HB2232

SECTION 1. The legislature finds that it is necessary to establish special medical tort reform provisions for areas of the State that have a shortage of primary medical care physicians. The legislature further finds that it is necessary in these cases to:

(1) Abolish joint and several liability;

(2) Permit judgments that provide for periodic payments of awards, in order to ensure that judgments are used for the intended benefit of the injured party;

(3) Limit attorney's fees; and

(4) Limit noneconomic damages.

By authorizing periodic payment judgments, the legislature intends that the courts use these judgments to provide compensation that is sufficient over time to meet the needs of an injured plaintiff and persons who are dependent on the plaintiff. At the same time, the legislature intends the periodic payments to eliminate the potential windfall from a lump-sum recovery in the situation when an injured plaintiff dies shortly after the judgment is paid, leaving the balance of the judgment award to persons and purposes for which it was not intended. The legislature further intends that all elements of the periodic payment program be specified with certainty in the judgment ordering the payments and that the judgment not be subject to modification at some future time which might alter the specifications of the original judgment.

The purpose of this Act is to encourage more physicians and other health care providers to practice in medically underserved areas of Hawaii.

SECTION 2. Chapter 671, Hawaii Revised Statutes, is amended by adding a new part to be appropriately designated and to read as follows:

"PART . SPECIAL MEDICAL TORT REFORM

PROVISIONS FOR HEALTH PROFESSIONAL SHORTAGE AREAS

§671-A Application. This part shall apply only to medical tort actions in which the cause of action arose in a health professional shortage area within the State.

§671-B Definitions. For the purpose of this part:

"Health professional shortage area" means an area or medical facility in the State that has been designated a health professional shortage area for primary medical care by the United States Department of Health and Human Services, Health Resources and Services Administration.

"Joint tortfeasor" means the same as defined in section 663-11.

§671-C Abolition of joint and several liability. (a) Joint and several liability for health care providers that are joint tortfeasors in a medical tort is abolished.

(b) Any party subject to subsection (a) shall be liable for:

(1) That party's share of any damages only and not for the share of any other person; and

(2) The amount of damages allocated to that party in direct proportion to that party's percentage of liability.

(c) A separate judgment shall be rendered against each party subject to subsection (a) for the amount allocated to that party. For the purposes of this section, the trier of fact shall determine the proportion of liability of each party for the claimant's death, injury, or other damage.

(d) The trier of fact also shall determine the proportion of liability and amount allocated to a party who is not subject to subsection (a).

§671-D Periodic payments. (a) As used in this section:

"Future damages" includes damages for future medical treatment, care or custody, loss of future earnings, loss of bodily function, or future pain and suffering of the judgment creditor.

"Periodic payments" means the payment of money or delivery of other property by the judgment debtor to the judgment creditor at regular intervals.

(b) In any medical tort action, a court, at the request of either party, shall enter a judgment ordering that money damages or the equivalent for future damages of the judgment creditor be paid, in whole or in part, by periodic payments rather than by a lump-sum payment if the award equals or exceeds $50,000 in future damages. In entering a judgment ordering the payment of future damages by periodic payments, the court shall make a specific finding as to the dollar amount of periodic payments that compensates the judgment creditor for future damages. As a condition to authorizing periodic payments of future damages, the court shall require a judgment debtor who is not adequately insured to post security adequate to ensure full payment of damages awarded by the judgment. Upon termination of periodic payments of future damages, the court shall order the return of this security or so much as remains to the judgment debtor.

(1) The recipient or recipients of the payments;

(2) The dollar amount of the payments;

(3) The interval between payments; and

(4) The number of payments or the period of time over which payments shall be made.

Periodic payments shall only be subject to modification in the event of the death of the judgment creditor as provided under subsection (e).

(d) In the event that the court finds that the judgment debtor has exhibited a continuing pattern of failing to make periodic payments, the court shall find the judgment debtor in contempt of court and shall order the judgment debtor to pay to the judgment creditor any delinquent periodic payments and all damages caused by the failure to make periodic payments, including court costs and attorney's fees.

(e) Money damages awarded for loss of future earnings shall not be reduced or payments terminated by reason of the death of the judgment creditor, but shall be paid to persons to whom the judgment creditor owed a duty of support, as provided by law, immediately prior to the judgment creditor's death. Upon petition by any party in interest, the court that rendered the original judgment may modify the judgment to award and apportion the unpaid future damages in accordance with this subsection.

(f) Upon the satisfaction or expiration of all obligation specified in the periodic payment judgment, any obligation of the judgment debtor to make further payments shall cease, and any security given pursuant to subsection (b) shall revert to the judgment debtor.

§671-E Attorney's fees. An attorney shall not contract for or collect a contingency fee for representing a party seeking damages in connection with an action for a medical tort in excess of the following limits:

(1) Forty per cent of the first $50,000 recovered;

(2) Thirty-three and one-third per cent of the next $50,000 recovered;

(3) Twenty-five per cent of the next $500,000 recovered; and

(4) Fifteen per cent of any amount by which the recovery exceeds $600,000.

These limitations shall apply regardless of whether the recovery is by settlement, arbitration, or judgment or whether the injured party on whose behalf the recovery is made is a responsible adult, an infant, or a person of unsound mind.

As used in this section, "recovered" means the net sum recovered by the injured party after deducting any disbursements or costs incurred in connection with prosecution or settlement of the claim. Costs of medical care incurred by the plaintiff and attorney's office overhead costs or charges are not deductible disbursements or costs for the purposes of this section.

§671-F Limitation on noneconomic damages. Notwithstanding section 663-8.7, noneconomic damages as defined in section 663-8.5 shall be limited in medical tort actions to a maximum award of $250,000."

SECTION 3. This Act does not affect rights and duties that matured, penalties that were incurred, and proceedings that were begun, before its effective date.

SECTION 4. In codifying the new sections added by section 2 of this Act, the revisor of statutes shall substitute appropriate section numbers for the letters used in designating the new sections in this Act.

SECTION 5. This Act shall take effect on July 1, 2008.

INTRODUCED BY:	_____________________________

HOUSE OF REPRESENTATIVES	H.B. NO.	2232
TWENTY-FOURTH LEGISLATURE, 2008
STATE OF HAWAII