Governor Bill Haslam signed his tort reform measure into law Thursday, saying it both protects victims’ rights and gives a ‘predictable playing field’ for business.
The effort to place a cap on non-economic damages in civil lawsuits was one of three main issues of Haslam’s first-year legislative package. He signed the measure before a roomful of business representatives.
The governor said the subject of limiting damages came up at a recent dinner with some twelve CEO’s who are being recruited to the state.
“I was with a group of executives this week, encouraging them to move to their business to Tennessee, and it wasn’t me bringing it up …When I said, ‘What are the things that are a big deal to you?’ … education and tort reform were the first two things out of their mouth.”
Haslam says he thinks the state is on the right path with education, and the signing of the tort reform measure makes Tennessee more competitive with other states that have passed such laws.
Haslam says he “doesn’t know how to quantify” the number of jobs that might result, but he’s sure that some companies will come to the state who would otherwise shy away.
The tort reform bill limits non-economic damages to a victim – things like “pain and suffering” and punitive damages. It doesn’t limit actual provable costs that a victim may have incurred, like hospital bills or loss of income.
The governor says the CEOs at this week’s dinner included three manufacturers, two financial services firms, and three companies in logistics services.
Haslam says his new plan at the Department of Economic and Community Development focuses on six specific clusters of industries:
* automotive manufacturing
* chemicals and plastics
* transportation, logistics and distribution services
* business services
* health care
* advanced manufacturing and energy technologies.
The bill sponsor in the House was Vance Dennis, who says the civil justice system in the state was edging out of its old, staid bounds.
“Over the last few years, over the last few decades, it’s gotten a bit expensive, and a bit inefficient. We’re at a point where …less than 50 percent of our expenditures in our civil justice system go to compensating victims.”
He says the new law will still protect victims:
“This will move us more towards a more effective, a more efficient system that allows businesses and individuals across this state to quantify their risk, and at the same time ensuring that those victims who are wronged are adequately compensated.”
House Democratic Leader Craig Fitzhugh says the tort reform bill that passed was a better bill than was first introduced – limits were raised for certain types of catastrophic events that happen to an individual, like becoming a paraplegic.
But he says the bill may have unintended consequences.
“I didn’t think we had a real severe problem before. It may not have that detrimental effect on companies, I just hope it doesn’t have that detrimental effect on individuals who may have been harmed by companies, especially those companies that are from out of state, out of country.”
The bill (HB 2008 Dennis/SB 1522 Norris) went through a long legislative process. Conservatives have been trying to get the measure passed for 10 years.
Our most recent story summed up the bill at the end of that action: