Arkansas lawmakers back constitutional amendment limiting attorneys' fees

Lawmakers sign on; lawyers leery

More than half of the state House's members and nearly half the senators have signed up to support a proposed constitutional amendment that would limit attorneys' contingency fees and punitive damages.

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The proposal also would give the Legislature -- not the Arkansas Supreme Court -- the authority to set the rules of pleading, practice and procedure for all courts.

Supporters of changing the state's tort laws regarding medical lawsuits gathered enough signatures last year to have a proposal placed on the November general election ballot. But the Arkansas Supreme Court blocked a vote because of questions surrounding the canvassing process.

Proposed constitutional amendments can be placed on the ballot two ways -- either by citizen initiative or by the Legislature, in its biennial regular session, referring up to three proposals for the next general election.

The chief sponsor of Senate Joint Resolution 8, Missy Irvin, R-Mountain View, said Thursday that she filed the amendment to give Arkansas voters "the chance to decide whether our state needs stronger tort reform for businesses."

"Arkansas ranks 41st in the nation for our legal climate for businesses, which hinders our state's ability to compete with neighboring states for jobs," according to Irvin's news release.

"Arkansas is currently targeted by out-of-state attorneys seeking frivolously large rulings against our companies because we have softer tort reform laws than most of our neighboring states," Irvin's news release states.

But the Arkansas Trial Lawyers Association said in its news release that Irvin's proposed amendment "aims to take away Arkansans' ability to protect themselves and fight back against abusive corporate nursing homes, greedy insurance companies, and harmful corporate interests; handcuff local juries so that they can't hold those entities accountable; and place an arbitrary, one-size-fits-all value on life.

"And if those measures weren't harmful enough, the amendment hands our judiciary directly to lobbyists and special interests by giving the legislature full control over the courts," the association said.

The proposal would limit contingency fees for attorneys' legal representation in civil lawsuits to one-third of the net amount of recovery obtained through a settlement, arbitration or judgment. Under the amendment, the Legislature would enact laws to establish penalties for contingency fees that exceed the cap and define the term "net amount of the recovery" through a majority vote in the House and Senate. The resolution also would allow the House and Senate, by two-thirds vote, to enact laws changing the maximum percentage for contingency fees for legal representation.

The proposed amendment would limit punitive damage awards for each claimant to $250,000 or three times the amount of compensatory damages awarded to the claimant, but the limits wouldn't apply under certain circumstances. The Legislature may enact laws increasing these limits with a two-thirds vote of the House and the Senate under the proposal.

The proposal also would limit noneconomic damages -- damages that can't be measured in terms of money -- to $250,000 for each claimant and $500,000 for all beneficiaries of an individual decedent in total for injuries resulting in death. The Legislature may enact laws increasing these limits with a two-thirds vote of the House and the Senate under the proposal.

By a majority vote of the House and Senate, the 2019 Legislature would be required to enact laws adopting a procedure to adjust the limits for punitive damage awards and noneconomic damages for inflation or deflation in future years under the proposed amendment. With a two-thirds vote of the House and the Senate, the Legislature starting in 2021 may enact laws changing that procedure.

The proposed amendment also would make the state Supreme Court's rules of pleading, practice and procedure for all courts "subject to approval by the General Assembly under this section." With a three-fifths vote of the House and Senate, the Legislature may enact laws approving, changing or repealing a rule of pleading, practice or procedure prescribed by the Supreme Court and adopt on its own initiative a rule of pleading, practice or procedure.

Beyond Irvin, the sponsor of the proposed amendment, it is co-sponsored by 14 other senators. The Senate has 35 members.

Five senators on the eight-member Senate State Agencies and Governmental Affairs Committee, which recommends the proposed amendments the Senate considers, are either a sponsor or co-sponsor of the measure.

In the 100-member House, the proposed amendment has 53 co-sponsors, including 13 members of the 20-member House State Agencies and Governmental Affairs Committee, which recommends proposed amendments to the House.

Senate President Pro Tempore Jonathan Dismang, R-Searcy, one of the co-sponsors, said Friday that it's not guaranteed that the Legislature will refer the proposal to voters.

Lawmakers will have to work through the process of deciding which amendments to refer to voters in the November 2018 general election, he said.

Thus far, SJR8 has the support of the Arkansas State Chamber of Commerce/Associated Industries of Arkansas, Poultry Federation, Arkansas Farm Bureau, Arkansas Trucking Association, Arkansas Farm Bureau, Arkansas Grocers and Retail Merchants Association, Arkansas Hospital Association, Arkansas Medical Society, Arkansas Health Care Association and Arkansas Osteopathic Medicine Association, said Randy Zook, president and chief executive officer for the Arkansas State Chamber of Commerce/Associated Industries of Arkansas.

Metro on 02/05/2017

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