The Chattanooga Times / Free Press

Ala. Senate Brings Business, Lawyers Together on Damage Limits in Lawsuits

By Phillip Rawls

The Associated Press

MONTGOMERY, Ala. -- The Alabama Senate brought business groups and plaintiff lawyers together for the first time to agree on a package of bills to limit lawsuits.

Gov. Don Siegelman said Friday the Senate "found a compromise that protects consumers and gives responsible businessmen and women the security they need and deserve that they are not going to lose their life's savings."

The Senate voted 34-0 Wednesday for two bills to limit where lawsuits can be filed and to make it harder to pursue class-action lawsuits. Then late Thursday night, the Senate voted 33-2 for a bill to place caps on punitive damage verdicts by juries.

The bills now go to the House, where all sides expect quick approval.

"I am ready to sign these bills," Siegelman said.

The bills marked the first major "tort reform" legislation passed by the Senate since 1987, when the Legislature put caps on punitive damage verdicts and then had them struck down by the Alabama Supreme Court.

The legislation does not cap compensatory damages, which are designed to make a person financially whole and which include financial loss, pain, suffering and mental anguish. Punitive damages are meant to punish conduct.

A series of huge punitive damage verdicts against insurance and finance companies had earned Alabama the reputation of "tort hell."

The climax came last Friday when a Hale County jury returned a $581 million verdict against Whirlpool Financial National Bank and Gulf Coast Electronics in a lawsuit over payments on satellite dishes. The compensatory damages were $975,000 and the punitive damages were $580 million. If this legislation had been in effect, the maximum punitive damages would have been $2.9 million.

Bill O'Connor, president of the Business Council, said the Hale County verdict "focused attention on this process and helped build momentum."

"The case in Hale County last week couldn't have been a better example of a need to address this," said Greg Breedlove, president of the Alabama Trial Lawyers Association.

Lt. Gov. Steve Windom agreed the Hale County case was a major ingredient in helping him keep his campaign promise to get the Senate to address lawsuit legislation.

"We're sending a message to businesses around the world that Alabama is open for business and you'll never see another $581 million verdict," he said.

Montgomery attorney Tom Methvin, who won the Hale County suit, said the legislation shouldn't have been passed. He said Alabama has the weakest consumer protection laws in the country, and "the threat of a big jury award is the only consumer protection you get."

Lawyers Involved: