1988 Update on Colorado Tort Reform Legislation-part I
| Jurisdiction | Colorado,United States |
| Citation | Vol. 17 No. 9 Pg. 1719 |
| Pages | 1719 |
| Publication year | 1988 |
1988, September, Pg. 1719. 1988 Update on Colorado Tort Reform Legislation-Part I
In 1986, the 56th Colorado General Assembly, in response to the so-called "insurance crisis," passed massive tort reform legislation in an attempt to curtail skyrocketing insurance rates and to assure the availability of insurance to all segments of society. An earlier article published in The Colorado Lawyer in 1986 summarized and analyzed this 1986 legislation in the areas of personal injury and workers' compensation laws.(fn1) This article takes up where that article left off. It summarizes and comments on the legislative changes and judicial developments in the area of tort reform law that have taken place since August 1986.
Among the most significant legislative changes enacted by the 57th and 58th Colorado General Assemblies in 1987 and 1988 are statutes: (1) drastically modifying medical malpractice law; (2) making the use of seatbelts mandatory, not only for the driver but for passengers, and providing certain penalties in civil actions for those who fail to use seatbelts; (3) providing for recovery by defendants of costs and attorneys' fees in certain personal injury cases that are dismissed; (4) providing for mandatory arbitration of cases valued at $50,000 or less in certain judicial districts; and (5) dealing with unfair claim settlement practices and fraudulent insurance acts by insurance companies.
Because of the number and complexity of the statutes enacted and numerous case law developments in the area of tort law since 1986, especially concerning medical malpractice, this article is published in two consecutive parts. Part I, published in this issue, covers medical malpractice, including a detailed description of the Health Care Availability Act of 1988 ("Act").(fn2) Part II, to be published in the October issue of The Colorado Lawyer, will cover other developments in tort reform that took place in 1987 and 1988.
As in the 1986 article, the analytical format regarding each legislative change consists of the Senate or House Bill number, the Colorado Revised Statute added or amended, the effective date of the act or section of the act and, where appropriate, a brief note interpreting the perceived changes or effect of the legislation. It is hoped that this broad overview aids the practitioner in gaining a basic awareness and understanding of the existence and effect of important legislative changes and judicial developments in tort law.
1. Senate Bill 143, Health Care Availability Act (1988)
2. Amends: Section 1, Title 13, CRS § 13-64-101 et seq.
3. Adds: Part 9, Article 4, Title 25, by a new section, CRS § 25-4-909 et seq. and CRS § 10-3-104(1) by the addition of a new paragraph
Legislative Declaration4. Effective Dates: CRS § 13-64-201 et seq., Periodic Payments, July 1, 1988; CRS § 13-64-301, Limitations on Liability, Financial Responsibility, January 1, 1989; CRS § 13-64-401, Procedures and Evidence in Medical Malpractice Cases, Arbitration Agreements, Experts, Collateral Source, July 1, 1988; and CRS § 13-64-501, Limitations on Actions Involving Injury at Birth, July 1, 1988.
In enacting Senate Bill 143, the legislature declares that its purpose is to assure the continued availability of adequate health care services to the people of this state by containing the increasing costs of malpractice insurance for medical care institutions and licensed medical care professionals. It is also intended to stop the exodus of professionals from certain specialties in the health care practice.(fn3)
The Act applies to "health care professionals" who are defined as "any person licensed in this state or any other state to practice medicine, chiropractic, nursing, physical therapy, podiatry, dentistry, pharmacy, optometry, or other healing arts."(fn4) The term also includes professional corporations or other entities comprising such health care professionals as defined by the laws of this state.(fn5)
The Act also applies to "health care institutions," which are defined as "any licensed or certified hospital, health care facility, dispensary, or other institution for the treatment or care of the sick or injured."(fn6)
In any civil action for damages in tort brought against a health care professional or a health care institution, the trial judge will enter a judgment ordering that awards for future damages be paid by periodic payments rather than by a lump sum payment if the award for future damages exceeds the present value of $150,000, as determined by the court.(fn7) In any civil action in which the award for future damages is $150,000 or less, present value, the trial court, in its discretion, may order that awards for future damages be paid by periodic payments.(fn8) It should be remembered that the requirement of periodic payments does not apply to past damages which occur before the damages findings are made.(fn9) These damages can be paid in a lump sum.(fn10)
"Future damages" are defined in the Act as damages of any kind arising from personal injuries which the trier of fact finds will accrue after the damages findings are made.(fn11) "Present value" is defined as the "amount, as of a date certain, of one or more sums payable in the future, discounted to the date certain."(fn12) The discount to present value is determined by a commercially reasonable rate that takes into account the facts and circumstances of each case at the time the judgment is entered.(fn13)
If the jury finds liability, in addition to other appropriate findings, it must make separate findings for each claimant specifying the amount of:
(a) any past damages including medical and other costs of health care, loss of past earnings, other past economic loss besides loss of past earnings, and past non-economic loss.(fn14)
(b) any future damages and the period of time over which they will be paid, including loss of future earnings which would be incurred for the work-life expectancy of the plaintiff or a lesser period; economic loss other than loss of future earnings that would be incurred for the life of the plaintiff or any lesser period, and non-economic loss which would be incurred for the life of the plaintiff or any lesser period.(fn15)
Once past damages are separated from future damages, it is possible to structure future damages. The fact that payment of any portion of the judgment will be made by periodic payments is not to be disclosed to the jury.(fn16)
In calculating the respective amounts that each plaintiff is entitled to recover, the court is directed to apply to the amounts of past and future damages found by the jury, any and all set-offs, comparative fault, additurs, remittiturs and any other applicable rules of law.(fn17) The court also must preserve the rights of any subrogated interest to be paid in a lump sum.(fn18) Query: Will this requirement preclude the plaintiff from entering into negotiations with a subrogated interest for repayment of less than the full amount owed? Stated otherwise, is the subrogated interest in a medical malpractice action now entitled to payment in full "off the top," even before the plaintiff gets paid?
The court must specify in the judgment the payment of attorneys' fees and litigation costs separately from the sums payable to the claimant. This must be done pursuant to any agreement entered into between the claimant and the attorney and in accordance with applicable principles of law.(fn19)
The court must also enter judgment in a lump sum for all past damages and for any other damages the court may determine should be paid in a lump sum at the time of entry of judgment.(fn20)
After hearing relevant expert testimony, it is for the jury to determine the present value of future damages. Then the court will enter judgment for periodic payment of such damages.(fn21) However, in considering the evidence of the need for major medical procedures, the court may enter judgment for lump sum payments to cover such major medical procedures payable either at the time of judgment or at some designated future time.(fn22) This provision allows the court to provide funding for any future major surgeries, for example.
Within no more than three months after the return of the verdict by the trier of fact and before the court enters judgment for periodic payments, a plaintiff who has reached the age of twenty-one, who is not an incapacitated person, and who has been provided financial counseling may elect to receive the immediate payment of the present value of the future damages award in lieu of periodic payments.(fn23) Thus, if a plaintiff is over the age of twenty-one and not incapacitated, he or she can always choose to receive a lump sum payment. On the other hand, if the plaintiff is either under twenty-one or incapacitated and the judgment exceeds $150,000, the judgment for future damages must be paid in periodic payments.
A judgment for periodic payments must (1) provide that such payments are fixed...
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