Release from Senate Republican Caucus:
(NASHVILLE, TN), September 30, 2011 – Major legislation passed by the General Assembly this year which offers businesses predictability and a way to quantify risk as they decide where to locate is set to take effect tomorrow, October 1.
The Tennessee Civil Justice Act of 2011, sponsored by Senate Majority Leader Mark Norris (R-Collierville), Senator Brian Kelsey (R-Germantown), and Senator Jack Johnson (R-Franklin) was part of Governor Bill Haslam’s legislative jobs package. The sponsors say the bill aims to make Tennessee more attractive to businesses while ensuring that injured plaintiffs receive all of the economic, quantifiable damages they suffer.
“When we attract businesses, we attract jobs,” said Senator Kelsey. “This new law will provide certainty and predictability for businesses that want to locate in Tennessee. Before passage, we were the only state in the Southeast that had no limits on possible punitive damage awards. With enactment of this law, Tennessee can become the number one state in the Southeast for high quality jobs.”
“This new law is much more than tort reform, as we must be competitive with other states,” said Leader Norris. “Tennessee has always been on the cutting edge of tort reform. We must remain competitive, not just in the South or in a regional economy, but in the global context. This new law is designed to put us on a level playing field so we have predictability and certainty for businesses which look to locate or expand their operations in Tennessee.”
Key provisions of the law include:
Clarifies and defines the venue where a business can be sued;
Places a $750,000 cap on non-economic damages, except in instances of intentional misconduct, records destruction, or conduct under influence of drugs or alcohol;
Raises the cap to $1 million on non-economic damages for catastrophic losses resulting in paraplegia, quadriplegia, amputation, substantial burns or the wrongful death of a parent leaving minor children;
And places a cap on punitive damages of two times the compensatory damages or $500,000, whichever is greater, except in instances of intentional misconduct, records destruction, or conduct under influence of drugs or alcohol.
“A vibrant market economy does not operate in a vacuum,” said Senator Jack Johnson (R-Franklin), Chairman of the Senate Commerce Committee. “It has to be supported by access to a quality education, opportunity, a good transportation system, and a strong business environment. This bill, coupled with the education reforms passed this year, helps to move us move closer to our goal of making Tennessee the most competitive state in the region.”
Norris pointed to the success of the 2008 medical tort reform law which he sponsored with Senator Doug Overbey (R-Maryville) that has been successful in reducing lawsuits since its implementation. The law has resulted in a reduction in non-meritorious claims by 50 percent.
The Tennessee Civil Justice Act applies to all liability actions for injuries on or after the October 1 enactment date.