Contributed by Kristin Pawlik

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On June 27, the House of Delegates unanimously voted to accept the Legislation Committee’s recommendation that we, as an Association, fight and oppose “An Amendment to Limit Attorney Contingency Fees and Non-Economic Damages in Medical Lawsuits.” 

As the trusted leader of the legal profession in Arkansas, your Arkansas Bar Association is actively opposing the proposed Constitutional amendment entitled “An Amendment to Limited Attorney Contingency Fees and Non-Economic Damages in Medical Lawsuits.” This amendment will adversely affect the administration of justice and the practice of law.

The mission statement of the Arkansas Bar Association proclaims that we, as members and the association as a whole, work to Advocate Justice by:

• Leading efforts to maintain a fair and impartial judiciary;
• Supporting efforts to provide access to justice by persons with limited means; and
• Promoting fairness and equality in the application of justice.

With the mission in mind, the members of the Legislation Committee evaluate each piece of legislation proposed to the General Assembly. During the interim we study the various ballot initiatives, including proposed amendments to the Constitution of the State of Arkansas.

The Committee has reviewed and studied the proposed ballot initiative known originally by the popular name, “The Lawsuit Reform Amendment of 2016.” A review of the initiative by Attorney General Leslie Rutledge determined that the popular name was “partisan,” citing case law which identified language as “tinged with partisan coloring” as that which “gives the voter only the impression that the proponents of the proposed amendment wish to convey of the activity represented by the words,” and instead substituted “a more suitable, complete and correct popular name.” The proposed measure is now known as “An Amendment to Limit Attorney Contingency Fees and Non-Economic Damages in Medical Lawsuits.”

Proponents of this Amendment, including Health Case Access for Arkansas – a group whose name is “tinged with partisan color” and funded, for the most part, by a $250,000 contribution from the nursing home industry’s lobbying group – have announced that they’ve obtained the magic number of signatures needed to gain a coveted spot on the November ballot.

The leading proponent of the measure is capable and willing to spend millions to try to limit his liability for the negligent treatment of patients in his nursing homes is well-documented, ‘as are his failed attempts at convincing our elected legislators to assist him, whether in the backroom or on the floor of the General Assembly,’

Your bar is an association of 5,600 lawyers statewide who represent individuals, companies, municipalities, and regulatory bodies when they sue or are sued. Our interests are broad and varied in practice, but out mission unites us. Sixteen years ago, your Arkansas Bar Association and its individual members fought hard for Amendment 80, which conferred to the Arkansas Supreme Court the exclusive power to set rules, practices, and procedures for all of the courts and reaffirmed our commitment to preserving the right to trial by jury. Efforts to remove this authority, to limit it, or to make it subject to legislative approval have historically failed.

The House of Delegates is the policymaking body of the Association, and its members are elected from every geographical district in the state. It is comprised of all manner of practitioners: plaintiffs’ lawyers, defense counsel, judges, in-house counsel, government attorneys and private business owners. On June 17, 2016, the House unanimously voted to accept the Legislation Committee’s recommendation that we, as an Association, fight and oppose this initiated measure. This vote is a clear call to the membership that we must engage in vigorous efforts to oppose this measure.

Here’s why:

The proposed amendment specifically prohibits the practice of contracting for or charging “excessive” contingency fees by lawyers who represent people seeking damages in an action for medical injury against a health-care provider. Proponents say this measure would keep lawyers from taking advantage of clients. Our Rules of Professional Conduct already require us to charge only reasonable fees. Contingency contracts are a tool of fair play, a means to allow those who have little or nothing beyond the damages they’ve suffered as a result of someone else’s conduct or omission to access the judicial system, and our profession demands that those contracts be reasonable. However, “excessive” is defined by this measure as any fee greater than 33 1/3 % of the amount recovered. This limit is the same whether the case results in a settlement, arbitrated agreement, or jury verdict. Lawyers who have prosecuted or defended medical injury cases understand the complexity required in researching, preparing, and trying these difficult actions. Limiting the contingency fee to 33 1/3 % will restrict the number of qualified attorneys willing to represent the injured. But that’s precisely the point of the measure. Under this amendment, a lawyer would be prohibited from entering into a contract with a client with a fee greater than 33 1/3 % of the recovery. In fact, the measure authorizes the legislature to enact laws to enforce this limit and to provide for consequences and penalties against attorneys who contract for more that 33 1/3% of a recovery.

There is no limit to fees charged by the health care provider’s lawyer. There is no limit to the number of lawyers or law firms the nursing home may hire to defend against the lawsuit.

Removing a lawyer’s ability to contract with the client for a reasonable fee is only one prong of the attack. This amendment would also restrict non-economic damages – those meant to compensate victims for trauma, disfigurement, and pain and suffering – to $250,000. The proposal mandate that the legislature enact a cap on these damages in the 2017 Regular Session. This means that no matter how horrific the injury, no matter how prolonged the suffering, no matter how preventable the death, the health care provider is out at $250,000 a pop. If the injured person is, say, elderly, frail, and dies because of an injury in the nursing home, economic damages don’t factor in. Similarly, if the injured person is a young child, poor, disabled, a homemaker – the worth of their claim is limited to the cap.

And there’s evidence that these types of limits on damages affect women more than men. The injuries that women suffer – loss of limitation of fertility, complications of pregnancy, reproductive harm – can’t be measured in economic terms. Overall, men tend to be awarded a greater total recovery, but juries consistently return verdicts which award more non-economic damages to women rather than men. Further, non-economic damages make up a higher percentage of the total recovery for women than for men. The limit on contingent fees becomes exponentially more restrictive for these folks, as the limited recovery makes it even more difficult for injured people with meritorious cases to convince a lawyer to file. Citizens whose access to justice is already historically limited can expect the courtroom door to slam in their faces if this measure is successful.

The American Bar Association has studied these issues and predicts the same outcome. The appointed Task Force on Contingencies studied similar provisions to cap attorney fees and damage awards. It found that these provisions were not about making sure there was justice in the outcomes, but rather were about creating an un-level playing field. If this amendment passes, the playing field will be a mountainside with the nursing home owners a couple hundred feet up, kicking rocks down at the patients below.

Article 2, Section 7 of the Constitution of the State of Arkansas promises that “the right of trial by jury shall remain inviolate, and shall extend to all cases at law, without regard to the amount in controversy.” Though the proponents have included specific language that “this amendment does not supersede or amend the right to trial by jury,” it most assuredly does.

This proposal will limit the access of injured people of lesser means, women, the elderly and the disabled to the court system and to the right to trial by jury.

Join your trusted leadership, your delegates, and your fellow members as we advocate against this initiated attack on the Arkansas Constitution, our fair system of justice and equal access to the courts.