Oklahoma passed a set of bills designed to bring tort reform to the state. The bills were a central part of Governor Mary Fallin’s campaign, who claims that tort reform is critical to job-creation. The bills provide for caps to damage awards and also determine degrees of fault in a case. Awardees will also be exempt from income tax on their awards.
Under the terms of the package a $350,000 hard cap has been placed on non-economic damages in lawsuits. This brings Oklahoma in line with thirty other states which have similar hard caps on non-economic damages. The cap will only be lifted in cases of malicious conduct, gross negligence and reckless disregard.
Legislators also put a stop to the “deep pocket,” rule which makes every defendant liable for all damages awarded regardless of fault. The reform measure will determine award liability based on who is most at fault in the suit rather than who has the most financial assets. Finally, the third component of the package exempts awardees in personal injury or wrongful death suits from having to pay federal or state income tax on their award.
“For too long, inflated legal fees have been an unnecessary cost-driver in the private sector and a burden on the medical community. As a result, we’ve seen businesses and doctors choose to locate in other states, depriving our citizens of good jobs, reducing access to medical care and driving up the costs for medical treatment,” the Governor said of the package.