Injury, consumer case laws change

On October 1, 2011, in News 2011, by Mark Norris

By Richard Locker, Commercial Appeal
October 1, 2011

NASHVILLE — Tennessee’s legal landscape changes dramatically today. Legal actions for injuries, deaths and other losses that occur from today forward are subject to big changes in personal-injury and consumer-protection laws, including new caps on damage awards.

Gov. Bill Haslam, the lawmakers and business groups who advocated passage by the state legislature of the “Tennessee Civil Justice Act of 2011” say it creates a business climate conducive to job creation. Senate Majority Leader Mark Norris, R-Collierville, said the law he co-sponsored “is designed to put us on a level playing field so we have predictability and certainty for businesses which look to locate or expand their operations in Tennessee.”

But lawyers said Friday the changes will hurt people who suffer catastrophic injuries by limiting the amounts of damages they’re awarded and also many others by making it more difficult to sue under a variety of existing laws, including the Tennessee Consumer Protection Act, written in 1977 to protect citizens from deceptive and fraudulent acts.

They said safeguards that existed in Tennessee, plus medical malpractice changes made in 2008, prevented “runaway” jury awards and “frivolous” lawsuits that prompted changes in other states.

“It’s not going to just impact victims of medical malpractice or car wrecks. It’s also going to impact taxpayers because when people get critically injured and don’t get compensated, taxpayers often end up footing the bill. The person responsible should pay for it,” said Memphis lawyer Bryan Smith.

The new law imposes limits on “non-economic” and punitive damage awards that juries can impose in personal injury and health care malpractice lawsuits. “Non-economic” damages are difficult to quantify financially, like pain and suffering and loss of enjoyment of life.

Those awards will be capped at $750,000 in most cases and at $1 million when victims suffer spinal cord injuries that lead to loss of use of two or more limbs; amputation of two hands, two feet or one of each; severe burns; or in the wrongful death of a parent with a surviving minor child or children.

Economic damages, which compensate victims for actual costs of medical care and loss of income, are not capped. But punitive damages are capped at two times compensatory damages or $500,000, whichever is greater, and the legal standards of proving punitive damages are raised.

“The caps really impact cases where people are catastrophically injured or there’s death,” Smith said. “The more catastrophic — the worst cases where people truly deserve to be made whole — those are the ones most hurt, not the run-of-the mill car wreck case where there are not serious injuries. It doesn’t affect those.”

The bill also substantially alters the state’s Consumer Protection Act. It prohibits lawsuits under the TCPA for securities fraud, and prohibits some lawsuits filed by individuals — providing instead for enforcement of key provisions by the state attorney general, who has discretion over whether to file suit.

Memphis attorney Sadler Bailey said Friday that in his view, “the worst part of this is that the Tennessee Consumer Protection Act is no longer applicable to insurance companies. … An insurance company in Tennessee can now basically deny a claim without justification and there is very little recourse.”

Concern about the new law isn’t limited to attorneys who represent plaintiffs in such cases. The president of the Tennessee Bar Association, Memphis lawyer Danny Van Horn, said “the limits placed on the real human costs of injuries in Tennessee will have little impact on routine cases (but) as lawyers we also see cases like some of those filed in the past several weeks in the run-up to the deadline, where medical mistakes may have resulted in the loss of the wrong limb. The impact of the limits in cases like this will be the tragic result of the legislation.”

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