ASSEMBLY, No. 3056
STATE OF NEW JERSEY
210th LEGISLATURE
INTRODUCED NOVEMBER 25, 2002
Sponsored by:
Assemblyman NEIL M. COHEN
District 20 (Union)
SYNOPSIS
Concerns certain procedures in medical malpractice actions.
CURRENT VERSION OF TEXT
As introduced.
An Act concerning certain procedures for medical malpractice actions.
Be It Enacted by the Senate and General Assembly of the State of New Jersey:
1. The Legislature finds that:
a. Recent disruptions in the medical malpractice insurance market have resulted in sharply escalating premiums, a reduction in the availability of coverage, and the insolvency or withdrawal from the market of several medical malpractice insurers with substantial market shares in the State; and
b. The proliferation of expensive lawsuits against physicians has combined with an adverse economic climate to cause premiums to reach an unaffordable level, resulting in physicians moving away from higher-risk specialities, and in some cases, leaving the practice of medicine entirely; and
c. The complex nature of medical malpractice litigation is one of the principal factors driving up the cost of coverage because, subsequent to a lawsuit being filed, an expensive and sometimes protracted discovery process must take place before a case comes to trial; and
d. Under present practice, factual information regarding the validity of an allegation of malpractice is not available until a lawsuit is actually filed, including whether or not procedures followed by a physician are within generally accepted professional guidelines, or whether an individual named as a defendant in a case in which there are multiple defendants is a party to the alleged malpractice; and
e. It is therefore essential to establish procedures which will provide all parties to a potential suit with a process which will provide: sufficient factual information regarding a charge of alleged medical malpractice; an opportunity to dispose of the case in the most efficient and cost effective manner possible, including earlier opportunity for the exchange of information; and settlement or other disposition of the allegations, in order to reduce the cost of the litigation, and therefore the premiums paid by physicians and other health care providers.
2. As used in this act:
"Claimant" means any person who has a cause of action arising from medical malpractice.
"Economic damages" means financial losses which would not have occurred but for the injury giving rise to the cause of action for medical malpractice, including, but not limited to, past and future medical expenses and wage loss and loss of earning capacity.
"Health care provider" means any person licensed in this State to practice medicine and surgery, chiropractic, podiatry, dentistry, optometry, psychology, pharmacy, nursing, physical therapy or as a bioanalytical laboratory director, or a hospital or other health care facility or health care agency.
"Medical expert" means a person duly and regularly engaged in the practice of his or her profession who holds a health care professional degree from a university or college and has had special professional training and experience or one possessed of special health care knowledge or skill about the subject upon which he or she is called to testify or provide an opinion.
"Medical malpractice" means a negligent act or omission to act by a health care provider in the rendering of professional services, which act or omission is the proximate cause of a personal injury or wrongful death.
"Noneconomic damages" means nonfinancial losses which would not have occurred but for the injury giving rise to the cause of action, including pain and suffering, inconvenience, physical impairment, mental anguish, disfigurement, loss of capacity for enjoyment of life, and other nonfinancial losses.
3. a. Prior to filing a claim for medical malpractice, a claimant shall notify each health care provider who may be a prospective defendant by certified mail, return receipt requested, of intent to initiate litigation for medical malpractice.
b. No suit may be filed for a period of 90 days after notice pursuant to subsection a. of this section is mailed to any such prospective defendant. During the 90-day period, the parties shall engage in an informal presuit discovery process.
4. During the 90-day period established in section 3 of this act, the statute of limitations is tolled as to all health care providers notified pursuant to subsection a. of section 3 of this act. Upon stipulation by the parties, the 90-day period may be extended and the statute of limitations is tolled during any such extension. Upon receiving notice of termination of negotiations in an extended period, the claimant shall have 60 days or the remainder of the period of the statute of limitations, whichever is greater, within which to file suit.
5. a. Upon receipt by a prospective defendant of a notice of claim, the parties shall make discoverable information available without formal discovery. Failure to do so is grounds for dismissal of claims or defenses ultimately asserted.
b. Except as otherwise provided in subsection d. of this section, statements, discussions, written documents, reports, or other work products generated by the informal presuit discovery process shall not be discoverable or admissible in any civil action for any purpose by the opposing party.
c. All participants, including, but not limited to, health care providers, investigators, witnesses, and employees or associates of the defendant, are immune from civil liability arising from participation in the informal presuit discovery process.
d. Informal presuit discovery may be used by a party to obtain unsworn statements, the production of documents or things, and physical and mental examinations relevant to the alleged malpractice, as follows:
(1) Unsworn statements: Any party may require other parties to appear for the taking of an unsworn statement. Such statements may be used only for the purpose of informal presuit discovery and are not discoverable or admissible in any civil action for any purpose by any party. A party desiring to take the unsworn statement of any party shall give reasonable notice in writing to all parties. The notice shall state the time and place for taking the statement and the name and address of the party to be examined. Unless otherwise impractical, the examination of any party shall be done at the same time by all other parties. Any party may be represented by counsel at the taking of an unsworn statement. An unsworn statement may be recorded electronically, stenographically or on videotape.
(2) Documents or things: Any party may request discovery of documents or things. The documents or things shall be produced, at the expense of the requesting party, within 20 days after the date of receipt of the request. A party shall, upon request, produce discoverable documents or things within that party's possession or control.
(3) Physical and mental examinations: A prospective defendant may require an injured prospective claimant to appear for examination by an appropriate health care provider. The defendant shall give reasonable notice in writing to all parties as to the time and place for examination. Unless otherwise impractical, a prospective claimant is required to submit to only one examination on behalf of all potential defendants. The practicality of a single examination shall be determined by the nature of the potential claimant's condition, as it relates to the liability of each potential defendant. Such examination report shall be available to the parties and their attorney's, upon payment of the reasonable costs of reproduction, and shall be used only for the purpose of informal presuit discovery. Otherwise, such examination report is confidential.
6. Each request for and notice concerning informal presuit discovery pursuant to this act shall be in writing, and a copy thereof shall be sent to all parties. Such a request or notice shall bear a certificate of service identifying the name and address of the person to whom the request or notice is served, the date of the request or notice, and the manner of service thereof.
7. a. Copies of any medical record relevant to any action alleging medical malpractice or defense shall be provided to a claimant or a defendant, or to the attorney thereof, at a reasonable charge within 10 business days of a request for copies. It shall not be grounds to refuse copies of medical records that they are not yet completed or that a medical bill is still owing.
b. Failure to provide copies of medical records, or failure to make the charge for copies a reasonable charge, shall constitute evidence of failure of that party to comply with good faith informal presuit discovery requirements.
c. A health care provider shall not be held liable for any civil damages as a result of complying with this section.
8. Copies of any documents produced in response to the request of any party shall be served upon all other parties. The party serving the documents or his or her attorney shall identify, in a notice accompanying the documents, the name and address of the parties to whom the documents were served, the date of service, the manner of service, and the identity of the document served.
9. a. For the purposes of this section:
"Annuity" means an annuity issued by an insurer licensed or authorized to do business in this State which is a qualified assignment under section 130 of the federal Internal Revenue Code of 1986, 26 U.S.C. s. 130;
"Future damages" means economic and noneconomic damages which may arise or be incurred after the date on which a judgment or settlement is entered into in an action involving medical malpractice, which shall include future medical treatment, care or custody, loss of earnings, loss of bodily function or damages for noneconomic loss;"Judgment creditor" means a claimant who is the recipient of an award for economic or noneconomic damages, or both, that is the result of an action filed against a health care provider for medical malpractice, which award is subject to the provisions of subsection b. of this section;
"Judgment debtor" means a health care provider who, as a defendant in an action brought for medical malpractice, is required to pay the claimant an award that is subject to the provisions of this section;
"Structured settlement" means an agreement made to settle a claim or lawsuit or respond to a judgment in an action brought for medical malpractice by an injured person whereby a series of periodic payments, rather than a lump sum payment, are made over time to a claimant, in accordance with the needs of the claimant or his family, either through the purchase of an annuity or the establishment of a trust fund, or by another means approved by the court.
b. (1) In any judgment resulting from any medical malpractice action brought by a claimant for medical malpractice in which the damages are less than $1,000,000, the court shall enter a judgment ordering that the money damages, or their equivalent for future damages, shall be paid immediately.
(2) In any judgment resulting from any medical malpractice action brought by a claimant for medical malpractice in which the damages exceed $1,000,000, the court shall enter a judgment ordering that 50% of the money damages for economic and noneconomic loss, or their equivalent for future damages, shall be paid immediately, with the costs and attorney's fees paid from that amount. The remaining 50% of the judgment shall be paid over 36 months in the form of a structured settlement by any person, organization, group, or insurer that is contractually liable to pay the judgment.
c. The structured settlement agreement shall specify the recipient of the payments, the dollar amount of the payments, the interval between payments, the number of payments or the period of time over which payments are to be made and the persons to whom money damages are owed, if any, in the event of the judgment creditor's death.
d. In the event of the judgment creditor's death, any amounts attributable to the future medical treatment, care or custody, loss of bodily function, or pain and suffering of the deceased judgment creditor and any money damages awarded for loss of future earnings shall not be reduced, nor payments terminated, by reason of the death of the judgment creditor, but shall be paid to persons to whom the judgment creditor owed a duty of support, as provided by law, immediately prior to the judgment creditor's death, or if none, to the judgment creditor's estate.
e. The judgment debtor shall be required to post a bond or security or otherwise to assure full payment of the damages awarded. A bond is not adequate unless it is written by a company authorized to do business in this State and is rated A+ by A.M. Best Company. If the judgment debtor is unable to adequately assure full payment of the judgment, the judgment, reduced to present value, shall be paid to the claimant in a lump sum. No bond may be canceled or be subject to cancellation unless at least 60 days' advance written notice is filed with the court and the claimant. Upon termination of periodic payments, the security, or so much as remains, shall be returned to the judgment debtor.
f. Upon the purchase of an annuity, establishment of a trust, or approval of another arrangement for periodic payments by a court, any obligation of the judgment debtor with respect to the judgment shall cease.
10. Within 90 days of the effective date of this act, every insurer authorized to transact medical malpractice liability insurance in this State, and that issues or renews a policy of medical malpractice liability insurance on or after that date, shall provide a premium reduction to its insureds which shall reflect the provisions of this act.
11. This act shall take effect immediately and shall apply to any cause of action for medical malpractice arising on or after that date.
STATEMENT
This bill establishes procedures for the more expeditious discovery and disposition of medical malpractice claims in order to reduce the costs of litigation, and therefore ultimately, the premiums paid by physicians and other health care providers for medical malpractice liability insurance.
The bill requires a person contemplating commencement of an action for medical malpractice to notify each health care provider who may be a prospective defendant in writing of the proposed action at least 90 days before the action is filed. During this 90-day period, the statute of limitations is tolled as to each health care provider notified, and the parties shall engage in an informal presuit discovery process.
Under this informal presuit discovery process, statements, discussions, written documents, reports or other work products generated shall not be discoverable or admissible in any civil action for any purpose by an opposing party. The bill establishes parameters with respect to this informal process for obtaining unsworn statements, the production of documents and things, and physical and mental evaluations.
The bill also provides that copies of any relevant medical records shall be provided within 10 business days of a request. The fact that medical records are not yet completed or a medical bill is still owing does not constitute grounds to refuse copies of medical records. The bill further provides that failure to provide copies of medical records, or failure to make the charge for copies reasonable, shall constitute evidence of failure of that party to comply with good faith informal presuit discovery requirements.
Finally, the bill provides that in any medical malpractice judgment in which the damages are less than $1,000,000, the court shall enter a judgment ordering that money damages shall be paid immediately. The bill also establishes that in any judgment in which the damages exceed $1,000,000, 50% of the money damages shall be paid immediately, with the costs and attorney's fees paid from that amount. The remaining 50% of the judgment shall be paid over 36 months in the form of a structured settlement.
With respect to the payment of damages, the bill requires he judgment debtor to post a bond or security or otherwise to assure full payment of the damages awarded. A bond is not adequate unless it is written by a company authorized to do business in this State and is rated A+ by A.M. Best Company.
Finally, the bill provides that within 90 days of the effective date of the bill, every insurer authorized to transact medical malpractice liability insurance in this State, and that issues or renews a policy of medical malpractice liability insurance on or after that date, shall provide a premium reduction to its insureds reflecting the cost-savings provisions of the bill.