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Caps on damages sought

Caps on damages sought

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PHOENIX -- Two state legislators want changes to sections of the Arizona Constitution that govern how much businesses and individuals have to pay -- and to whom -- when a jury finds they're liable for killing or injuring someone.

But their approaches are radically different. And, given that both require voter approval, that difference could determine which one ultimately succeeds.

At the center of both proposals are constitutional provisions that, in essence, bar the Legislature from imposing limits on the right to sue for injuries or death or the amount that can be awarded. Those two have stood between efforts by those who get sued to put a cap on both punitive damages as well as compensation for non-economic damages like pain and suffering.

Rep. Jack Harper, R-Surprise, has the more far-reaching plan. He wants to ask voters to repeal both sections.

Harper said he wants Arizona to follow in the footsteps of Texas where lawmakers, unencumbered by a constitutional restriction, limited non-economic damages in malpractice cases to $250,000 against health care providers and $500,000 in the case of hospitals and other institutions.

"I think the voters can see that the tort reform measures that Texas has passed capping the jury awards is something that Arizona needs as well," he said.

"From what I've heard, doctors are flocking to Texas," Harper continued. "They want to be in a state where their liability for frivolous claims of medical malpractice are limited."

Harper acknowledged his proposal would not spell out where those limits would be set, instead giving lawmakers a blank check to set the caps anywhere they want. He does not see that as a problem.

"I think it is easier to uncuff the representatives of the people," Harper said. Anyway, he said a specific constitutional cap makes no sense, as future lawmakers might want to adjust that for inflation.

Harper's proposal, if it goes to the ballot and passes, would affect far more than malpractice cases. It also would let legislators limit what juries pay out to those injured in everything from product liability to environmental damage cases. But Harper said that should not deter voters from repealing the two sections, pointing out that Arizona is one of just a small handful of states that actually have such limits.

"I think the voters can recognize that because we were one of the last territories to become a state, our constitution had very anti-business provisions in it," he said. Harper said that extends beyond legal liability, pointing for example to the requirement that businesses pay property taxes annually not only on land and buildings but also on their equipment.

"I think our voters have come around to the idea that we need to make some amendments to our state constitution if we want to be competitive, retain doctors in the state, attract businesses," he said. "This is just one more thing we need to do."

That, however, remains to be seen.

Proponents of liability limits have tried at least three times to convince voters to alter the constitution.

Measures identical to what Harper wants were rejected in 1986 and 1994.

In 1990, lawmakers proposed a narrower exception to the provisions to allow for no-fault auto insurance, where individuals cannot sue those at fault for accidents but instead buy coverage to protect themselves. That, too, went down to defeat.

Rep. John Fillmore, R-Apache Junction, questions whether voters would see things any different in 2012. More to the point, he does not support removing the cap in a way that would shield those found guilty of wrongdoing from damages.

But he does believe that one change is necessary: He wants all punitive damages awarded to benefit education rather than the person who brought the lawsuit. And that, too, would require voter approval.

Also called exemplary damages, these are above and beyond any payment for actual losses or pain and suffering. Instead they are designed to punish the wrongdoer for some act beyond normal negligence and make an example of that individual or corporation to deter similar acts by others.

"I think there are some times where organizations or people act so over the board that there should be some sort of reprimand," Fillmore said. "Let's make it a win-win and put it to some use."

His proposal would require any punitive damages awarded to be deposited into a special education fund. The cash then would be earmarked "only for the purpose of educating pupils in grades kindergarten through 12."

That, however, raises a question of whether attorneys might be willing to pursue cases where the actual damages are relatively small but a plaintiff wants to make a point to ensure that a defendant is sufficiently punished to prevent repeats.

Lawyers frequently take on cases on a fee-contingent basis: They agree not to charge an up-front hourly fee in exchange for a percentage of the final verdict, often in the neighborhood of one third.

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