House passes ‘deep pockets’ bill

Despite the united opposition of business groups, the New Hampshire House passed a bill Wednesday that would put make it more likely for insurance companies, corporations or governments entities pay full damages in a lawsuit, even when they are only partially responsible.

The House passed House Bill 143 by a roll call vote of 202-150 after an hour-long debate that pitted “deep pockets” against the “little guy” and the “empty chair.” The bill will now go to the Senate.

HB 143 would reverse recent state court decisions that allowed juries to allocate damages against those who have not been named in a suit by the plaintiff. It would then be up to the plaintiff to go after those parties. Before the decision, it was the defendant who needed to go after that money.

Opponents of the bill say that the courts have it right. Under the old system, plaintiffs were encouraged to settle for a nominal amount in a case against a defendant who might be mainly responsible because he or she was not insured. They then would seek further damages against those with deeper pockets even though they were only tangentially responsible.

“They are going to go for the guy for the money no matter how responsible he is. They say he can sue again to get the rest. I thought we were trying to control lawsuits,” said Rep. John Hunt, R-Rindge.

“Those deep pockets? If it’s a town, it’s the property taxpayer. If it’s an insurance company, it is your insurance premiums,” said Neal Kurk, R-Weare.

Kurk noted the long list of business groups that oppose the bill, spearheaded by the Business and Industry Association of New Hampshire. (Go to nhbia.org for a complete list.) “If we are trying to maintain a state attractive to business then we should reject this bill,” he said.

But supporters of the bill (which include the Trial Lawyers Association) said it was not fair for defendants – who were primarily insurance companies – to use the “empty chair defense” to shift blame to those who aren’t even in the courtroom to defend themselves.

It’s true that the party who is mainly at fault may not have enough money to make the plaintiff whole. “But who should bear that risk? Should it be the innocent plaintiff, or the insurance company, who are in business to accept risk,” said Rep. Gary Richardson, D-Hopkinton.

Without the bill, there will be less of an incentive to settle, resulting in more litigation, not less, he added.

“The law should be for the injured party,” said Rep. Bette Lasky, D-Nashua, the bill’s sponsor “It is up to them who they should sue. It’s not about the lawyer’s pocket or the insurance company’s pocket, but to make sure that a truly wrong injured party be compensated for their loss.” – BOB SANDERS