Bar News - April 20, 2007
New Hampshire Needs to Restore Legal Liability to its Traditional Balance
By: Charles G. Douglas III
The insurance industry hysteria over the recent House vote in favor of House Bill 143, a bill that would define who is a party in a lawsuit, is hard to understand. The bill is in the best interests of both New Hampshire consumers and businesses alike. It means fewer defendants and lower defense costs—not more.
HB 143 was introduced to correct two Supreme Court decisions that upset the balance of a carefully crafted statutory framework from the 1980s which controls lawsuits where more than one defendant is or may be negligent. The decisions shifted the law so that defendants, instead of injured parties, have the most control in a lawsuit because defendants can now blame other people who are not before the court or jury because they settled or because, for one reason or another, the law does not allow them to be sued.
Rep. Steve Stepanek stated in his recent opinion column (Union Leader, March 9, 2007, “Lawyers Should Collect from Those at Fault, Not Deepest Pockets.”) that HB 143 must fail: “If fairness is to prevail in our justice system, defendants must be held accountable for only their proportion of responsibility.” This argument ignores the fact that someone else is involved besides the defendants.
What Rep. Stepanek is arguing, with all due respect, is that defendants who did something wrong should not pay a penny more than their percentage of fault, even if it means the plaintiff, who did nothing wrong, is injured and unable to recover enough money to pay her medical bills. Is “fairness to prevail in our justice system” or is sheer “tough luck” to prevail?
Rep. Stepanek also ignores the fact that, under HB 143, defendants are protected from “overpayment” because they can recover from others who did not pay their fair share.
If HB 143 fails, plaintiffs will continue to be forced to sue every person the defense might intend to blame. Anticipating the fact that negligent defendants will want to name as many people as possible when it comes to apportioning damages, plaintiffs will be less willing to decline to sue or to release a defendant who had very little liability or who wishes to settle and save trial costs.
This means that far fewer lawsuits will settle out of court. It means that even if someone’s liability is doubtful, a plaintiff must sue that person and keep him in the case so that a jury can determine his liability. One recent court decision even allows employers to be sued even though they have immunity under workers’ compensation laws. How does that help members of the BIA [Business and Industry Association] or a chamber of commerce?
Keep in mind it costs just as much to defend a suit in which your liability is questionable as it does to defend a suit in which you are 100 percent liable. Do not let anyone convince you that HB 143 will drive legal costs up; it will reduce defense costs and the number of lawyers and defendants in a trial. Businesses without insurance will now be kept in court to the bitter end so fingers will not be pointed at an empty chair if the plaintiff had settled with them.
HB 143 would restore the legal scheme that controlled lawsuits and worked very well from 1989 to 2003. During those 15 years, did municipalities regularly find themselves in lawsuits where they were found 1 percent at fault and paying 100 percent of damages? During those 15 years, was New Hampshire considered an “unfriendly business environment”? Of course not. But here is another important question: Have insurance premiums fallen in the past three years since the Supreme Court changed the law? Businesses know otherwise.
Do not let the histrionics of the insurance lobby tempt you to oppose a bill that will reduce litigation costs and promote the reasonable settlement of disputes.
Charles G. Douglas III is a civil litigator and member of Douglas Leonard & Garvey in Concord. He has previously served as a senior justice on the NH Supreme Court and as a US congressman.