S5854 CONGRESSIONAL RECORD — SENATE April 27, 1995

would not have to. Throughout the war

he was held in several different camps

including Buchenwald, Gross Rosen,

and Dachau.

Mr. Weinroth lost both parents,

grandparents, aunts, uncles, three

brothers, and one sister in the camps.

Only he and one sister survived, whom

he found after the war in Germany. Mr.

Weinroth along with his sister came to

Stamford, CT, in June 1949. He came to

this country with nothing but his

trade, watchmaking, and promptly

started a small business repairing

watches. Over the years Bedford Jewelers has grown into a family retail jewelry store—he works there today with

his wife, daughter, and son.

He still resides in Stamford, and is an

active member in the community and

his synagogue, Congregation Agudath

Sholom. He married his wife, Luba, in

1952, whom he met at a displaced persons camp in Germany in 1948. They

have two sons and a daughter, and

three grandsons to carry on the family

name. A 50th anniversary is worth celebrating, yet an anniversary that represents as much as this one should not

and will not go unrecognized. I salute

Mr. Weinroth for his courage and perseverance in the face of extreme hardship.

COMMONSENSE PRODUCT LIABILITY AND LEGAL REFORM ACT

∑

fThe Senate continued with the consideration of the bill.

AMENDMENT NO. 609 TO AMENDMENT NO. 603

(Purpose: To provide for full compensation

for noneconomic losses in civil actions)

Mr. KYL. Mr. President, I ask unanimous consent that the amendment of

the Senator from Maine, No. 608, be set

aside so that I may offer an amendment which is at the desk.

The PRESIDING OFFICER. Without

objection, it is so ordered.

The clerk will report the amendment.

The assistant legislative clerk read

as follows.

The Senator from Arizona [Mr. KYL] proposes an amendment numbered 609 to amendment No. 603:

The amendment is as follows:

At the appropriate place in the amendment

insert the following new section:

SEC. . FAIR COMPENSATION FOR NONECONOMIC LOSSES AND PUNITIVE

DAMAGES.

(a) FULL COMPENSATION FOR NONECONOMIC

LOSSES. Notwithstanding any other provision of this Act, an attorney who represents,

on a contingency fee basis, a claimant in a

civil action in a Federal or State court may

not charge, demand, receive, or collect for

services rendered in connection with such action on any amount recovered by judgment

or settlement under such action for noneconomic losses in excess of 25 percent of the

first $250,000 (or portion thereof) recovered,

based on after-tax recovery.

(b) ATTORNEY FEES FOR PUNITIVE DAMAGES.—With respect to any award or settlement for punitive damages, an attorney’s

fee, if any, received by an attorney who represents, on a contingency fee basis, a claimant in a civil action in a Federal or State

court shall be established by the court based

on the work performed by the attorney, and

shall be ethical and reasonable. It shall be a

rebuttable presumption that an ethical and

reasonable attorney’s fee in such an action is

25 percent of such award for punitive damages.

(c) CONTINGENCY FEE DEFINED.—As used in

this section, the term ‘‘contingency fee’’

means any fee for professional legal services

which is, in whole or in part, contingent

upon the recovery of any amount of losses or

damages, whether through judgment or settlement.

Mr. BROWN addressed the Chair.

The PRESIDING OFFICER. The Senator from Colorado.

Mr. BROWN. Mr. President, I rise to

address the question of medical malpractice concerns, and I believe I speak

for many Senators in expressing the

strong hope that those States that

have addressed this question will not

have their limitations and their efforts

to address this question overruled or

overturned.

In 1986, Colorado enacted, or expanded, the following general tort reforms:

Certificate of merit—Requiring a certificate of merit to be filed at beginning of case that the plaintiff’s attorney has consulted with a qualified expert who based on review of the facts

find that the claim has merit or ‘‘does

not lack substantial justification.’’

Noneconomic damages limit—Limiting noneconomic damages, for pain and

suffering, loss of consortium, and so

forth, to $250,000. Colorado does allow a

court to find ‘‘clear and convincing evidence’’ to justify an increase from

$250,000 to a maximum of $500,000.

Collateral source—Reducing any

damage award by the amount of payment by any collateral source which

partially or wholly indemnifies or compensates the injured party for their injury. If the injured party purchased the

coverage, the reduction is not made,

for example personal disability insurance.

Punitive damage limit—Limiting punitive damages to equal actual damages—1 to 1 ratio between compensatory damages and punitive damages—but allowing the court to increase this to 3 times the compensatory damages for continued egregious behavior during pendency of the

action. Evidence of the income or net

worth of the defendant is not

admissable.

Elimination of joint liability—Generally, Colorado eliminated joint liability for tort damages and further enhanced Colorado’s comparative negligence system by which defendants are

liable only for their pro-rata share of

damages if the defendant’s share is

more than that due to the plaintiff’s

contributory negligence.

Good samaritan liability—Licensed

physicians who render emergency assistance are not liable to a person injured unless they were grossly negligent or their conduct was willful and

wanton.

Volunteer and nonprofit liability—

Generally exempting volunteers and

nonprofit organizations from liability,

except for willful and wanton misconduct or from liability in an automobile accident to the extent of insurance coverage under the Colorado NoFault law.

In 1988, Colorado expanded upon

these reform with the Health Care

Availability Act. Colorado enacted

these reforms to ensure the continued

availability of health care, particularly

prenatal and obstetrical care, in Colorado. In 1988, facing rapidly escalating

malpractice premiums, many doctors

were quitting or limiting their practices and Coloradoans, particularly in

our rural areas, were facing reduced

choice and availability in health care.

Under the Colorado Health Care

Availability Act, these additional tort

reforms were enacted for medical malpractice actions:

Periodic payment of judgments—Requires payment of future damages in

excess of $150,000 by periodic payment.

A cap of $1 million on damages—Generally, Colorado now limits damages in

a medical malpractice action to a

present value of $1 million, inclusive of

the $250,000 cap on noneconomic damages. In imposing the cap, the Colorado

legislature made sure that money

would be available to injured persons

by imposing mandatory malpractice

insurance coverage on doctors and hospitals.

Voluntary pre-treatment arbitration

agreements—Allows a provider and patient to enter an agreement to arbitrate any dispute over the care before

the care is rendered. The Health Care

Availability Act sets forth several patient protections in regard to such

agreements.

Qualifications of expert witnesses—

Generally, the act requires that expert

witnesses in a medical malpractice action be licensed in the same medical

specialty as the defendant and familiar

with the applicable standards of care at

the time of the injury.

Punitive damages—Punitive damages

against a health care provider cannot

be claimed until after the substantial

completion of discovery and the plaintiff can establish prima facie proof of

fraud, malice or willful and wanton

conduct.

Statutes of limitation—The general

statute of limitations in Colorado for

medical malpractice actions is 2 years

from the date of injury, or the date the

injury and its cause should reasonably

have been known. The Health Care

Availability Act reinstituted a ‘‘statute of repose’’ which bars any action

for medical malpractice being brought

more than 3 years after the date of

treatment.

In 1991, the Colorado Supreme Court

reviewed and upheld the constitutionality of these reforms in 1991.

The reforms have had their intended

effect. Malpractice insurance premiums for most Colorado physicians

have been reduced substantially, by 53

percent. For the average Colorado physician, their malpractice premiums
April 27, 1995 CONGRESSIONAL RECORD — SENATE S5855

were $18,609 in 1986. In 1994, the premiums were reduced to $8,816. For obstetricians in Colorado, the tort reforms reduced malpractice premiums

by over $30,000. In 1986, their premiums

were an astronomical $62,584, last year

they were $31,029. This is $30,000 of

overhead that the Colorado OB/GYN’s

now don’t have to cover and it allows

them to continue providing health

care, and delivering babies, in Colorado.

Colorado is only one of several States

that have enacted health care liability

reforms. California was the first, or one

of the first, with the Medical Injury

Compensation Act of 1975. Indiana

adopted some other different reforms

including a patient-victim compensation fund. Colorado followed the California model in 1988.

Overall: 22 States have enacted limits

for damages for pain and suffering; 28

States have either mandatory or discretionary collateral source rules; at

least 14 States require periodic payment of large damage awards and 16

States give the option to the court; 15

or so States have adopted medical malpractice arbitration provisions; some 30

States restrict punitive damages, and

around 33 have revised or abolished

joint and several liability.

It is most important to Colorado, and

other States which have enacted them,

to get to keep their tort reforms. We

can establish a Federal standard in

these areas, but States which have enacted more stringent reforms should

not be pre-empted by Federal law.

Senator MCCONNELL’s amendment allows States to keep their reforms. Most

importantly, the McConnell amendment would allow Colorado to keep its

$250,000 cap on noneconomic damages

and $1 million cap on health care liability damages and numerous of the

procedural reforms. However, the

McConnell amendment would impose

new requirements in Colorado in the

area of limitations on attorneys fees,

and may impose additional limitations

on punitive damages. Where Colorado

has acted to impose greater limitations

they are allowed to keep them, but

where Colorado laws are not as stringent they must follow Federal law.

Mr. President, I want to thank you

and I want to thank the other Members

of the body.

But I want to make this message

clear. What we are talking about is not

simply an arbitrary or theoretical exercise in trying to address the medical

malpractice question. What we are

talking about is an effort that can lead

to significant drops in medical malpractice insurance. We are talking

about something that will dramatically reduce the overhead of health

care providers. We are talking about

something that can have a very significant change in what consumers pay.

Thank you, Mr. President.

Mr. KYL addressed the Chair.

The PRESIDING OFFICER (Mr.

SANTORUM). The Senator from Arizona.

Mr. KYL. Mr. President, I would now

like to discuss the amendment which I

have just a moment ago offered, an

amendment which will complement

what the Senator from Colorado has

just spoken of by helping to get health

care costs under control, but, more importantly, to put a better balance into

the awards that are received in cases

where today the attorney is taking too

much of that award and the victim is

receiving too little of it.

My amendment is an amendment

which provides some very modest limitations on attorneys’ fees in the kinds

of cases in which very large awards

have sometimes been granted and

where, by virtue of the fact that the attorneys are awarded a contingent fee

or have arranged for a contingent fee

contract, they receive a percentage of

that award.

It is common in cases of this kind for

the percentage to be at least one-third

and frequently 50 percent, sometimes

even more, of the recovery. That means

that if a plaintiff in a case receives

$100,000 in an award, the attorney is

likely to receive somewhere between

$30,000, $40,000, $50,000, leaving the

plaintiff with frequently about half of

what is recovered.

There are some statistics in this regard which I would like to refer to

which indicate that actually the percentage that the attorneys’ fees are

taking is even greater. When you add

the other administrative fees of the

court and so on, you end up with a situation in which the victims frequently

get less than half the award the jury

thinks they are receiving.

This bill will, I hope, reform a situation that the Wall Street Journal

wrote of in an article recently—March

12, specifically—noting that the result

is that fees paid to plaintiffs’ lawyers

can range from $1,000 to $25,000 per

hour—Mr. President, per hour. Twentyfive thousand dollars is more than a lot

of Americans make in an entire year

and yet, as the article notes, some lawyers have made that much per hour

spent on a case. That is what we are

trying to avoid with this amendment.

A recent Department of Commerce

report stated that 40 cents of each dollar expended in litigation is paid in attorneys’ fees. A 1994 study by the Hudson Institute found that 50 cents out of

each litigation dollar went to attorneys’ fees.

So you see, Mr. President, the notion

that these attorneys’ fees, contingency

contracts, or agreements result in almost half, sometimes more than half,

of the award going to the attorney are

borne out by the studies that have been

performed professionally on this matter. And that is what we are trying to

change here.

I think, really, Mr. President, for our

tort system to retain, or to regain,

really, credibility as a fair and equitable dispute-resolution system, it has

to be more efficient, less litigious, and

we have to ensure that a larger portion

of the judgment awards actually goes

to the claimants rather than to the attorneys.

Now, some will say when I describe

this amendment in just a moment that

this is not really much of a limit on attorneys’ fees. Those who like to bash

lawyers will say you really have not

limited them.

My effort here is not to punish lawyers, but it is to try to ensure that

more of the money that the jury

awards goes into the pocket of the

claimant. As I said, today the typical

fee is at least a third, frequently at

least 50 percent.

I would like now to describe the

three different kinds of awards that

might be granted in a case and indicate

what the percentage in each case would

be under the underlying bill and under

my amendment.

Under the McConnell amendment,

which is essentially pending before us

here, the award is limited in a health

care liability case, typical medical

malpractice case, to one-third of the

first $150,000, and 25 percent of any

amount in excess of $150,000. So on the

first $150,000 you get a third and on

anything greater than that you get 25

percent.

Now this guarantees, Mr. President,

that there is an adequate incentive for

an attorney to take a small case, because for the economic damages—these

are damages that repay the doctor, the

hospital, and so on and also provides

for compensation for any economic

losses, time loss from work, inability

to perform work in the future and so

on—it guarantees that the attorney is

going to get a third of the first $150,000

and 25 percent of everything thereafter.

So there is adequate compensation for

a lawyer to take even a relatively

small case.

But cases usually involve another

element of damages called noneconomic damages. And these are the

so-called pain and suffering damages.

So that after a person has been compensated for the out-of-pocket expenses

to the hospitals and to the physicians

and so on and for any lost wages and

future lost economic earning power, juries also frequently—in serious cases

virtually always—award the claimant a

sum of money representing the pain

and suffering that that claimant suffered; the hurt, the anguish, the pain.

That award is frequently a multiple

of the economic damages. So in many

case, most cases, it exceeds the economic damages.

What my amendment says is that the

attorneys’ fees should be limited to 25

percent of that award up to $250,000. So,

in the case of the McConnell amendment, added onto the Kyl amendment

on attorneys’ fees, you would have essentially either 25 percent or 33 percent

as the limitation.

Now, as I say, compared to 50 percent, some people will say, ‘‘Well, you

haven’t really gone down all that

much.’’ But since some of the very high

awards are in excess of $250,000, we
S5856 CONGRESSIONAL RECORD — SENATE April 27, 1995

have denied the attorneys their windfall, their lottery award. They are

going to get plenty up to the $250,000,

but what they will not get is that big

bonanza, the jackpot, where they convince the jury that there is such an

egregious situation here that the

claimant gets, let us say $1 million,

and the lawyer then is going to get at

least a half a million. No. The claimant

in this case would get the bulk of that

$1 million, if that is the amount that is

awarded.

So what we are saying here is that

the lawyer is going to be limited but

guaranteed, in effect, a percentage of

both the economic damages and noneconomic damages, if they are otherwise awardable. They just cannot exceed either 33 percent or 25 percent.

In the case of the noneconomic damages, the pain and suffering damages,

they cannot exceed 25 percent of the

first $250,000, or in other words, $62,500.

Now in some cases, Mr. President,

there is a third kind of award and it is

punitive damages. There have been several statements made about punitive

damages and ways to limit punitive

damages. These are the damages not

intended to compensate the victim but

rather to punish the defendant for

wrong conduct, conduct that is very

wrong, that is willful or malicious, is

in great disregard of the rights of the

public and intended to cause a defendant never to do it again or, in the case

of a defective product, for example, to

fix that product and never allow a defective product again to hit the market.

In those cases, there are limits in the

underlying bill on the amount of punitive damages that can be collected.

Under the McConnell amendment, the

total award for punitive damages in

the medical malpractice kind of case is

either $250,000 or three times the economic damages, whichever is greater.

The Snowe amendment, which has been

presented just before my comments,

would limit the total award for punitive damages in these cases to two

times compensatory damages, which is

the sum of the economic and noneconomic damages. In either case,

there is some limit on the amount of

punitive damages.

The question is, should attorneys receive any percentage of that as well?

And what my amendment says is that

if the attorney believes that he or she

is entitled to a percentage of the punitive damages awards in addition to the

other two kinds of awards, that attorney may petition the court and the

court may grant reasonable and ethical

attorneys’ fees based upon the amount

of time that the attorney has put into

the case.

There is a presumption that 25 percent is reasonable. So, here again, the

attorney can petition the court, can

get at least 25 percent. A court may

even deem that a larger amount would

be warranted. But, in any event, it has

to be reasonable and ethical and based

upon the amount of work that the attorney put in.

So, as I say, Mr. President, some people will say, ‘‘Well, this is not much of

a limitation. You haven’t whacked the

attorneys. You haven’t cut them out of

all of their awards,’’ and so on. And we

have not.

The reason we are offering the

amendment this way is to guarantee

that people who have a good case can

get a lawyer to take their case, and

with these limitations they can clearly

get the lawyers to take their case.

But what it prevents is the situation

where the lawyer gets the bulk of the

recovery and, in the case of the very

large award, hits the jackpot, gets the

big bonanza, in effect.

The objectives of the overall legislation, Mr. President, are, first of all, to

ensure that people can be compensated

in our tort system. This bill helps to

guarantee that result.

We need incentives for lawyers to

take these kinds of cases which frequently the plaintiff cannot pay for by

the hourly rate or money up front to

the lawyer, so there has to be a contingency fee. We provide for that.

We need to ensure that in the case of

the economic damages, the lawyer is

limited in how much of those economic

damages can be recovered as attorney’s

fees. That is limited in the underlying

bill.

We are saying that with respect to

the pain and suffering damages, most

of that ought to go to the victim. Seventy-five percent of it ought to go to

the victim, the claimant, the plaintiff.

But, again, we allow up to $250,000 of

noneconomic damages, the recovery of

25 percent of that amount by the attorney and, as I said, in punitive damages,

the opportunity to collect fees there,

as well.

So the real question is whether lawyers should be getting 50 percent, or

somewhere between 25 and 33 percent.

And I think, Mr. President, that this

body will agree that placing some cap,

some limit, is desirable and that it will

help us to avoid the situation that

causes a great deal of public anger,

frankly, with our litigation process.

Ironically, I think we might even

help the legal profession, which is

being greatly criticized by the public

in public opinion surveys these days

primarily because of their fees. There

is a Hudson Institute study which

notes that there has been a doubling of

negative attitudes toward lawyers

since 1986 and that exorbitant attorney’s fees are a major factor in this increase in the public’s ill will for lawyers.

Ironically, we may even be helping

the legal profession, and that is not all

bad, either. We will be debating this

amendment, and others, on Monday

next, and I hope very much that all of

the Members of the Senate will reflect

on how this amendment, narrow that it

is, will improve the bill, will improve

the McConnell amendment, and will

improve the pending amendment before

the body and, as I said, allow the victims to recover more of what the juries

award to them.

Mr. President, I will debate and

present further arguments with respect

to this matter on Monday. At this

time, I would like to make a closing

statement on behalf of the leader.

ORDERS FOR MONDAY, MAY 1, 1995

Mr. KYL. Mr. President, I ask unanifmous consent that when the Senate

completes its business today, it stand

in adjournment until the hour of 11

a.m. on Monday, May 1, 1995; that following the prayer, the Journal of proceedings be deemed approved to date,

no resolutions come over under the

rule, the call of the calendar be waived,

the morning hour be deemed to have

expired, the time for the two leaders be

reserved for their use later in the day,

and there then be a period for the

transaction of morning business not to

extend beyond the hour of 12 noon,

with Senators permitted to speak for

up to 5 minutes each, with the following exceptions: Senator GREGG, 30 minutes; Senator GRAMS, 15 minutes.

Further, that at 12 noon, the Senate

immediately resume consideration of

H.R. 956, the product liability bill.

The PRESIDING OFFICER. Without

objection, it is so ordered.

Mr. KYL. Mr. President, for the inORDER OF PROCEDURE

fformation of all of our colleagues, the

leader has asked me to announce that

the Senate will return to session on

Monday. However, there will be no rollcall votes during Monday’s session.

Under the order, any Member who

wishes to offer a medical malpractice

amendment must offer and debate that

amendment on Monday. Any votes ordered on any of those amendments will

be stacked to occur at 11 a.m. on Tuesday.

ADJOURNMENT UNTIL MONDAY,

MAY 1, 1995, AT 11 A.M.

fMr. KYL. Mr. President, if there is no

further business to come before the

Senate, I now ask unanimous consent

that the Senate stand in adjournment

under the previous order.

There being no objection, the Senate,

at 8:14 p.m., adjourned until Monday,

May 1, 1995, at 11 a.m.

Executive nominations received by

NOMINATIONS

fthe Senate April 27, 1995:

THE JUDICIARY

GEORGE H. KING, OF CALIFORNIA, TO BE U.S. DISTRICT

JUDGE FOR THE CENTRAL DISTRICT OF CALIFORNIA,

VICE A NEW POSITION CREATED BY PUBLIC LAW 101–650,

APPROVED DECEMBER 1, 1990.

DONALD C. NUGENT, OF OHIO, TO BE U.S. DISTRICT

JUDGE FOR THE NORTHERN DISTRICT OF OHIO, VICE

THOMAS D. LAMBROS, RETIRED.