1991 Update on Colorado Tort Reform
| Publication year | 1991 |
| Pages | 2011 |
| Citation | Vol. 10 No. 1991 Pg. 2011 |
1991, October, Pg. 2011. 1991 Update on Colorado Tort Reform
This article serves to supplement articles previously published in 1986, 1988 and 1990 which addressed then current tort reform.(fn1)Summarized herein are the legislative changes and judicial developments in the area of tort reform that have taken place since July 1990.
These changes include, among other things: a ban on exemplary damages arising out of the usage of a drug or product which falls within recommended guidelines or is experimental in nature; the creation of a statutory lien on behalf of the state of Colorado on monies received in an action by a medical assistance recipient against a legally liable third party; the clarification of an insurer's duty to reoffer uninsured motorist coverage when a policy is altered; the authorization of auto insurance carriers to offer no-fault insurance benefits through managed health care organizations; the exclusion of volunteer health care providers from the requirements of minimum liability insurance coverage; enactment of a civil counterpart to the traditional criminal "Rape Shield Rule" which excludes evidence of a victim's sexual history; the adoption of amendments to the Dispute Resolution Act; the imposition upon police officers of a duty to report the use of excessive physical force by police officers; the establishment of criminal penalties, and thus claims of negligence per se, for injuries caused by dangerous dogs; and the imposition of criminal sanctions for ethnic intimidation.
This article addresses legislation enacted by the 61st General Assembly and judicial action interpreting or upholding prior tort reform legislation. It also summarizes a few bills which, although not enacted, will likely be reintroduced in the future. The article is intended to be a general overview, rather than a detailed dissertation of each bill. Another article, to be published in the November issue of The Colorado Lawyer, will address significant worker's compensation legislation, its expected interpretation and possible problems.
1. House Bill 1093
2. Amends: CRS § 13-64-302.5
3. Effective Date: Applies to actions and arbitration proceedings filed or commenced on or after July 1, 1991.
No exemplary damages may be imposed for the use of any drug or product which has been approved by a state or federal regulatory agency and used within its recommended guidelines, or where the use "falls within the standards of prudent health care professionals" [CRS § 13-64-302.5(a)]. Furthermore, no exemplary damages may be imposed where the clinically justified use of such drug or product is beyond regulatory approval or standards (experimental in nature), and where the use has been agreed upon pursuant to a written informed consent signed by the patient [CRS § 13-64-302.5(b)].
1. Senate Bill 105
2. Amends: CRS §§ 10-8-103(5)(a); 10-8-401(1)(a); 10-16-114(3)(a); 10-16.5-109(7)(a); 10-17-134(1); 12-39-112(1)(d); 22-82-102(5); 25-1-
107(1)(ee)(IV); 25-1-107.5(3)(b); 25-1-120(6) and (8)(a); 25-3-103(5); 25-3-108(7); 26-2-114(2)(a); 26-8.1-103(1)(c); 26-11.5-103(3)(a); 27-10.5-103(1)(f); 30-28-115(2)(b)(II); 31-23-303(2)(b)(II); 27-10.5-103(1)(F)
3. Adds: CRS §§ 26-1-129(1)-(3)(b); 2-3-1203(3)(j)
4. Repealed and Reenacted: CRS §§ 26-4-101 et seq.; 26-4.5-101 to 26-4.5-404
5. Effective Date: April 11, 1991
Senate Bill 105, among many other changes, creates an automatic statutory lien for the state of Colorado against any monies recovered by a medical assistance recipient in an action for damages against a liable third party [CRS § 26-4-403(3)]. However, no lien may be imposed against a recipient's property for medical assistance paid on the recipient's behalf [CRS § 26-4-403(1)]. The state's lien is not subordinated to any other obligations of the parties, and both claimant and defendant in a third-party action are liable for the full amount of the state's lien [CRS § 26-4-403(4)(b)]. If the recipient receives medical support or health insurance coverage as the dependent of another, the state's claim is subrogated to the payor's right to recover costs of medical assistance provided to the dependent [CRS § 26-4-403(6)]. The entire amount of any judgement, award or settlement, regardless of its characterization, is subject to the state's lien [CRS § 26-4-403(c)].
Limitation on Exemplary Damages arising out of use of Products or Drugs2011
Establishment of State's Lien on funds Derived from Medicaid Recipient's Third party Claim:
Duty to Notify2011
Vounteer Health Auto InsurranceExcusable Neglect as Exemption for Duty to Notify2014
Insurer's Duty to offer-Uninsured Motorist Coverage2014
Non Fault Benefits to be Offered Through Managed Health Care Providers2015
Staute of Limitations for Auto Accidents2016
Arbiration of NO-Fault PIP Dispute2016 Insurance Matters
Excessive, Inadequate and Discriminatory Rates Charged by Property and Casualty Insurance Companies2018
Improvement to the Regulation of the Divisons of Insurance(Pregnancy and Childbirth)2018
Confidentiality Of Mediation Proceedings2018
Drama Shop Act2021
Limitation on Liability of Social Host2021
Preculsion of First-Party Claims2021
Comparative Negligence-Assumption of Risk2021
Household Exclusion2022
If an action is brought solely by the recipient and the recipient incurs personal liability for attorneys' fees, the state will pay its reasonable share of attorneys' fees, provided such fees do not exceed 25 percent of the state's lien. The state is not liable for costs [CRS § 26-4-403(4)(d)].
The statute further provides that a recipient's contributory negligence may not be imputed to the state [CRS § 26-4-403(e)]. The most probable interpretation of this section is that, for example, if a defendant is found 40 percent negligent, the state is not limited to recovery of only 60 percent of its lien value, but may recover the entire amount.
Each party with knowledge of receipt of Medicaid must give notice of the recipient's intent to file a third-party claim. Failure to notify the state of a third-party claim makes the attorney or other legal representative of the recipient liable for the full lien amount. Liability is conditioned on an attorney or other legal representative having "actual knowledge" of the receipt of Medicaid assistance [CRS § 26-4-403(5)]; but see, Senate Bill 248, discussed next, which provides an exclusion for "excusable neglect"].
The Colorado Attorney General has the right to intervene in any action brought by the recipient against a legally liable third party. The claimant's attorney may be designated as a special assistant attorney general. If represented by its own attorney, the Attorney General need not contribute to the claimant's attorney's fees [CRS § 26-4-403(3)].
If a determination is made that, as a result of fraud, an overpayment was made by the state on behalf of a recipient, such fraudulent overpayment shall be collected by the state at one and one-half times the overpayment, plus interest [CRS § 26-4-403(2)(a)(I)]. If the overpayment was a result of something other than fraud, the state may collect the overpayment, plus interest [CRS § 26-4-403(2)(a)(II)].
1. Senate Bill 248
2. Amends: CRS § 26-4-403(5)
3. Effective Date: June 1, 1991
When a medical assistance recipient or his or her guardian, executor, administrator or other appropriate representative brings an action or asserts a claim for damages against any third party, that person will give the state written notice of the action or claim by personal service or certified mail within fifteen days after filing the action or asserting the claim. The failure to comply with this requirement will make that person liable for the entire amount of medical assistance provided for the injuries.
The bill further provides that the state, after thirty days written notice, may enforce these rights in the District Court of the City and County of Denver. There is an exception in that liability of someone other than the recipient (e.g., his or her attorney or administrator) will exist only if such person had actual knowledge that the recipient had received medical assistance. Furthermore, liability will not exist if it is found by the court that such person's failure to notify the state of the third-party action in question was a result of "excusable neglect" [CRS § 26-4-403(5)].
The above provisions are certain to create a multitude of problems, such as with due process, should the state ever attempt to collect benefits directly from a recipient's attorney, legal representative or legal guardian.
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