The 2019 legislative session ended Friday capping a tumultuous and chaotic four months in Colorado's 72nd General Assembly. Democrats delivered on some key legislative promises including oil & gas reform and a red flag gun law. The Republican minority, relegated to playing defense, took solace in gumming up the legislative machinery enough to run out the clock on some of the more progressive bills on the Democrats' agenda.
Hiding quietly beneath the headlines, however, were some notable victories for Colorado plaintiffs.
Required Disclosure of Policy Limits
House Bill 1283 will require insurance companies to disclose their insureds' policy limits within 30 days of receiving a written request from claimants. Specifically, the bill requires insurers to disclose the name of the insurer, the name of each insured party, the limits of liability coverage, and a copy of the policy.
This is an important change. Previously, liability insurance carriers could stonewall an injured person who attempted to learn the negligent party's insurance coverage. Plaintiffs were stuck in the difficult position of having to negotiate in the dark. When the insurance carriers persisted in their refusal to disclose policy limits, plaintiffs often had no other choice but to sue the negligent parties and force them to provide their insurance coverages through discovery. The other alternative was to pay hundreds of dollars to private investigators to run insurance traces, which often tendered unreliable results. Either way, the plaintiff was forced to incur additional expense to learn about the negligent party's policy limits.
Why Knowledge of Policy Limits is Important to Plaintiffs.
Plaintiffs who have very serious injuries, high medical bills and extensive pain and suffering frequently have losses that rise well above the policy limits carried by an at-fault party. For example, if a negligent driver strikes a pedestrian in the cross-walk and the injured person requires surgery for a broken leg or herniated disk, the medical expenses might be well over $80,000.00. If the at-fault driver purchased only minimum liability coverage, which is $25,000.00 in Colorado, there wouldn't be enough liability insurance to compensate the injured person. Unfortunately, this type of scenario comes up frequently.
If the injured party can find out earlier in the process that the liability coverage is insufficient, then she can file a time limits demand to recover the available policy limits immediately and then start the process of asserting a claim against her own underinsured motorist coverage. This allows the plaintiff to recover settlement money much sooner. It also allows plaintiffs' attorneys to negotiate down the medical liens and pursue other potential sources of coverage without having to wait for the client to reach maximum medical improvement. Because full disclosure of policy limits allows injury claims to move quicker to settlement or litigation, the measure has the added benefit of preserving time on the statute of limitations clock. House Bill 1283 is a solid win for plaintiffs.
The insurance defense bar has resisted this change because it fears plaintiffs' attorneys will try to run up medical costs to reach higher policy limits if they know what the policy limits are. Insurance companies also likely fear losing a tool to slow down the claimants' demand process.
Increase in Damages Caps to Adjust for Inflation
Another major victory for Colorado plaintiffs is Senate Bill 19-109, which raises caps on noneconomic damages in Colorado for the first time in more than ten years. Governor Jared Polis signed the measure into law on April 8th. It mandates damages caps to be raised for inflation starting on January 1, 2020 and will be adjusted for inflation every January 1st for the next two years. The change will apply to claims that accrue on or after January 1, 2020.
The current cap for non-economic damages in Colorado is $468,010. In 2020, the projected new cap will be $584,210. The current cap for dram shop/social host damages in Colorado is $280,810. In 2020, the projected new cap will be $350,550. The current cap for a wrongful death claim is $468,010. In 2020, the projected new cap will be $584,210. The current cap for solatium is $87,210. In 2020, the projected new cap will be $108,840.
While plaintiffs' attorneys would undoubtedly prefer damages caps be eliminated altogether, this legislation was a necessary intermediate step to restore some semblance of fairness for plaintiffs under Colorado's tort reform framework.
The Big Miss – Measure that Would Have Barred Discovery of Medical Financing Lien Arrangements Dies in the Senate.
Senate Bill 19-217 had the Colorado plaintiffs' bar very excited. It would have barred the admissibility of medical lien financing arrangements at trial. Currently, Colorado trial courts are split as to whether this information constitutes inadmissible collateral source evidence or whether it is fair game for proving the reasonableness of medical bills. SB 19-217 would have provided some needed clarity. Unfortunately for plaintiffs, the measure fell victim to a jam-packed legislative agenda in the final days of the session. The bill initially passed out of the Senate, was amended in the House, and went back to the Senate again for revisions where it was promptly swallowed in a black hole of sticky, gummy, legislative goo.