JACKSON - Mississippi's business community was on the ropes today with action by legislative committees that killed bills to protect corporations from high-dollar lawsuit verdicts.
Civil justice committees in the House and Senate on Thursday killed each other's tort reform bills, including one passed by the House that would have capped punitive damages for all businesses at 10 percent of net worth.
Rep. Percy Watson, D-Hattiesburg, said he hoped some bill would have survived so the two sides could have worked out a compromise. Sen. Bennie Turner, D-West Point, said senators may work on a new bill next week.
The business community was hopeful legislative action was still possible.
Blake Wilson, president of the Mississippi Economic Council, said both houses had done a lot of work on tort reform and needed to stay with it. "We are hopeful and optimistic," he said. "We need meaningful tort reform."
There was no discussion in the House committee, which killed a sweeping Senate bill that called for a $5 million cap on punitive damages for all businesses. It also would cap awards for non-economic damages such as pain and suffering, and death at $500,000, a provision similar to what was passed in a medical malpractice reform bill signed into law over a week ago.
The House bills did not go as far as the Senate proposals.
Senators were irate over the House committee's action.
"I can't believe we're at this point," said Sen. Terry Burton, D-Newton. "We sent them a bowl of soup and they sent us dish water. I am not willing to vote for dish water when there are people out there needing relief."
Sen. Bill Canon, R-Columbus, described the 10 percent cap bill as "hog wash."
Late Thursday, the House passed 76-36 a bill cap damages that financial institutions could face in lawsuits over issues such as credit life insurance.
The lending institutions argue they are facing hundreds of lawsuits from people who claimed they bought credit life insurance and other extras - such as property protection - and were not told about it.
Credit life insurance would pay off a loan if anything happened to the borrower. The courts have ruled that financial institutions cannot require the insurance as a condition of qualifying for a loan.
The bill was endorsed by the Mississippi Bankers Association. Trial lawyers opposed it and told lawmakers nothing was being done to penalize lenders who committed wrongdoing.
"This is a broad political issue," said Rep. Ed Blackmon Jr., D-Canton, who handled the bill in the House. "We have a crisis situation for the banks. It is a crisis that is self-inflicted."
Nonetheless, Blackmon said the bill would give borrowers a means to be reimbursed for illegally charged fees. He said the bill creates a scale for damages that could be collected tied to the amount of the illegal fees.
Blackmon said borrowers would have a year to file lawsuits after the bill was signed into law, but after that no lawsuits could be filed to recover penalties and damages.
He said the law would expire on July 1, 2004, at which time the banks would lose the cap protection. Blackmon said that provision was added in the belief that financial institutions would have ended such predatory practices.
The bill now goes to the Senate.
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