West Virginia Operating with Tort Reform Concerns

Like many other parts of the country, West Virginia is looking to answers to improve tort reform in the state.

Recently, Insurance Journal Southeast spoke with Randy Cox, American Insurance Association West Virginia Counsel. Cox looks at how the state has tried to correct the problem, where it originated, the impact of trial lawyers, and how agents and companies are feeling the pinch of doing business there.

Insurance Journal: What strides has the West Virginia legislature made ultimately to address the problem and what more needs to be done as we go into 2004?

Randy Cox: During the last two years, the West Virginia Legislature has passed legislation to reform a near-bankrupt workers’ compensation system and enacted major medical malpractice reform to address the concerns of the health care provider community. In addition, West Virginia enacted venue legislation (which was the cornerstone of AIA’s asbestos efforts in West Virginia in 2003) which severely limited the rights of out of state plaintiffs to pursue claims for damages in West Virginia. Nevertheless, there is much more that needs to be done. The West Virginia Legislature now needs to adopt the same reforms for the business community as it adopted for the health care community. Such reforms include the elimination of joint and several liability and third-party bad faith claims under the Unfair Trade Practices Act, collateral source legislation, and passage of legislation to establish a fraud unit to deal with insurance fraud within West Virginia.

IJ: How and when did this problem get started and who is to ultimately blame?
Cox: Many of our problems have their origin with the West Virginia Supreme Court. The West Virginia Supreme Court continues to be one of the greatest challenges facing tort reform in the state. The court is comprised of five justices who are elected in bipartisan elections to 12-year terms. The elections have generally been partisan, with business interests and labor/trial lawyers heavily funding the campaigns of their respective candidates. As evidenced by the recent findings of ATRA and the Defense Trial Counsel of West Virginia, the court’s liberality is one of the leading factors for the state developing a reputation as one of the most popular places in the country to file class action and other tort lawsuits. The Supreme Court is responsible for one of the most aggressive medical monitoring standards in the entire country. Bower v. Westinghouse, 522 S.E. 2d 424 (W. Va. 1999), held that a plaintiff could bring a claim for “medical monitoring” if wrongfully exposed to an injurious or toxic substance but was otherwise asymptomatic. This decision has generated a number of lawsuits, and is viewed as a very large problem for businesses in West Virginia. An effort to overturn the decision with legislation failed in 2003. West Virginia has become a relatively plaintiff-friendly jurisdiction. Examples include the various mass tort consolidation cases which have forced defendants to settle with huge numbers of plaintiffs rather than facing the prospect of punitive damage multipliers decided in the first phase of trial (see below). As indicated above, there have been promising developments, including the enactment in 2003 of a venue-reform bill which, if ultimately upheld, will limit the ability of out-of-state plaintiffs to pursue claims for damages in West Virginia; the adoption of a new asbestos case management order that tries smaller clusters (up to 20 claimants) of mesothelioma plaintiffs over a staggered period of time and allows defendants to obtain discovery; the adoption of workers’ compensation reform; and the adoption of medical malpractice reform.

IJ: Have trial lawyers looked at West Virginia as a potential money target?

Editor’s Note: To see the full interview, see the Jan. 26 issue of Insurance Journal Southeast. For more information on this magazine, which contains news for independent agents in Alabama, Florida, Georgia, Kentucky, Mississippi, North Carolina, South Carolina, Tennessee and West Virginia, visit www.insurancejournal.com/subscribe or e-mail subscriptions@insurancejournal.com.