAGES

• LIMITS ON “CATASTROPHIC” INJURIES:• $500,000 each plaintiff/$1M each occurrence

__________________________________“CATASTROPHIC” means:

Permanent and substantial physical deformity, loss of use of a limb, or loss of a bodily organ system;

orPermanent physical functional injury that permanently prevents the injured person from being able to independently care for self and perform life-sustaining activities.

5

MED MAL REFORMCAPS ON NONECONOMIC DAMAGES (con’t)

• NOTE:

Prior to trial, any party may seek summary judgment on the issue of whether the claimed injury or loss is “catastrophic.”

6


NON-CATASTROPHIC INJURIES:The greater of:

• $250,000, or • 3 x amount of Economic Loss

– Up to a maximum of:$350,000 each plaintiff/$500,000 each occurrence

7


• SPECIAL JURY INTERROGATORIES REQUIRED:– General verdict in favor of Plaintiff must be accompanied

by answers to interrogatories specifying:1) Total compensatory damages;2) Portion of total compensatory damages that represents damages for economic loss;

and3) Portion of total compensatory damages that represents damages for non-economic

loss.

8


• NO JUDICIAL DISCRETION:– R.C. 2323.43(D)(1) provides that a trial court “has

no jurisdiction” to award noneconomic damages in excess of the imposed caps.

– R.C. 2323.43(D)(2) provides that the jury shall not be informed of the noneconomic loss caps.

– R.C. 2323.43(E) provides that noneconomic damages awarded in excess of the caps shall not be reallocated to any other tortfeasor(s).

9


• R.C. 2323.43’s caps on noneconomic damages not applicable to:

1) Wrongful death claims; and

2) Claims against the State of Ohio.

10

MED MAL REFORMLIMITS ON FUTURE DAMAGES

• R.C. 2323.55’s discretionary order of a series of periodic payments on future damages is applicable to:

– “Future Damages” in excess of $50,000

• Total “future damages” for both economic and noneconomic losses

11

MED MAL REFORMLIMITS ON FUTURE DAMAGES (con’t)

• SPECIAL JURY INTERROGATORIES REQUIRED:– General verdict in favor of Plaintiff must be

accompanied by answers to interrogatories specifying:

1) Total “past” compensatory damages; and

2) Total “future” compensatory damages.

12


• BEFORE JUDGMENT IS ENTERED on a verdict including future damages in excess of $50,000:– Any party may file a motion for a hearing re:

• Whether any or all of the future damages will be received in a series of periodic payments.

– If a “periodic payment” motion is timely filed, then court must schedule a hearing.

13


• FACTORS for Court to consider in exercising discretion whether to order periodic payments of future damages:

– Purposes for which future damages awarded;– Business or occupational experience of Plaintiff;– Plaintiff’s age;– Plaintiff’s physical and mental condition; – Competency of Plaintiff, parent, guardian, or

custodian to manage the future damages ; and– Any other relevant circumstances.

14


• PERIODIC PAYMENT PLAN:– Within 20 days of court’s order that future damages are to

be paid in a series of periodic payments, the plaintiff must submit a periodic payment plan.

– A periodic payment plan approved by the court must include adequate security to insure the future payments.

– Periodic payment plans shall include post-judgment interest, in accordance with R.C. 1343.03 (currently 7%)

15


• R.C. 2323.55’s discretionary periodic payment plan for future damages is NOT APPLICABLE to civil claims against:

1) Political subdivisions; and/or

2) State of Ohio.

16

MED MAL REFORM4-YEAR STATUTE OF REPOSE

• S.B. 281 ADDS R.C. 2305.113, which reinstitutes an absolute four-year statute of repose on med mal claims.– Only three (3) exceptions:

1) Minors or persons of unsound mind2) Discovery

• One year from injury discovered within 3 to 4 years • Injury discovered after 4 years is time-barred

3) Foreign objects• 1 year after discovery of foreign object

17

MED MAL REFORM4-YEAR STATUTE OF REPOSE (con’t)

• S.B. 281 RETAINS 1-year SOL and 180-day notice provision for extending the SOL on medical claims.

– NOTE: S.B. 281 prohibits a med mal insurance company from considering the receipt of a 180-day notice letter as a factor in establishing liability insurance premium rates.

18

MED MAL REFORM“REASONABLE GOOD FAITH BASIS”

• S.B. 281 ADDS R.C. 2323.42, which includes requirement of “reasonable good faith basis” for bringing med mal claim.– Med Mal defendant may serve Plaintiff with a “Notice of

Demand for Dismissal and Intention to File a Good Faith Motion.”

– If Plaintiff does not dismiss Defendant within 14 days, then Defendant may file a “good faith” motion, contending that Plaintiff lacked a reasonable good faith basis for bring the action.• Good faith motion may be filed between close of

discovery and 30 days after verdict.

19

MED MAL REFORM“REASONABLE GOOD FAITH BASIS” (con’t)

• COURT must conduct a hearing on “good faith” motions• Factors for court to consider in deciding “good faith” motion:

– Whether Plaintiff obtained timely review by qualified expert;

– Whether Plaintiff conducted pre-suit investigation or was afforded full, timely discovery during litigation;

– Whether Plaintiff reasonably relied on evidence; and– Whether Plaintiff “timely” dismissed Defendant upon

learning that no good faith basis existed for claim.

20

MED MAL REFORM“REASONABLE GOOD FAITH BASIS” (con’t)

• IF COURT DETERMINES:– “No reasonable good faith basis” for asserting

or continuing to assert a med mal claim:

• The moving defendant is entitled to court costs and reasonable attorneys’ fees incurred in the defense of the med mal claim and in asserting the “good faith” motion.

21

MED MAL REFORMCOLLATERAL SOURCES OF RECOVERY

• S.B. 281 ADDS R.C. 2323.41, which permits med mal defendants to introduce evidence to the jury of a plaintiff’s non-subrogated/reimbursable collateral sources of recovery.

• If evidence of a collateral source of recovery is admitted, then a plaintiff may introduce evidence of the cost (i.e. premium amount) of the collateral source.

22

MED MAL REFORMCLERK’S ANNUAL MED MAL REPORT

• S.B. 281 ADDS R.C. 2303.23, which requires the Clerk of every Court of Common Pleas to file an annual med mal report with the Ohio Department of Insurance.

– Clerk’s report must provide detailed info re: pending med mal claims (i.e. case number, filing date, trial date, current status, settlement, judgment, and appeal).

– $5.00 is to be added to the filing fees for medical claims to offset the costs associated with the required reporting.

23

NURSING HOME LIAB. REFORM• H.B. 412 HIGHLIGHTS:

– Effective November 8, 2002 – Same SOL applicable to med mal claims– Punitive damages: Financial ability of nursing home to

stay in business is relevant evidence– Results of official inspections, investigations, and

surveys not admissible in civil actions against the home – Attorney fees may be awarded for injunctive relief, but

not for damages– If Ohio Department of Job and Family Services must

receive written notice of resident’s civil action if it is paying the care and treatment bills

24

NURSING HOME LIAB. REFORMRESIDENTS’ “RIGHTS”

• Nursing Home Residents’ Rights Act--R.C. 3721.13, et seq.

– The “rights” of nursing home residents are delineated in the 32 subsections of R.C. 3721.13(A)• Civil liability can arise under (A)(3): Right to

adequate and appropriate medical treatment and nursing care. . .”

– A nursing home’s violation of R.C. 3721.13(A)(3) probably constitutes negligence per se.

25

NURSING HOME LIAB. REFORMONE-YEAR SOL

• H.B. 412 EXPANDS R.C. 2305.11(D)(3)’S definition of a “medical claim” to include claims for a violation of residents’ rights against a “home” or residential facility.

– Same one-year med mal SOL (and 180-day notice extension) is attributable to claims alleging a violation of nursing home residents’ “rights.”

• Exception: Wrongful death claims are still subject to the two-year SOL set forth in R.C. 2125.02(D).

26

NURSING HOME LIAB. REFORMPUNITIVE DAMAGES

• H.B. 412 ADDS 2315.21(E)(1) – (3):

– Punitive damages are still recoverable for a violation of a nursing home resident’s rights.

– But, the jury must consider the following FACTORS in determining whether to award punitive damages:

1) Nursing home’s assets, income and net worth;2) Whether the punitive damages will deter future tortuous conduct; and3) The financial ability of the nursing home to remain in business.

27

NURSING HOME LIAB. REFORMADMINISTRATIVE “VIOLATIONS”

• H.B. 412 ADDS R.C. 3721.02(E)(1) and 5111.411:

– Official “findings” of a nursing home’s violations of state and federal regulatory statutes are not admissible in civil actions against the home for alleged violations of a resident’s rights.

28

NURSING HOME LIAB. REFORMRESIDENTS’ REMEDIES

• H.B. 412 ADDS/AMENDS R.C. 3721.17(I)(2)(a) and (c):

• Both injunctive relief and compensatory damages are available for a violation of a resident’s rights.

• However, attorneys fees may be awarded only for injunctive relief imposed.

– Prior law: Permitted attorneys’ fees to be awarded “to the prevailing party.”

29

HOSPITAL LIABILITY REFORM(NEGLIGENT PHYSICIAN CREDENTIALING)

• S.B. 179 HIGHLIGHTS:

– Effective April 9, 2003

– Establishes a rebuttable presumption: Hospital not negligent in extending hospital privileges to a physician

– Establishes confidentiality and inadmissibility of peer review committee proceedings and risk management reports

30

HOSPITAL LIABILITY REFORM (con’t)(NEGLIGENT PHYSICIAN CREDENTIALING)

• JOINT COMMISSION ON ACCREDITATION OF HEALTHCARE ORGANIZATIONS (“JCAHO”):

– Establishes national hospital quality “standards.”

• JCAHO accreditation teams conduct on-site “reviews” of a hospital “practices” at least once every 3 years.

31


• JCAHO “STANDARDS” REQUIRE: Hospitals to form PEER REVIEW COMMITTEES to investigate the “credentials” of physicians applying (or re-applying) for hospital privileges.

• S.B. 179 AMENDS R.C. 2305.251(B)(1) to create a rebuttable presumption that JCAHO-accredited hospitals are not negligent in credentialing and granting of privileges to physicians.

– However, JCAHO’s accreditation process does not specifically include a review of the “competency” of the doctors with hospital privileges.

32


• S.B. 179 ADDS/AMENDS R.C. 2305.252:– Prohibits the discovery/introduction of any evidence

(records or testimony) flowing from a hospital’s peer review committee.

• S.B. 179 ADDS R.C. 2305.253:– Prohibit the discovery/introduction of any evidence

(reports or testimony) flowing from a hospital’s risk management office.

33

WORKERS’ COMP. SUBRO. REFORM

• S.B. 227 HIGHLIGHTS:– Effective April 9, 2003 – Establishes “pro-rata sharing” of limited tort recoveries– Establishes an option to establish an interest-bearing trust

for future estimated future subrogated workers’ compensation benefits

– Requires the Ohio Attorney General to be notified of potential tort claims

– Specifies that workers’ comp. benefits are subrogated against employer intentional tort claims.

34

SAVINGS STATUTE REFORM

• H.B. 161 MODIFIES R.C. 2305.19(A) (“Savings Statute”)– Effective June 1, 2004

– A plaintiff may re-file a claim one year after a dismissal (“failure otherwise than upon the merits”) or within the period of the original statute of limitations, whichever occurs later.

– Cures the legal malpractice “trap” of filing a Civ. R. 41 dismissal before the statute of limitations had run on a civil cause of action.

35

PRE/POST-JUDGMENT INTEREST REFORM• H.B. 212 AMENDS R.C. 1343.03(A)—(D)

– Effective June 2, 2004– Rate of Interest (if not specified): “federal short-term rate,” as

determined by the Ohio Tax Commissioner on Oct. 15 of each year (currently 4%) + 3% = 7 %

• Date from which pre-judgment interest is due:– Contract claims: Date money became “due and payable”– Tort claims: Admitted liab.—Date “accrued”

Contested liab.—Longer of the following:1) Date of written notice of claim (in person or by certified mail);

or 2) Date of filing of Complaint

• No pre/post judgment interest on future tort damages

36

MORE MED MAL REFORM PENDING• H.B. 215 — Signed by Gov. 6/14/04 — Effective 9/13/04

• Provides that statements of apology/sympathy by med mal defendant are not admissions of liability

• Provides that out-of-state medical experts are “temporarily licensed” and subject to the authority of State Med. Board

• Provides “procedure” for motions for dismissal due to “non-involvement”

• “Requests” OH Sup. Ct. to amend the Rules of Civil Procedure to require med mal Plaintiffs to file “certificates” signed by a medical expert confirming the merits of the med mal claim(s).

Documents

1 TORT REFORM UPDATE JUNE 25, 2004 Robert W. Kerpsack, Esq. ROBERT W. KERPSACK CO., L.P.A. 21 East State Street, Suite 300 Columbus, OH 43215 Telephone: