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Collateral source set to mark start of tort reform effort

  

JEFFERSON CITY, Mo. – With labor and ethics reform making up the majority of the General Assembly’s first two weeks in session, a few other bills at the top of Republican leadership’s docket may not have grabbed as much attention. However, they could be just as impactful for the state’s business community.

Last week, the Senate Government Reform Committee heard testimony on Sen. Ed Emery’s collateral source rule change bill, which would have parties in injury cases present the actual cost of medical care, instead of its value when calculating the damages owed by a defendant.

Currently, in a worker’s compensation case, if an assembly line worker gets injured on the line because of a faulty mechanism, the company she works for could pay for her injuries using their medical insurance. But she could also sue the company for negligence and get more money based on the “value” of her injuries as determined by a judge.

Emery
Emery

Under Emery’s proposed rule, the specific monetary amount granted for her injuries would be what she receives.

“It allows businesses who are always subject to personal injury lawsuits, to more effectively quantify what their exposure is,” Emery says. “If a defendant is found liable, we know what the medical costs are and we know they’re reimbursed. The question is, is there exposure beyond that? And collateral source says there’s not.”

Brian Bunten, the general counsel for the Missouri Chamber of Commerce says the bill primarily helps businesses ensure they do not pay the injured persons suing them any more than what their insurance companies dictate. In turn, that fact alone could make the state more appealing to businesses and help shed Missouri of its status as a “judicial hellhole” for the business community.

“Plaintiffs can make money bringing suits for injuries that may already be covered by other sources or claim phantom damages – a cost they never incurred,” Bunten said at the bill’s hearing. “Our courts were intended to be a place where injured parties go to be made whole for real losses. Allowing people to use inflated damages to collect a windfall on an injury is unfair and unjust.”

Emery added the bill will lead to lower insurance rates as it will lead to more quantifiable risk for businesses.

The committee will vote on SB 31 in an executive session Wednesday, and Emery is confident that the bill will go into law this year. After it was vetoed last year by former Gov. Jay Nixon, it was one of two major tort reform bills to not make it across the finish line in veto session. While the Senate overrode Nixon’s veto, it did not get taken up in the House.

With Republican Gov. Eric Greitens in the Governor’s Mansion, the sky has effectively become the limit for the supermajority Republican Legislature on a wide range of issues, including tort reform.

“I think we’re in excellent shape to see it passed and signed into law,” Emery says. “We’ve already been through the compromise and working on the language, it’s in the same form it was in last year.”

The House has also even formed the Special Committee on Litigation Reform, chaired by Rep. Bill Lant, to discuss legislation like collateral source as well as the Daubert expert witness standards bill. Rep. Joe Don McGaugh has sponsored the House version of the bill. A hearing is scheduled for McGaugh’s bill and the expert witness bill Tuesday.

Speaker Todd Richardson said he wanted them on the floor as soon as possible.

“I’ve talked to the chairman of that committee and asked him to move with haste on both of those bills,” Richardson said Thursday. “You’ll see them very early in session.”

Democratic opposition to the bill has been notable in the past. In last year’s debate over the bill in the Senate, Democrats launched a 13-hour filibuster led by Sen. Scott Sifton, D-St. Louis, lasting through the night before it eventually passed.

“We wanted to make sure that we protected accident victims to the greatest extent possible,” Sifton said after the filibuster. “Some of the folks that are impacted by this bill have lost the use of multiple limbs. Many of them can’t walk and many of them are going to be incurring medical expenses as a result of their accident for decades to come.”

This year, Democrats have little power to stop the bill. House Minority Leader Gail McCann-Beatty said they would try to “make it as painless as possible.”

“We do know it’s coming… but we will try to do what’s best,” she said. “Our concern is that the courts are available to all people and not just those that can afford high-dollar lawyers.”