March 2, 2011 – Gov. Scott Walker signed a new tort bill into law on Jan. 27, 2011, only 23 days after it was first introduced. Most provisions of the bill will apply to actions filed on or after Feb. 1, 2011, and will influence the practice of lawyers prosecuting and defending tort cases in a number of ways.

Nursing home cases

The new legislation places a $750,000 limit on recovery for noneconomic damages in cases against a “long-term care provider,” defined as a nursing home, an adult family home, a residential care apartment complex, a community-based residential facility, a home health agency, or a hospice. These entities will benefit from the same limit on noneconomic damages that doctors and hospitals have had since 2006.

Although there are a limited number of cases with noneconomic damages that otherwise would exceed $750,000, the most severely injured people are the ones who will be adversely affected by the new law.

Depending upon the special damages and the complexity of the case, the limit on recovery might dissuade a lawyer from pursuing such a case, especially when considering two other provisions of the new law – limits on punitive damages and the inadmissibility of peer review incident reports.

Those provisions of the new law, which are discussed below, may result in fewer settlements in long-term care cases and smaller settlements than might have been effected under the old law.

Limits on punitive damages

The new law limits punitive damages to twice the amount of compensatory damages or $200,000, whichever is greater. The limits on punitive damages do not apply to cases against drunk drivers.

The limits on punitive damages will likely impact cases with egregious wrongdoing but with limited compensatory damages. If the compensatory damages are less than $100,000, punitive damages cannot exceed $200,000.

Depending upon the wealth of the defendant, that limitation on punitive damages may not adequately accomplish the goal of punitive damages – to punish the wrongdoer and deter future wrongdoing.

The fear of a large punitive damage verdict has probably served to induce settlements in cases having particularly heinous conduct. The concern about a large punitive damage award will be lessened under this law in those cases with relatively limited compensatory damages, perhaps leading to more trials and less settlements in such cases.

Inadmissibility of health-care reports and incident reports

People suing health-care providers, including nursing homes and other long-term care facilities, may have a more difficult time proving their cases under the new law.

An incident report or occurrence report, written or oral, may not be released to any person other than one participating in peer review activities and may not be used in any case, civil or criminal, against a health-care provider.

Theoretically, plaintiffs may lose their ability to prove their cases because they are unable to obtain the reports. Even if the plaintiffs obtain the reports, they will not be able to admit them into evidence to support their cases.

Reports that are inadmissible under the law include reports required to be given to regulatory agencies, and statements or records of interviews with employees of health-care providers obtained by regulatory agencies.

On its face, the law insulates health-care providers from impeachment based on reports prepared by that person as part of the investigation of an incident.

As John Henry Wigmore stated so well, cross-examination is the greatest legal engine ever invented for the discovery of truth. Not being allowed to use admissions contained in an incident or occurrence report throws a wrench into that engine.

Modification of the frivolous action or defense statute

The new law changes the manner in which sanctions are determined and assessed against a party or lawyer for maintaining an improper claim, counterclaim, or appeal.

If the trial court finds, upon clear and convincing evidence, that a claim, counterclaim, or appeal was commenced or continued improperly, the court may determine the sanction against the party or lawyer, including, if warranted, actual costs and attorney fees. If the party against whom the motion is filed fails to withdraw or correct the improper action or defense within 21 days, the court shall award the party who filed the motion actual costs and actual attorney fees.

Thus, failing to correct the improper action within 21 days will result in a mandatory imposition of actual costs and attorneys’ fees.

Product liability

The new law changed the risk contribution law enunciated in the lead paint case, Thomas v. Mallett, 2005 WI 129, so that a plaintiff must now prove, among other things, either that the product that injured the plaintiff was manufactured by the defendant or that the defendants were manufacturers of such products and collectively manufactured at least 80 percent of all such products sold in Wisconsin at that time.

Under this theory of liability, the manufacturer must have manufactured the product within 25 years of the accrual of the plaintiff’s cause of action. Thus, the burden upon the plaintiff in such cases is much more difficult.

The new law sets a 15-year statute of repose for all product liability cases other than risk contribution cases, thus denying a number of people any chance to recover compensation for their injuries.

A seller or distributor of a product may only be sued if the plaintiff proves an inability to recover compensation from the manufacturer.

Finally, the new law provides that a product complying with standards approved by a federal or state agency creates a rebuttable presumption that the product was not defective.

Conclusion

Lawyers representing injured people will have a more difficult time achieving justice for their clients under the new law.

About the author

J. Michael End, Marquette 1973, is a partner at End, Hierseman & Crain LLC, Milwaukee, and current president of the Wisconsin Association for Justice. End represents plaintiffs in tort actions with an emphasis in medical malpractice law, and is a frequent lecturer in the areas of medical malpractice law and trial practice.

Related

• Perspective on tort reform: Reforms improve Wisconsin’s civil liability system – InsideTrack, March 2, 2011
• Peer review statute: Health care providers get broader protections under revised law – InsideTrack, Feb. 16, 2011
• The Daubert Standard in Wisconsin: A Primer (forthcoming in the March issue of Wisconsin Lawyer)
• PINNACLE, Litigation, Dispute Resolution & Appellate Practice Institute, Frontier Airlines Center, Milwaukee, May 5-6
  • Hot Topics in Personal Injury Litigation, May 5, 10:15-10:45 a.m.
  • New Legislators, New Legislation: How the 2011 Changes to Civil Litigation Will Affect Your Practice, May 6, 1:15-2:05 p.m.
  • Practical Tips and Techniques for Handling New Legislation (Daubert, Frivolous Lawsuits, Punitive Damages), May 6, 2:10-3 p.m.