Fifteen Years of Colorado Legislative Tort Reform: Where Are We Now?

• Jurisdiction: Colorado,United States
• Citation: Vol. 30 No. 1 Pg. 5
• Pages: 5
• Publication year: 2001

30 Colo.Law. 1 Colorado Lawyer 2001.

2001, February, Pg. 5. Fifteen Years of Colorado Legislative Tort Reform: Where Are We Now?

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Vol. 30, No. 1, Pg. 1

The Colorado Lawyer
February 2001
Vol. 30, No. 2 [Page 5]

Articles

Fifteen Years of Colorado Legislative Tort Reform: Where Are We Now?
by John G. Salmon

Fifteen years ago, the Colorado legislature began to enact a sweeping series of new laws and amendments restricting the rights of injured persons to recover for their injuries described generally as "tort reform." Such legislative enactments have continued in varying degrees since that time

In 1986, it was claimed by the insurance industry and a coalition of business groups that the need for such new restrictive laws stemmed from personal injury claims that were purportedly increasing at a drastic rate in both frequency and magnitude. The immediate motivating factors for enacting tort reform were a near "doubling" of insurance rates in 1985 and 1986 and that certain risks were becoming uninsurable

It has never been proven that personal injury litigation was the actual cause of the insurance rate increases and difficulties with insurability. A great deal of material has been published since then stating that the principal motivating factor for the 1985-86 "crisis" was an unanticipated reduction in income to insurance companies due to severely reduced interest rates on investments, coincidentally occurring at the same time.

Before 1985, insurance companies fiercely competed with each other for business to generate premiums in order to invest at high rates of return (over 15 percent per year). When interest rates plummeted under the Reagan administration, insurance company income decreased drastically and, according to some writers, gave rise to the need to create justification for doubling insurance rates in 1985 and 1986. Insurance companies spent millions of dollars on advertising to convince the public that these rate increases and capacity difficulties were due to upwardly spiraling personal injury damage awards.

Regardless of the actual cause of the "crisis," tort reform began in earnest in 1986 and has continued since that time. In the fifteen years since tort reform became part of Colorado's approach as a purported cure for ever-increasing insurance costs, the Colorado legislature has enacted a number of laws restricting injured persons' rights to recover fair compensation from responsible parties. Statutes of limitations have been shortened; damage caps have been instituted on personal injury claims; workers' rights under workers' compensation laws have been either eliminated or drastically reduced; and various new or partial immunities have been established for governmental agencies and non-governmental special interest groups, such as those connected with skiing, equine activities, baseball, and even llama raising.

This article does not attempt an exhaustive analysis of each piece of legislation that has been enacted in the last fifteen years. Instead, its focus is on providing an overview of the principal categories of tort reform as a basis for understanding what now exists and to stimulate debate over whether there should be a change. At issue is whether the state of Colorado believes the ultimate cost to injured persons whose compensation is now often significantly limited by tort reform legislation is justified and whether tort reform's avowed purpose of lowering insurance rates has come to pass. Considering that Colorado has enacted the first and most extensive tort reform legislation in the country, it may be time for the Colorado legislature to make a thorough analysis of the effects of such legislation on the state and to determine the direction it needs to go from here.

ABOLISHMENT OF JOINT AND SEVERAL LIABILITY

Pro Rata Liability

In 1986, the Colorado legislature abolished joint and several liability and replaced it with "pro rata liability." As such, no defendant may be held liable for an amount greater than that represented by the degree or percentage of the negligence or fault attributable to such defendant that produced the claimed injury, death, damage, or loss.1 The relative degrees of fault of the joint tortfeasors must be used to determine their pro rata shares.2 In 1987, the legislature reinstated joint liability for those limited situations where a conspiracy exists; that is, joint liability will be imposed when two or more people consciously conspire and deliberately pursue a common plan or design to commit a tortuous act.3

Non-Party Designation

John G. Salmon, Englewood, is senior shareholder with the firm of Salmon, Lampert & Clor, P.C.-(303) 771-9900. He has been in practice in Colorado for twenty-eight years, emphasizing personal injury and insurance law.

In a civil action, the fact-finder may consider the degree or percentage of fault of a person who is not a party to the action in determining the degree or percentage of negligence or fault of those parties to the action. While a finding of fault of a non-party will result in a reduction of damages awarded to the plaintiff proportional to the percentage attributed to the non-party, it will not constitute presumptive or conclusive findings for purposes of a prior or subsequent action involving that non-party. The only requirements for designation of a non-party are that either the plaintiff must have entered into a settlement agreement with the non-party or notice must be given by the defendant that the non-party is partially or wholly responsible for the claimed injury.4 In 1990, this provision was modified such that if the designated non-party is a health care professional, and the defendant alleges professional malpractice, the non-party designation must include a certificate of review.5

Assumption of Risk

Assumption of risk must be considered by the trier of fact in apportioning negligence. Persons assume the risk of injury or damage if they voluntarily or unreasonably expose themselves to injury or damage with knowledge or appreciation of the danger and risk involved. Juries must be instructed on the elements of assumption of risk.6

STATUTES OF LIMITATIONS

Legislative changes in 1986 included significant modifications to statutes of limitations. Most limitations that had previously been set at between six months and one year were set at one year, two-year limitations remained the same, some three- and six-year limitations were shortened to two years, and a very few were set at three years. Actions for most intentional torts, such as assault, battery, false imprisonment, libel and slander, fraud, misrepresentation, or deceit, as well as those actions against police, sheriffs, firefighters, or other law enforcement officials were limited by a one-year statute of limitations.7

Most actions based in negligence, including trespass, outrageous conduct, strict liability, breach of warranty, failure to warn, and all actions against any health care facility or professional were limited to two years. This category also includes any action for wrongful death, actions against governmental entities or personnel, actions based on a federal statute where no statutory limitations are otherwise prescribed, and an important "catch-all" provision that includes "all other actions not included in another category."8

Actions based on the Uniform Commercial Code;9 actions for restraint of trade; breach of trust or fiduciary duty; breach of contract; and civil actions for takings, replevin, or conversion were set at three years.10 Additionally, any action brought under the Colorado Auto Accident Reparations Act,11 Motor Vehicle Financial Responsibility Act,12 and Uniform Consumer Credit Code13 are now included in the three-year statute of limitations. Finally, actions based on secured debts or property encumbered by a security instrument must be brought within six years.14

Statutes of repose, which set absolute time limits on actions brought regardless of when the cause of action accrues, were set at six years for persons in the construction trades;15 ten years for actions against land surveyors;16 and seven years for manufacturers, sellers, or lessors of new manufacturing equipment.17 Two exceptions also were included in this 1986 legislation. For construction claims, if the cause of action arises in the fifth or sixth year, an additional two years can be tacked on, potentially extending the limit to eight years.18 For manufacturers, the statute of repose does not apply if the equipment is misrepresented, material facts are fraudulently concealed and the equipment causes injury, defects are hidden, or prolonged exposure to hazardous materials causes injury.19

Further modifications to statutes of limitations had been made in 1987, 1988, and 1994. First, actions brought under the Real Estate Recovery Fund Act20 were included in the one-year statute of limitations' category. Actions for breach of warranty and recovery of erroneous or excessive refunds of tax payments were then moved to the three-year category.21 Actions to recover liquidated debts or unliquidated determinable amounts were moved to the six-year category. The year 1987 also brought a reinstatement of a three-year statute of repose for actions against health care providers or facilities.22 However, a statute of limitations or statute of repose is still tolled for persons under legal disability until such time as the disability is removed or a legal guardian is appointed.23

Minor changes were made concerning uninsured and underinsured motorist claims in 1994. Currently, any uninsured motorist insurance claim must be filed within three years after the cause of action...