Indiana has taken a step toward creating a commission that would examine changes in the state’s legal system that some feel would help families save money.
The state Senate Judiciary Committee last week approved HB 1417, which originally featured a variety of tort-reform measures but was deemed too ambitious before its focus was narrowed. The House of Representatives on Feb. 2 approved an updated version that would limit the power of prosecutors to bring lawsuits under a “public nuisance” theory of liability.
The new Senate version keeps that focus while adding the establishment of a “Tort Reform Commission” to review several issues possibly facing the state’s courts. Research from the U.S. Chamber Institute for Legal Reform shows every Indiana household pays almost $3,000 extra in tort costs.
“Other states are already reaping the benefits of bold action. Florida’s recent legal reforms produced double-digit insurance rate decreases and put money directly back into residents’ pockets through refunds,” the ILR said.
“While Indiana has a more business-friendly legal environment than Florida did when it started to reform, the state would still benefit significantly from commonsense fixes. Reducing litigation costs in Indiana would lower insurance rates, improve affordability, and cement the state’s position as a top destination for business investment.”
The commission would review the adjustment of damages in wrongful death, medical malpractice and other lawsuits. The state does not allow a plaintiff to recover any damages if they are found to be at least 50% at fault, and there are caps on non-economic and punitive damages.
The commission would issue a report before Nov. 1 after reviewing the effects of tort reform on public safety and increases in medical costs and cost of living that happen as a result of large verdicts and settlements in the civil justice system.
The new version of the bill still aims to reform lawsuits brought under the public nuisance theory, which has been used by cities, counties and states to score billions of dollars in settlements over products like cigarettes and opioids.
For years, critics have been concerned with how the legal claim has been expanded by government officials and the private lawyers they hire on contingency fees. Indiana could become the second state to declare a company can’t be sued by a government for public nuisance over lawful actions.
The effects of the opioid crisis were called a public nuisance in the countless lawsuits filed against manufacturers, distributors, pharmacies and pharmacy benefit managers. But legislators repeatedly reference Indiana cities’ lawsuit against Kia and Hyundai that said their cars were too easy to steal, creating a public nuisance even though third-party criminals could be considered the real problem.
The new version of the bill would keep public nuisance to actions concerning public air, land or water. Montana passed something similar last year, and other states are considering legislation this year.
Local governments would still be free to file claims for negligence or products liability.
Another part of the bill has a broader effect than how one legal claim is used by governments. It would increase a cap on penalties on litigants in certain situations.
When a plaintiff rejects a settlement offer, then proceeds to trial and either loses or is not awarded as much as the offer was, they would be on the hook for paying up to $100,000 of the other side’s legal bills. Currently, that cap is only $5,000.
