Tennessee Civil Justice Act of 2011 approved by State Senate

The Tennessee Civil Justice Act of 2011, sponsored by Senate Majority Leader Mark Norris (R-Collierville) and Senator Brian Kelsey (R-Germantown), was approved in the State Senate today by a vote of 21 to 12. The legislation is designed to provide certainty and predictability for businesses, while ensuring that injured plaintiffs receive all of the economic, quantifiable damages they suffer.

Norris said Tennessee’s current civil justice law puts the state at a competitive disadvantage when it comes to attracting new businesses and jobs, especially since it is one of the few in the Southeast which has yet to reign in lawsuit abuse through tort reform.

“This is very important legislation,” said Senator Norris. “It is much more than tort reform, as we must be competitive with other states. The state of Tennessee has always been on the cutting edge of tort reform. We must remain competitive, not just in the South or in a regional economy, but in the global context. This bill 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.”

“The uncertainties of life command that we balance the need to quantify the risk with our compassions,” he added. “This will strengthen our judicial system and our state as a whole.”

“Our current civil justice system threatens Tennessee’s business climate and hampers our ability to create jobs,” said Lt. Governor Ramsey (R-Blountville). “Unlimited exposure to costly litigation drives up business costs and drives away new jobs. Every citizen should have access to the courts but it is critical that damage awards do not spin out of control and hurt our ability to grow jobs in Tennessee.”

“The legislation will provide certainty and predictability for businesses that want to locate in Tennessee,” said Senator Kelsey. “When we attract businesses, we attract jobs. Without this law, Tennessee is the only state in the southeast that has no limits on possible punitive damage awards. With this law, Tennessee can become the number one state in the southeast for high quality jobs.”

Key provisions of Senate Bill 1522 include:

  • The bill limits the maximum appeal bond amount from $75 million to $25 million or 125 percent of the judgment amount.
  • It defines two components of compensatory damages: economic and non-economic damages.
  • The measure places a cap on non-economic damages, which are subjective damages like pain and suffering, at $750,000 per injured plaintiff for both healthcare liability action and other personal injury actions. However, if the harm suffered is intentional, the caps would not apply.
  • As amended, the bill raises the cap to $1.0 million if the plaintiff becomes a paraplegic or quadriplegic because of spinal cord injury, sustains third degree burns over 40 percent or more of his or her body or face, has an amputation of a hand or foot, or wrongfully dies leaving one or more minor children.
  • There is no cap, under the measure, on economic damages and any damages that can be objectively quantified may be recovered.
  • Caps punitive damages, which must be proved by clear and convincing evidence, at two times compensatory damage or $500,000, whichever is greater unless the defendant intended to injure the plaintiff, was under the influence of drugs or alcohol, or intentionally falsified records to avoid liability.
  • Prevents punitive damages in products liability actions, unless the seller had substantial control over the design or manufacturing of the product or had actual knowledge of the defect in the product at the time it was sold.

Norris pointed to the success of the 2008 medical tort reform law which he sponsored and that has been successful in reducing lawsuits since its implementation. The law has resulted in a reduction in non-meritorious claims by 50 percent.

The bill now goes back to the House of Representatives for approval of an amendment before it is sent to the governor for his signature. It will take effect October 1, 2011, and apply to all liability actions for injuries after that date.

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