1.1                          A bill for an act 
  1.2             relating to civil actions; providing a statute of 
  1.3             limitations for claims against accountants; limiting 
  1.4             liability for noneconomic losses and attorney 
  1.5             contingency fees for actions against health care 
  1.6             providers and medical product manufacturers; limiting 
  1.7             punitive damage awards; providing for payment of 
  1.8             attorney fees in certain cases; modifying waiver of 
  1.9             medical privilege; limiting joint and several 
  1.10            liability; amending Minnesota Statutes 1994, sections 
  1.11            549.01; 549.20, by adding a subdivision; 549.21, by 
  1.12            adding a subdivision; 595.02, subdivision 5; and 
  1.13            604.02, subdivision 1, and by adding a subdivision; 
  1.14            proposing coding for new law in Minnesota Statutes, 
  1.15            chapters 541; and 548. 
  1.16  BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.17     Section 1.  [541.24] [LIMITATION ON CLAIMS AGAINST 
  1.18  ACCOUNTANTS.] 
  1.19     (a) This section governs an action based on negligence or 
  1.20  breach of contract brought against an accountant, a partnership 
  1.21  of accountants, or an accounting corporation practicing in this 
  1.22  state, or any of its employees, partners, members, officers, or 
  1.23  shareholders, by a person or entity claiming to have been 
  1.24  injured as a result of financial statements or other information 
  1.25  examined, compiled, reviewed, certified, audited, or otherwise 
  1.26  reported or opined on by the defendant accountant as a result of 
  1.27  an engagement to provide public accountancy services. 
  1.28     (b) An action may not be brought unless the suit is 
  1.29  commenced on or before the earlier of: 
  1.30     (1) two years from the date the alleged act, omission, or 
  2.1   neglect is discovered or should have been discovered by the 
  2.2   exercise of reasonable diligence; 
  2.3      (2) three years after completion of the service for which 
  2.4   the suit is brought has been performed; or 
  2.5      (3) three years after the date of the initial issuance of 
  2.6   the accountant's report on the financial statements or other 
  2.7   information. 
  2.8      Sec. 2.  [548.061] [NONECONOMIC LOSSES; LIMITATION; 
  2.9   LIABILITY OF A HEALTH CARE PROVIDER OR MEDICAL PRODUCT 
  2.10  MANUFACTURER.] 
  2.11     Subdivision 1.  [DEFINITIONS.] (a) For purposes of this 
  2.12  section, the following terms have the meanings given them. 
  2.13     (b) "Health care provider" means a physician, surgeon, 
  2.14  dentist, or other health care professional or hospital, 
  2.15  including all persons or entities providing health care as 
  2.16  defined in section 145.61, subdivisions 2 and 4, or a certified 
  2.17  health care professional employed by or providing services as an 
  2.18  independent contractor in a hospital. 
  2.19     (c) "Medical product" means a medical device, drug, or 
  2.20  medical supply. 
  2.21     Subd. 2.  [LIMITATION ON DAMAGES.] In an action for injury 
  2.22  against a health care provider based on professional negligence 
  2.23  or an action against a medical product manufacturer for injury 
  2.24  arising out of the use of a medical product, the injured 
  2.25  plaintiff may recover noneconomic losses to compensate for pain, 
  2.26  suffering, inconvenience, physical impairment, disfigurements, 
  2.27  and other nonpecuniary damage in an amount not to exceed 
  2.28  $250,000. 
  2.29     Sec. 3.  Minnesota Statutes 1994, section 549.01, is 
  2.30  amended to read: 
  2.31     549.01 [AGREEMENT AS TO FEES OF ATTORNEY.] 
  2.32     Subdivision 1.  [DEFINITIONS.] (a) For purposes of this 
  2.33  section, the following terms have the meanings given them. 
  2.34     (b) "Contingency fee" means a fee for professional legal 
  2.35  services that is in whole or in part dependent upon the recovery 
  2.36  of any amount of damages, whether through judgment or settlement.
  3.1      (c) "Health care provider" means a physician, surgeon, 
  3.2   dentist, or other health care professional or hospital, 
  3.3   including all persons or entities providing health care as 
  3.4   defined in section 145.61, subdivisions 2 and 4, or a certified 
  3.5   health care professional employed by or providing services as an 
  3.6   independent contractor in a hospital. 
  3.7      (d) "Medical product" means a medical device, drug, or 
  3.8   medical supply. 
  3.9      Subd. 2.  [FEES GENERALLY.] Except as provided in 
  3.10  subdivision 3, a party shall have an unrestricted right to agree 
  3.11  with an attorney as to compensation for services, and the 
  3.12  measure and mode thereof; but certain sums may be allowed to the 
  3.13  prevailing party for expenses in an action, which are termed 
  3.14  costs.  
  3.15     Subd. 3.  [CONTINGENCY FEES; ACTIONS AGAINST A HEALTH CARE 
  3.16  PROVIDER OR MEDICAL PRODUCT MANUFACTURER.] (a) An attorney may 
  3.17  not contract for or collect a contingency fee for representing a 
  3.18  person seeking damages in connection with an action against a 
  3.19  health care provider based upon the provider's alleged 
  3.20  professional negligence or against a medical product 
  3.21  manufacturer for damages arising out of the use of a medical 
  3.22  product, in excess of the following limits: 
  3.23     (1) 40 percent of the first $50,000 recovered; 
  3.24     (2) 33-1/3 percent of the next $50,000 recovered; 
  3.25     (3) 20 percent of the next $400,000 recovered; and 
  3.26     (4) ten percent of any amount in which the recovery exceeds 
  3.27  $500,000. 
  3.28     The limitations apply regardless of whether the recovery is 
  3.29  by settlement, arbitration, or judgment, or whether the person 
  3.30  for whom the recovery is made is a responsible adult, an infant, 
  3.31  or a person of unsound mind. 
  3.32     (b) An attorney may not receive contingency fees on any 
  3.33  portion of an award under paragraph (a) for noneconomic or 
  3.34  punitive damages. 
  3.35     (c) In the event that the judgment or settlement includes 
  3.36  periodic or future payments of damages, the amount recovered for 
  4.1   purposes of this subdivision is the cost of the annuity or trust 
  4.2   established to make the payments, or if there is no annuity or 
  4.3   trust, the present value of the payments. 
  4.4      (d) A fee contracted for in violation of this subdivision 
  4.5   is void and unenforceable.  A claimant affected by a violation 
  4.6   of this subdivision may bring an action in the court in which 
  4.7   the claim was or could have been brought, for damages in the 
  4.8   amount of three times the fee improperly contracted for or 
  4.9   collected, reasonable attorney fees, and other relief to which 
  4.10  the person may be entitled. 
  4.11     Sec. 4.  Minnesota Statutes 1994, section 549.20, is 
  4.12  amended by adding a subdivision to read: 
  4.13     Subd. 6.  [LIMITATIONS ON PUNITIVE DAMAGE AWARDS.] No court 
  4.14  shall issue an order for judgment for an award of punitive 
  4.15  damages that is in excess of three times of the compensatory 
  4.16  damages awarded by the jury or $250,000, whichever is greater. 
  4.17     Sec. 5.  Minnesota Statutes 1994, section 549.21, is 
  4.18  amended by adding a subdivision to read: 
  4.19     Subd. 3.  [AWARD OF ATTORNEY FEES IF SETTLEMENT 
  4.20  REJECTED.] The losing party in any civil action is liable for 
  4.21  the attorney fees of the winning party, but only when the party 
  4.22  rejects a settlement offer more favorable than the resulting 
  4.23  jury award.  The court may waive the fee shifting when it would 
  4.24  be manifestly unjust or when the case presents a question of law 
  4.25  or of fact that is novel and important and substantially affects 
  4.26  nonparties.  The losing party is not liable to the winning party 
  4.27  for more than the cost or value of the losing party's own legal 
  4.28  services in the action. 
  4.29     Sec. 6.  Minnesota Statutes 1994, section 595.02, 
  4.30  subdivision 5, is amended to read: 
  4.31     Subd. 5.  [WAIVER OF PRIVILEGE FOR HEALTH CARE PROVIDERS.] 
  4.32  A party who commences an action makes a claim or files a lawsuit 
  4.33  for malpractice, error, mistake, or failure to cure, whether 
  4.34  based on contract or tort, against a health care provider on the 
  4.35  person's own behalf or in a representative capacity, waives in 
  4.36  that action any privilege existing under subdivision 1, 
  5.1   paragraphs (d) and (g), as to any information or opinion in the 
  5.2   possession of a health care provider who has examined or cared 
  5.3   for the party or other person whose health or medical condition 
  5.4   has been placed in controversy in the action.  This waiver must 
  5.5   permit all parties to the action, and their attorneys or 
  5.6   authorized representatives, to informally discuss the 
  5.7   information or opinion with the health care provider if the 
  5.8   provider consents.  Prior to an informal discussion with a 
  5.9   health care provider, the defendant must mail written notice to 
  5.10  the other party at least 15 days before the discussion.  The 
  5.11  plaintiff's attorney or authorized representative must have the 
  5.12  opportunity to be present at any informal discussion.  
  5.13  Appropriate medical authorizations permitting discussion must be 
  5.14  provided by the party commencing the action upon request from 
  5.15  any other party. 
  5.16     A health care provider may refuse to consent to the 
  5.17  discussion but, in that event, the party seeking the information 
  5.18  or opinion may take the deposition of the health care provider 
  5.19  with respect to that information and opinion, without obtaining 
  5.20  a prior court order. 
  5.21     For purposes of this subdivision, "health care provider" 
  5.22  means a physician, surgeon, dentist, or other health care 
  5.23  professional or hospital, including all persons or entities 
  5.24  providing health care as defined in section 145.61, subdivisions 
  5.25  2 and 4, or a certified health care professional employed by or 
  5.26  providing services as an independent contractor in a hospital. 
  5.27     Sec. 7.  Minnesota Statutes 1994, section 604.02, 
  5.28  subdivision 1, is amended to read: 
  5.29     Subdivision 1.  When two or more persons are jointly 
  5.30  liable, contributions to awards shall be in proportion to the 
  5.31  percentage of fault attributable to each, except that each is 
  5.32  jointly and severally liable for the whole award.  Except in 
  5.33  cases where liability arises under chapters 18B - pesticide 
  5.34  control, 115 - water pollution control, 115A - waste management, 
  5.35  115B - environmental response and liability, 115C - leaking 
  5.36  underground storage tanks, and 299J - pipeline safety, public 
  6.1   nuisance law for damage to the environment or the public health, 
  6.2   any other environmental or public health law, or any 
  6.3   environmental or public health ordinance or program of a 
  6.4   municipality as defined in section 466.01, a person whose fault 
  6.5   is 15 30 percent or less is liable for a percentage of the whole 
  6.6   award no greater than four times the percentage of fault, 
  6.7   including any amount reallocated to that person under 
  6.8   subdivision 2. 
  6.9      If the state or a municipality as defined in section 466.01 
  6.10  is jointly liable, and its fault is less than 35 percent, it is 
  6.11  jointly and severally liable for a percentage of the whole award 
  6.12  no greater than twice the amount of fault, including any amount 
  6.13  reallocated to the state or municipality under subdivision 2. 
  6.14     Sec. 8.  Minnesota Statutes 1994, section 604.02, is 
  6.15  amended by adding a subdivision to read: 
  6.16     Subd. 4.  [APPORTIONMENT OF DAMAGES; MEDICAL 
  6.17  MALPRACTICE.] Notwithstanding subdivisions 1 to 3, for purposes 
  6.18  of medical malpractice action or actions against a manufacturer 
  6.19  arising out of the use of medical device, drug, or medical 
  6.20  supply, when two or more persons are jointly liable, 
  6.21  contributions to awards must be in proportion to the percentage 
  6.22  of fault attributable to each. 
  6.23     Sec. 9.  [EFFECTIVE DATE; APPLICATION.] 
  6.24     Sections 1, 2, 3, and 6, are effective August 1, 1996, and 
  6.25  apply to actions commenced on or after that date.  Section 7 is 
  6.26  effective August 1, 1996, and applies to causes of action 
  6.27  arising on or after that date.