May, 28, 2009
Wisconsin Tort Reforms Endangered
By Amy C. Kjose
Gene Ellwood was driving his wife and her
four sons in his compact car, and missed a stop
sign and the rumble strips in the pavement only
to head directly into the path of a bus poised to
drive through the intersection. Unfortunately, the
vehicles collided, killing Mrs. Ellwood’s son and
putting her into a coma.
The 1991 accident was clearly caused by
Mr. Ellwood’s disregard of the signs in the
intersection. However, his insurance policy was
insufficient even to cover Mrs. Ellwood’s
healthcare costs. Thus, negotiations based on
Wisconsin’s draconian liability laws at the time of
this accident resulted in the insurer of the bus
company, whose driver respected the traffic
laws, paying $1.9 million compared to Mr.
Ellwood’s insurer paying $100,000.
Mrs. Ellwood’s attorneys argued that
because the bus driver did not slam on his
brakes or swerve to avoid the car, he and the
bus company were partially at fault. This might
seem outrageous, but under Wisconsin’s laws at
the time, a defendant only minimally at fault
could be held responsible for all of the damages.
The bus company’s insurers had the deepest
pockets and could therefore pay the most
money.
Under Wisconsin’s laws prior to 1995, such
settlements were not unordinary. Fortunately, in
1995, the Wisconsin legislature enacted reforms
to help ensure that the state’s legal system only
punishes defendants for that which is their fault.
The legislature, however, is now trying to
return to the arcane laws that punished the bus
company in the above case. Via a provision
snuck into the state budget - of all places - the
legislative majority is attempting to eliminate the
existing statute articulating that only those
defendants responsible for more than half of the
total liability could potentially be responsible for
paying the entire bill. Under the legislature’s
newest “compromise”, a defendant 21 percent
responsible for the damage could cover the
entire award, unfairly punishing those
businesses with the deepest pockets.
This might seem like a complicated legal
issue that won’t affect most Wisconsinites. The
truth is that this legislation could seriously risk
jobs located in the state.
In the midst of a national recession,
Wisconsin legislators should not impose unfair
costs on Wisconsin businesses. A company’s
bottom line could be so negatively affected that
it may no longer be able to afford the cost of
doing business in Wisconsin. Businesses, along
with the jobs and revenue they supply to the
state, could easily relocate to Minnesota whose
liability laws would be much more favorable in
comparison to the proposed rule change. In fact,
the change suggested by Wisconsin legislators
would render Wisconsin’s liability laws the worst
of its neighboring states and among the worst in
the nation.
Lawmakers should be slow to consider
enacting such legislation that inflicts businesses
with additional costs in this dire economic
environment. At the very least, one would hope
that Wisconsin legislators wouldn’t use sly
tactics to change the law without public input
and consideration. In 1995, the policy change
was given adequate discussion time. Hearings
were held, benefits and concerns were
considered, and the legislature decided to pass
a fair-minded reform. As a part of the state
budget, such deliberations would not take place.
The ramifications of such a policy change
are so intertwined with the lives of all
Wisconsinites that to overturn this policy in a
budget proposal without proper hearings and
considerations would be short-sighted.
It is time for the legislature to slam its brakes
before it unfairly penalizes its businesses and
citizens.
Amy C. Kjose is the Director of the Civil Justice
Task Force at the American Legislative
Exchange Council, the nation’s largest nonprofit,
nonpartisan membership organization of state
legislators.