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May, 28, 2009

Wisconsin Tort Reforms Endangered

By Amy C. KjoseGene Ellwood was driving his wife and her

four sons in his compact car, and missed a stopsign and the rumble strips in the pavement onlyto head directly into the path of a bus poised todrive through the intersection. Unfortunately, thevehicles collided, killing Mrs. Ellwoods son andputting her into a coma.

The 1991 accident was clearly caused byMr. Ellwoods disregard of the signs in theintersection. However, his insurance policy wasinsufficient even to cover Mrs. Ellwoods

healthcare costs. Thus, negotiations based onWisconsins draconian liability laws at the time of this accident resulted in the insurer of the buscompany, whose driver respected the trafficlaws, paying $1.9 million compared to Mr.Ellwoods insurer paying $100,000.

Mrs. Ellwoods attorneys argued thatbecause the bus driver did not slam on hisbrakes or swerve to avoid the car, he and thebus company were partially at fault. This mightseem outrageous, but under Wisconsins laws atthe time, a defendant only minimally at faultcould be held responsible for all of the damages.The bus companys insurers had the deepestpockets and could therefore pay the mostmoney.

Under Wisconsins laws prior to 1995, suchsettlements were not unordinary. Fortunately, in1995, the Wisconsin legislature enacted reformsto help ensure that the states legal system onlypunishes defendants for that which is their fault.

The legislature, however, is now trying toreturn to the arcane laws that punished the buscompany in the above case. Via a provisionsnuck into the state budget - of all places - thelegislative majority is attempting to eliminate theexisting statute articulating that only thosedefendants responsible for more than half of thetotal liability could potentially be responsible for paying the entire bill. Under the legislaturesnewest compromise, a defendant 21 percentresponsible for the damage could cover theentire award, unfairly punishing thosebusinesses with the deepest pockets.

This might seem like a complicated legalissue that wont affect most Wisconsinites. Thetruth is that this legislation could seriously risk

jobs located in the state.In the midst of a national recession,

Wisconsin legislators should not impose unfair costs on Wisconsin businesses. A companysbottom line could be so negatively affected thatit may no longer be able to afford the cost of doing business in Wisconsin. Businesses, alongwith the jobs and revenue they supply to the

state, could easily relocate to Minnesota whoseliability laws would be much more favorable incomparison to the proposed rule change. In fact,the change suggested by Wisconsin legislatorswould render Wisconsins liability laws the worstof its neighboring states and among the worst inthe nation.

Lawmakers should be slow to consider enacting such legislation that inflicts businesseswith additional costs in this dire economicenvironment. At the very least, one would hopethat Wisconsin legislators wouldnt use slytactics to change the law without public inputand consideration. In 1995, the policy changewas given adequate discussion time. Hearingswere held, benefits and concerns wereconsidered, and the legislature decided to passa fair-minded reform. As a part of the statebudget, such deliberations would not take place.

The ramifications of such a policy changeare so intertwined with the lives of allWisconsinites that to overturn this policy in abudget proposal without proper hearings andconsiderations would be short-sighted.

It is time for the legislature to slam its brakesbefore it unfairly penalizes its businesses andcitizens.

Amy C. Kjose is the Director of the Civil JusticeTask Force at the American LegislativeExchange Council, the nations largest nonprofit,nonpartisan membership organization of statelegislators.