The NAM joined in an amicus brief on 1/9/09 supporting Arkansas’ tort reform statute that allows juries to consider the negligence or fault of nonparties (i.e., replaces joint liability with several liability) and permits evidence for the costs of necessary medical care, treatment or services that were paid by third parties on the plaintiff’s behalf (i.e., abolishes the “collateral source” rule).
On April 30, the Arkansas Supreme Court disagreed, saying the tort reform provisions violated the separation-of-powers provisions of the Arkansas Constitution, which gives the court the authority to establish rules of pleading, practice and procedure. While it recognized that changing the law that apportions liability is substantive and within the power of the legislature, this law also dictated procedures to be followed in court, a task reserved to the judicial branch. We had argued that the statute properly replaced “deep pocket” joint liability with “fair share” several liability, ensuring that blame for the harm would be placed where it belongs, not solely on those who may have been only marginally at fault.
The second portion of the statute being challenged was the one that eliminated the collateral source rule, which has traditionally operated to exclude evidence of payments received by an injured party from sources “collateral to” (other than) the wrongdoer, such as private insurance benefits. We could not put it better than the Arkansas Supreme Court, which stated in its opinion in Bell v. Estate of Bell that “the injured party who is compensated for his injury by collateral sources as well as by the wrongdoer receives a double recovery. For that reason, the collateral source rule has been criticized by commentators who point out that it is incongruous with the compensatory goal of the tort system.”
However, the Arkansas court decided that because the statutory language spoke in terms of admissible evidence, it fell within the constitutional restriction that gives the power to determine rules of pleading, practice and procedure to the courts.
It thus appears that the legislature must make sure that statutory language sets substantive rules of liability without telling the courts how to implement them. Another alternative would be for the courts themselves to update their procedures to better reflect the will of the people.