April 14, 2009
In 1995, with Gov. Tommy Thompson at the height of his popularity and a Republican majority in the Legislature, Wisconsin drastically changed its law to limit awards in personal injury cases.
Riding a national wave of "tort reform" -- spurred by lavish judgments such as the McDonald's coffee spill case -- and amid claims of "legal extortion" by trial attorneys seeking to win huge out-of-court settlements in product liability cases, a bill moved quickly to Thompson's desk.
With support of the insurance industry, doctors and business groups, Thompson signed the measure amid much fanfare.
Now, with Democrats firmly in control of the statehouse, Wisconsin is poised to roll back those 1995 changes in the name of protecting consumers and taxpayers.
A line item in Gov. Jim Doyle's 2009-2011 budget could drastically change the outcome of civil court cases in the state, including claims involving injuries in serious auto accidents. If signed into law, it would redefine the state's provision for "joint and several liability" -- a legal term where multiple parties can be deemed liable.
The existing law says a defendant must be at least 51 percent at fault to be found 100 percent liable in a lawsuit. But Doyle's budget proposes that a defendant, whether an individual or corporation, could be held liable even if only partly at fault for an accident, the same as before 1995.
"This is simply about the trial lawyers seeking out those who have the deepest pockets," said Bob Fassbender of the Wisconsin Civil Justice Council Inc., a coalition representing Wisconsin employers that was formed earlier this year to fight such legislation. "But it's going to have a chilling effect on the state's business climate at exactly the wrong time."
Fassbender gave an example where someone is injured in a bicycle crash. He warns if a jury finds the bike manufacturer just 1 percent responsible, the company and its insurer could be required to pay 100 percent of the damages.
"To any reasonable person, that just isn't fair," he said.
But those backing the Doyle budget initiative say returning to the pre-1995 law is needed to ensure that working people and consumers are adequately compensated when injured in an accident.
The Wisconsin Association for Justice, which represents trial lawyers, contends that the playing field has tipped too far in the wrong direction, leaving individuals and in many cases their health insurance providers picking up the costs for their injuries.
Groups supporting the change -- including Citizen Action of Wisconsin -- note that most property and casualty insurers in the state are sitting on healthy surpluses, including $4.1 billion for American Family, $510 million at West Bend Mutual and $744 million at General Casualty (QBE).
"We've had years of windfall benefits going to liability insurers," said Mark Thomsen, president of the lawyers group. "It's time to start making those responsible pay their share."
Thomsen said when liability insurers don't pay to cover someone injured in an accident, those costs are eventually shifted to that person's health insurer. And in cases where the person doesn't have adequate health coverage, the costs ultimately fall upon the government through Medicare, BadgerCare or other public sector safety nets.
A spokeswoman for Gov. Doyle agreed with Thomsen.
"The provision addresses a fairness issue by taking the burden of the costs to care for severely injured people off of society and onto the people at fault," said Carla Vigue.
Whether those costs have been shifted remains open to debate. Andy Franken of the Wisconsin Insurance Alliance, an industry trade association, notes that the non-partisan fiscal bureau has said the provision would have little or no impact on Doyle's $67.2 billion budget.
In addition, he said, the state's private sector health insurers have not been pushing for the change. "The fact that health insurers aren't supporting this shows how bogus the (cost-shifting) argument is," said Franken.
But Thomsen, an attorney with Cannon & Dunphy of Brookfield, recounts several cases where people were injured and were unable to recover their medical costs because of the changes made in 1995.
One case involved the 2006 explosion at the Falk Corp. plant in Milwaukee that killed three workers and injured 45 others, including Robert Kubiak.
Kubiak, who had to undergo nine surgeries related to injuries in the explosion, eventually sued the company owners. But Kubiak was unable to recover the cost of his medical bills, Thomsen said, because of technicalities in the law and the inability to determine that one party was 51 percent at fault.
"What we've done since 1995 is shift responsibility away from responsible parties to those who have been wronged," he said.
In either case, those opposing the Doyle provision say the issue should be debated as a separate piece of legislation rather than being "tucked" into the budget bill.
"All we're saying is let's have a full and open hearing on this and get input from the public," says Franken.
But Doyle spokeswoman Vigue says the issue does belong in the budget since the governor is trying to hold down Medicare and Medicaid costs in Wisconsin.
"People who are injured and can't cover the cost of their treatment usually end up in Medicare or Medicaid and those costs are pushed on to state taxpayers," she said.
Franken is not convinced. He says the only reason the issue is seeing the light of day is Doyle and the Democrats' long-standing ties to the legal profession.
"If the trial lawyers are so worried about consumers not getting fully compensated, let them drop their fees from one-third to one-tenth of any recovery," he said.