N.C. House Approves Changing Personal Injury Awards

The Associated Press, May 18, 2009, By Gary D. Robertson

RALEIGH, N.C. - In North Carolina courts, an injured person hurt in a car accident or slipping on a wet floor can't recover damages in court if a jury determines the plaintiff was even slightly to blame for the trouble.

An effort to change that rule of civil litigation so the plaintiff gets an award proportionate to the defendant's percentage of fault has gained traction this year through an unusual coalition of trial lawyers and Republican lawmakers.

The proposal is a dramatic potential change on litigation and insurance settlements. About one-third of the 27,200 civil lawsuits filed in Superior Court last fiscal year were negligence cases, and most of those involved motor vehicles, according to state data.

"It could happen to anybody," said Rep. John Blust, R-Guilford, one of the primary sponsors of the tort reform legislation that passed the House 72-43 last week. "You can get absurd situations that are just not just."

Business interests are still wary of shifting from the current "contributory negligence" standard. They said it has worked relatively well and will raise insurance premiums considered among the lowest in the country because more claims will be paid.

"We believe that in these economic times that's a bad move," said Jennifer Cohen, executive director of the Insurance Federation of North Carolina, representing the largest insurers in the state. "If you shift the liability, it's going to affect those insurance rates."

North Carolina is one of only four states and the District of Columbia that still apply the current standard. It originates from a common law ruling in early 19th century England, said Charles Daye, a University of North Carolina law school professor and torts expert.

The other 46 states have moved over the past 100 years to variations of a "comparative fault" standard.

For example, if a judge or jury determines the plaintiff is entitled to $100,000 in damages but finds the injured person 25 percent at fault and the defendant 75 percent to blame, the plaintiff is awarded 25 percent less, or $75,000.

Under the current contributory negligence system, a plaintiff could recover nothing even if the person is 1 percent to blame for what happened — maybe the injured person failed to read a warning sign or edged the car's nose out into an intersection.

That standard prevents many cases from going to trial and insurance companies from paying claims, said Paul Pulley, a lobbyist for North Carolina Advocates for Justice, a group representing the state's trial lawyers.

Rep. Johnathan Rhyne, R-Lincoln and an attorney who opposed the House bill, said the 1 percent liability question "only really exists in a law book somewhere." In the real world, he told colleagues during last week's debate, jurors have enough common sense to find a way to award something to someone who is only 1 percent at fault for an injury.

Insurance officials point to one study showing that states that shifted to the comparative fault standard saw automobile insurance premiums that were from 23 percent to 47 percent higher than in states with contributory negligence. Pulley said any increase would be much smaller.

Nineteen Republicans joined a majority of Democrats in passing the bill through the House for the first time in nearly 30 years, according to legislative observers. The bill now heads to the Senate, where a companion bill also has some bipartisan support.

Changes were made to assuage the state's business leaders, but they still aren't pleased.

For example, plaintiffs would still receive nothing if they are found at least 50 percent at fault.
"We're still concerned that if you're looking at changing the civil liability system, this particular bill doesn't yet have the balance we'd like to see," said John McAlister, a lobbyist for the North Carolina Chamber. "We just want to make sure it's fair to defendants as well as to plaintiffs."

The tort reform advocates' most influential spokeswoman may be Pat Gates of Greensboro. She got the state's hit-and-run law changed when her son, Stephen, was killed in 2003 when a sport-utility vehicle struck him as he examined a flat tire on his car on an Interstate 40 entrance ramp in Orange County.

On the day after his funeral, she said, the insurance company of the owner of the car that struck her son told her family it wouldn't collect any damages in court because his car's left tire sat a few inches on the edge of the ramp.

The family sued, and ultimately settled out of court on the day of the civil trial. She knew little about contributory negligence until her family's grief.

"It's not something that people really understand," she said