1.1                          A bill for an act 
  1.2             relating to civil actions; regulating certain health 
  1.3             care provider actions; providing for periodic payments 
  1.4             of judgments; providing for certain jury instructions; 
  1.5             limiting contingency fees; limiting the amount of 
  1.6             damages for noneconomic loss; amending Minnesota 
  1.7             Statutes 2002, sections 549.01; 549.25; proposing 
  1.8             coding for new law in Minnesota Statutes, chapters 
  1.9             546; 548; 549. 
  1.10  BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.11     Section 1.  [546.155] [HEALTH CARE PROVIDER ACTIONS; JURY 
  1.12  INSTRUCTIONS ON TAXATION OF DAMAGES.] 
  1.13     In an action for injury or death against a health care 
  1.14  provider, as defined in section 549.22, alleging malpractice, 
  1.15  error, mistake, or failure to cure, whether based on a contract 
  1.16  or tort, the jury must be instructed on the issue of state and 
  1.17  federal taxation of any of the damages that may be awarded in 
  1.18  the action. 
  1.19     Sec. 2.  [548.37] [MEDICAL MALPRACTICE JUDGMENTS; PERIODIC 
  1.20  PAYMENTS.] 
  1.21     (a) In an action for injury or death against a health care 
  1.22  provider alleging malpractice, error, mistake, or failure to 
  1.23  cure, whether based on a contract or tort, a court shall, at the 
  1.24  request of either party, enter a judgment ordering that money 
  1.25  damages or its equivalent for future damages of the judgment 
  1.26  creditor be paid in whole or in part by periodic payments rather 
  1.27  than by a lump sum payment if the award equals or exceeds 
  2.1   $50,000 in future damages.  In entering a judgment ordering the 
  2.2   payment of future damages by periodic payments, the court shall 
  2.3   make a specific finding as to the dollar amount of periodic 
  2.4   payments which will compensate the judgment creditor for these 
  2.5   future damages.  As a condition to authorizing periodic payments 
  2.6   of future damages, the court shall require the judgment debtor 
  2.7   who is not adequately insured to post security adequate to 
  2.8   ensure full payment of the damages awarded by the judgment.  
  2.9   Upon termination of periodic payments of future damages, the 
  2.10  court shall order the return of this security, or so much as 
  2.11  remains, to the judgment debtor. 
  2.12     (b)(1) The judgment ordering the payment of future damages 
  2.13  by periodic payments must specify the recipient or recipients of 
  2.14  the payments, the dollar amount of the payments, the interval 
  2.15  between payments, and the number of payments or the period of 
  2.16  time over which payments must be made.  The payments must only 
  2.17  be subject to modification in the event of the death of the 
  2.18  judgment creditor. 
  2.19     (2) In the event that the court finds that the judgment 
  2.20  debtor has exhibited a continuing pattern of failing to make the 
  2.21  payments, as specified in clause (1), the court shall find the 
  2.22  judgment debtor in contempt of court and, in addition to the 
  2.23  required periodic payments, shall order the judgment debtor to 
  2.24  pay the judgment creditor all damages caused by the failure to 
  2.25  make the periodic payments, including court costs and attorney 
  2.26  fees. 
  2.27     (c) Periodic payments of future damages to the judgment 
  2.28  creditor, other than damages for loss of future earnings, cease 
  2.29  when the judgment creditor dies.  Money damages awarded for loss 
  2.30  of future earnings must not be reduced or payments terminated by 
  2.31  reason of the death of the judgment creditor, but must be paid 
  2.32  to persons to whom the judgment creditor owed a duty of support, 
  2.33  as provided by law, immediately before the judgment creditor's 
  2.34  death.  If no duty of support existed immediately before death, 
  2.35  all periodic payments of future damages cease upon death of the 
  2.36  judgment creditor.  In such cases, the court rendering the 
  3.1   original judgment, may, upon petition of any party in interest, 
  3.2   modify the judgment to award and apportion the unpaid future 
  3.3   damages in accordance with this section. 
  3.4      (d) Following the occurrence or expiration of all 
  3.5   obligations specified in the periodic payment judgment, any 
  3.6   obligation of the judgment debtor to make further payments 
  3.7   ceases and any security given, pursuant to paragraph (a), 
  3.8   reverts to the judgment debtor. 
  3.9      (e) As used in this section: 
  3.10     (1) "Future damages" includes, but is not limited to, 
  3.11  damages for future medical treatment, care or custody, loss of 
  3.12  future earnings, loss of bodily function, or future pain and 
  3.13  suffering of the judgment creditor. 
  3.14     (2) "Periodic payments" means the payment of money or 
  3.15  delivery of other property to the judgment creditor at regular 
  3.16  intervals.  
  3.17     (3) "Health care provider" has the meaning given in section 
  3.18  541.076, paragraph (a), and includes a clinic, office, surgical 
  3.19  center, or other medical facility where the provider provides 
  3.20  care. 
  3.21     Sec. 3.  Minnesota Statutes 2002, section 549.01, is 
  3.22  amended to read: 
  3.23     549.01 [AGREEMENT AS TO FEES OF ATTORNEY.] 
  3.24     Subdivision 1.  [DEFINITIONS.] For purposes of this 
  3.25  section, "health care provider" has the meaning given in section 
  3.26  541.076, paragraph (a), and includes a clinic, office, surgical 
  3.27  center, or other medical facility where the provider provides 
  3.28  care. 
  3.29     Subd. 2.  [FEES GENERALLY.] Other than as provided in 
  3.30  subdivision 3, a party shall have an unrestricted right to agree 
  3.31  with an attorney as to compensation for services, and the 
  3.32  measure and mode thereof; but certain sums may be allowed to the 
  3.33  prevailing party for expenses in an action, which are termed 
  3.34  costs.  
  3.35     Subd. 3.  [CONTINGENCY FEES; ACTIONS AGAINST A HEALTH CARE 
  3.36  PROVIDER.] (a) An attorney shall not contract for or collect a 
  4.1   contingency fee for representing a person seeking damages in 
  4.2   connection with an action for injury or death against a health 
  4.3   care provider alleging malpractice, error, mistake, or failure 
  4.4   to cure, whether based on a contract or tort, in excess of the 
  4.5   following limits: 
  4.6      (1) 40 percent of the first $50,000 recovered; 
  4.7      (2) 33-1/3 percent of the next $50,000 recovered; 
  4.8      (3) 25 percent of the next $500,000 recovered; and 
  4.9      (4) 15 percent of any amount on which the recovery exceeds 
  4.10  $600,000. 
  4.11  The limitations apply regardless of whether the recovery is by 
  4.12  settlement, arbitration, or judgment, or whether the person for 
  4.13  whom the recovery is made is a responsible adult, an infant, or 
  4.14  a person of unsound mind. 
  4.15     (b) An attorney may not receive contingency fees on any 
  4.16  portion of an award for punitive damages. 
  4.17     (c) In the event that the judgment or settlement includes 
  4.18  periodic or future payments of damages, the amount recovered for 
  4.19  purposes of this section is the cost of the annuity or trust 
  4.20  established to make the payments, or if there is no annuity or 
  4.21  trust, the present value of the payments. 
  4.22     Subd. 4.  [VIOLATION.] A fee contracted for in violation of 
  4.23  this section is void and unenforceable.  A claimant affected by 
  4.24  a violation of this section may bring an action in the court in 
  4.25  which the claim was or could have been brought, for damages in 
  4.26  the amount of three times the fee improperly contracted for or 
  4.27  collected, reasonable attorney fees, and other relief to which 
  4.28  the person may be entitled. 
  4.29     Sec. 4.  [549.22] [NONECONOMIC LOSSES; LIMITATIONS.] 
  4.30     Subdivision 1.  [DEFINITIONS.] For purposes of this section:
  4.31     (1) "health care provider" has the meaning given in section 
  4.32  541.076, paragraph (a), and includes a clinic, office, surgical 
  4.33  center, or other medical facility where the provider provides 
  4.34  care; and 
  4.35     (2) "noneconomic loss" means all nonpecuniary harm for 
  4.36  which damages are recoverable, including but not limited to 
  5.1   pain, disability, disfigurement, embarrassment, emotional 
  5.2   distress, and loss of consortium. 
  5.3      Subd. 2.  [LIMITATION.] In an action for injury or death 
  5.4   against a health care provider alleging malpractice, error, 
  5.5   mistake, or failure to cure, whether based on a contract or 
  5.6   tort, the amount of damages awarded for noneconomic losses may 
  5.7   not exceed $250,000 regardless of the number of parties against 
  5.8   whom the action is brought or the number of separate claims or 
  5.9   actions brought with respect to the same occurrence. 
  5.10     The limitation imposed by this subdivision must not be 
  5.11  disclosed to the trier of fact by any person at trial. 
  5.12     Sec. 5.  Minnesota Statutes 2002, section 549.25, is 
  5.13  amended to read: 
  5.14     549.25 [FUTURE DAMAGES; PAYMENT.] 
  5.15     Except as otherwise provided in section 548.37, where a 
  5.16  claimant is awarded an amount representing future damages 
  5.17  greater than $100,000, the court shall hold a hearing prior to 
  5.18  ordering entry of judgment to allow the claimant to consider 
  5.19  whether payment of the future damages over time as the damages 
  5.20  are incurred is in the best interests of the claimant.  The 
  5.21  following factors may be considered at the hearing, as well as 
  5.22  any others as justice requires: 
  5.23     (1) the claimant's financial ability to meet obligations 
  5.24  likely to be incurred as a result of the injury at issue in the 
  5.25  trial; 
  5.26     (2) the advantages, if any, to the claimant from 
  5.27  voluntarily entering into a structured settlement; and 
  5.28     (3) the interests of the claimant in self-determination 
  5.29  over the claimant's financial affairs. 
  5.30     If the claimant decides, after the hearing, that structured 
  5.31  payments of future damages would be in the claimant's best 
  5.32  interests, the court shall make available information to assist 
  5.33  the claimant in seeking an appropriate financial instrument to 
  5.34  provide such payments.  Judgment may not be entered until the 
  5.35  claimant has notified the court that the claimant does not wish 
  5.36  to enter into a structured settlement. 
  6.1      Sec. 6.  [EFFECTIVE DATE; APPLICATION.] 
  6.2      Sections 1 to 5 are effective August 1, 2003, and apply to 
  6.3   actions commenced on or after that date.