SB293INTRODUCED
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SB293
9E3ABPP-1
By Senator Orr
RFD: Judiciary
First Read: 04-Apr-24
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5 9E3ABPP-1 04/03/2024 JC (L)tgw 2024-1171
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First Read: 04-Apr-24
SYNOPSIS:
Under a litigation financing agreement, a
company advances money to an attorney to pay the
expenses of a civil suit on behalf of an injured
individual. If the individual prevails, the litigation
financier is repaid from the amount awarded to the
individual.
This bill would regulate this practice by
imposing limits on how much litigation financiers can
be paid and would require disclosure of the financing
agreement to the court and the other parties to the
suit.
Under existing law, an employer can be held
responsible for the death or injury of an individual
caused by an employee, either on a direct basis when
the employer was negligent or wanton in supervising the
employee, or on a vicarious basis when the employee was
acting in the scope of employment when the death or
injury occurred.
This bill would provide that an employer may
admit in a civil suit that the employee was acting in
the scope of the job and would thereby restrict the
basis for the employer's exposure to damages to
vicarious liability.
This bill would define "noneconomic damages" in
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This bill would define "noneconomic damages" in
a personal injury lawsuit and put a monetary cap on the
amount of noneconomic damages that may be awarded.
This bill would regulate the proof required for
recovery of damages for expenses for medical care
provided to an injured individual in personal injury,
wrongful death, product liability, and medical
malpractice cases, including cases where a health care
provider has agreed to be paid from an amount awarded
to the individual or has sold the individual's account
to a third party. This bill would further establish
corresponding limits on the amount of damages
recoverable for medical expenses.
Under existing law, expert testimony on
scientific matters may be used in a civil trial where
it is based on sufficient facts and reliable principles
or methods that may be reliably applied to the facts in
dispute.
This bill would expand these requirements to
expert testimony on other technical or specialized
branches of knowledge and impose an additional
requirement on a party seeking to use expert testimony
to demonstrate that it is more likely than not that the
underlying principles used by the expert and their
application to the facts of case will be reliable.
This bill would change the definition of a
"passenger car" from a motor vehicle that is designed
to carry no more than 10 passengers to a vehicle that
can carry no more than 15 passengers.
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can carry no more than 15 passengers.
Existing law provides that failure to wear a
seatbelt is not evidence in a civil suit for an injured
individual's contributory negligence.
This bill would specify that the nonuse of a
seatbelt by an injured individual can be used in a
civil action for certain purposes, including proof that
an accident victim failed to mitigate or otherwise
caused his or her injury.
This bill would regulate advertising statements
made by attorneys about monetary awards they have
obtained in other civil suits, by limiting the award
amounts to those that are final and have actually been
recovered and paid to clients, and would provide a
criminal penalty for a knowing violation.
Also, under existing law, a civil action, other
than one involving child support, may be transferred to
another county in which the action could have been
lawfully filed, when the transfer would serve the
convenience of the parties or is in the interest of
justice.
This bill would specify that the interest of
justice requires a court to transfer a civil action to
the county in which the facts underlying the suit
occurred.
A BILL
TO BE ENTITLED
AN ACT
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AN ACT
Relating to civil actions; to add Article 4 to Chapter
21 of Title 12, Code of Alabama 1975, to regulate litigation
financing agreements; to add Article 41 to Chapter 5 of Title
6, Code of Alabama 1975, to regulate the grounds for liability
of an employer; to add Article 4 to Chapter 11 of Title 6,
Code of Alabama 1975, to provide a definition for "noneconomic
damages" and to limit liability therefor; to amend Section
12-21-45, Code of Alabama 1975, to further regulate evidence
for recovery of damages for past and future medical care
expenses; to add Section 12-21-46 to the Code of Alabama 1975,
to set a limit on damages for the value of medical care; to
amend Sections 6-5-522, 6-5-523, and 6-5-545, Code of Alabama
1975, to further regulate evidence in product liability and
medical malpractice actions for recovery of damages for
medical care expenses and to set a limit thereon; to repeal
Section 6-5-524, Code of Alabama 1975, regulating evidence of
third-party payments or reimbursements for medical and
hospital expenses; to amend Section 12-21-160, Code of Alabama
1975, to further provide for a standard for the admission in
evidence of expert testimony; to amend Sections 32-5B-2 and
32-5B-7, Code of Alabama 1975, to further provide for the
definition of "passenger car" and the purposes for which
evidence concerning the misuse or nonuse of a safety belt may
be admitted; to add Section 34-3-26 to the Code of Alabama
1975, to regulate attorney advertising concerning damage
awards obtained by an attorney and to provide a criminal
penalty for a violation; and to amend Section 6-3-21.1, Code
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penalty for a violation; and to amend Section 6-3-21.1, Code
of Alabama 1975, to further provide for a change of venue.
BE IT ENACTED BY THE LEGISLATURE OF ALABAMA:
Section 1. Article 4, commencing with Section
12-21-500, is added to Chapter 21 of Title 12, Code of Alabama
1975, to read as follows:
Article 4
§12-21-500
(a) This article shall be known and be cited as the
Litigation Financing Safeguards and Transparency Act.
(b) In enacting this article, the Legislature finds and
declares the following:
(1) The practice whereby third parties with financial
resources pay the expenses of litigation on behalf of persons
seeking redress in our court system can be an innovative and
helpful means of affording access to justice to those who
otherwise lack the money and resources.
(2) Nevertheless, permitting a third party that is not
an advocate or a party to a dispute, to fund litigation
presents unique temptations that potentially undermine the
integrity of our civil court system by: (i) compromising the
ethical obligation of attorneys to provide zealous advocacy
that is owed exclusively to their clients; (ii) introducing
outside incentives that undermine the true monetary value of
cases and lead to financial speculation in litigation; (iii)
misleading officers of the court concerning those influencing
the course of a lawsuit; and (iv) exposing proprietary
knowledge to foreign state actors.
(3) Therefore, it is the policy of the State of Alabama
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(3) Therefore, it is the policy of the State of Alabama
to balance the need for access to justice for consumers of
modest means with the need to protect those same consumers by
ensuring that they recover more than those financing their
cases and by fostering transparency in our courts through
mandatory disclosure of litigation financing agreements to
judges, opposing counsel, and all parties who have a stake in
a lawsuit's outcome.
§12-21-501
For purposes of this article, the following terms have
the following meanings:
(1) CONSUMER or FUNDED CONSUMER. Any person who has
entered into a litigation financing agreement or whose
recovery or outcome in a civil action, arbitration proceeding,
administrative proceeding, claim, or cause of action is
affected by litigation financing.
(2) FOREIGN PERSON. Any person who is not any of the
following:
a. A citizen of the United States.
b. An alien lawfully admitted for permanent residence
in the United States.
c. An unincorporated association, a substantial number
of members of which are citizens of the United States, or
aliens lawfully admitted for permanent residence in the United
States.
d. A corporation that is incorporated in the United
States.
(3) FOREIGN PRINCIPAL. Any of the following persons or
entities:
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entities:
a. The government or a government official of any
nation other than the United States.
b. A political subdivision or political party of a
nation other than the United States.
c. A partnership, association, corporation,
organization, or other combination of persons organized under
the laws or having its principal place of business in a nation
other than the United States whose shares or other ownership
interest is owned by the government or a government official
of a nation other than the United States or owned by a
political subdivision or political party of a nation other
than the United States.
(4) HEALTH CARE PROVIDER. Any hospital, institution,
laboratory, pharmacy, physician, optometrist, chiropractor,
dentist, nurse, pharmacist, therapist, or any other medical or
health care facility, professional, or person who diagnoses,
evaluates, treats, or otherwise delivers medical services or
treatment to an individual.
(5) LITIGATION FINANCIER. Any person engaged in
litigation financing.
(6) LITIGATION FINANCING AGREEMENT or LITIGATION
FINANCING. Any agreement creating a right to receive payment
by or on behalf of any consumer the repayment of which is
contingent in any respect on the outcome of a civil action,
arbitration proceeding, administrative proceeding, claim, or
cause of action by settlement, judgment, or otherwise, or on
the outcome of any matter within a portfolio that includes a
civil action, arbitration proceeding, administrative
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civil action, arbitration proceeding, administrative
proceeding, claim, or cause of action and involves the same
counsel or affiliated counsel. The term does not apply to
payments made to any of the following:
a. A named party to a civil action, arbitration
proceeding, administrative proceeding, claim, or cause of
action if payments made to the party are provided exclusively
for personal and family use and are provided upon condition
they are not to be used for legal filings, legal document
preparation and drafting, appeals, creation of a litigation
strategy, drafting testimony, or other expenses directly
related to litigation, and the repayment of which is not
contingent upon the outcome of the civil action, arbitration
proceeding, administrative proceeding, claim, or cause of
action.
b. An attorney providing legal services to a client on
a contingency fee basis, when the payment is for legal costs
and expenses advanced by the attorney, or for emergency
financial assistance advanced by the attorney, where the
services or payments are provided by the attorney in
accordance with the Alabama Rules of Professional Conduct.
c. A person with a preexisting contractual obligation
to indemnify or defend a party to a civil action,
administrative proceeding, claim, or cause of action or a
health insurer that has paid, or is obligated to pay, any sums
for health care for an injured individual under the terms of a
health insurance plan or agreement.
d. A financial institution, as defined in Section
40-16-1, for repayment of a loan made directly to a party or a
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40-16-1, for repayment of a loan made directly to a party or a
party's attorney when repayment of the loan is not contingent
upon the outcome of a civil action, arbitration proceeding,
administrative proceeding, claim, or cause of action by
settlement, judgment, or otherwise, or on the outcome of any
matter within a portfolio that includes the civil action,
arbitration proceeding, administrative proceeding, claim, or
cause of action and involves the same counsel or affiliated
counsel.
e. A nonprofit legal organization funded by private
donors which represents clients on a pro bono, no-cost basis,
if the nonprofit legal organization seeks only injunctive
relief on behalf of its clients. This article does not affect
awards of costs or attorney fees to nonprofit legal
organizations in the pro bono, no-cost pursuit of injunctive
relief.
(7) NATIONAL SECURITY INTERESTS. Interests that
encompass national defense, foreign intelligence and
counterintelligence, international and internal security, and
foreign relations.
(8) NET PROCEEDS. The portion of the proceeds of a
civil action, arbitration proceeding, administrative
proceeding, claim, or cause of action remaining after
satisfaction of all liens with a higher priority than that of
the litigation financier.
(9) PROPRIETARY INFORMATION or CONFIDENTIAL
INFORMATION. Information developed, created, or discovered by
a person, or known by or was conveyed to the person, and has
commercial value in the person's business. The term includes,
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commercial value in the person's business. The term includes,
but is not limited to, domain names, trade secrets, sensitive
personal information, copyrights, ideas, techniques,
inventions whether patentable or not, and other information of
any type relating to designs, configurations, documentation,
recorded data, schematics, circuits, mask works, layouts,
source codes, object codes, master works, master databases,
algorithms, flow charts, formulae, works of authorship,
mechanisms, research, manufacture, improvements, assembly,
installation, intellectual property including patents and
patent applications, and information concerning the person's
actual or anticipated business, research or development, or
information received in confidence by or for the person from
any other source.
(10) SOVEREIGN WEALTH FUND. An investment fund owned or
controlled by a foreign principal or an agent of a foreign
principal.
§12-21-502
(a) A litigation financier may not direct, recommend,
or make any decision with respect to the course of any civil
action, arbitration proceeding, administrative proceeding,
claim, cause of action, settlement, or other legal disposition
in which the litigation financier is engaged in litigation
financing. This prohibition includes, but is not limited to,
decisions in appointing or changing counsel, choice of or use
of expert witnesses, investigations, venue selection,
discovery, and litigation strategy. All rights to control and
decision-making with regard to the subject civil action,
arbitration proceeding, administrative proceeding, claim,
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arbitration proceeding, administrative proceeding, claim,
cause of action, settlement, or other legal disposition remain
solely with the funded consumer and that funded consumer's
attorney.
(b) A litigation financier may not, directly or
indirectly, receive a larger share of the net proceeds of a
civil action, arbitration proceeding, administrative
proceeding, claim, or cause of action than the funded consumer
who is party to the financed civil action, arbitration
proceeding, administrative proceeding, claim, or cause of
action.
(c) In class action litigation, the court shall take
the existence of litigation financing and any related conflict
of interest into account when determining whether a class
representative or class counsel would adequately and fairly
represent the interests of the class.
(d) The court shall take the existence of litigation
financing and any related conflict of interest into account
when approving or appointing attorneys to leadership positions
in multidistrict litigation. Such leadership positions
include, but are not limited to, lead counsel, co-lead
counsel, common benefit counsel, steering committee
membership, and executive committee membership.
§12-21-503
A litigation financier may not do any of the following:
(1) Pay or offer to pay a commission, referral fee, or
other consideration to any person, including an attorney, law
firm, or health care provider, for referring a person to a
litigation financier.
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litigation financier.
(2) Assign, including securitizing, a litigation
financing agreement in whole or in part.
(3) Take an assignment of rights to a civil action,
arbitration proceeding, administrative proceeding, claim, or
cause of action where that litigation financier is engaged in
litigation financing in that civil action, arbitration
proceeding, administrative proceeding, claim, or cause of
action.
§12-21-504
(a) An attorney who enters into a litigation financing
agreement shall deliver a copy of the agreement to the
consumer he or she is representing in the subject civil
action, arbitration proceeding, administrative proceeding,
claim, or cause of action within 30 days after being retained
as counsel, or within 30 days after entering into the
agreement, whichever occurs first.
(b) Except as otherwise stipulated or ordered by a
court of competent jurisdiction, a consumer or the consumer's
counsel of record, without awaiting a discovery request and
within 30 days after the appearance of an opposing party in
the civil action, arbitration proceeding, administrative
proceeding, claim, or cause of action, or within 10 days after
entering into the agreement in a pending civil action,
arbitration proceeding, administrative proceeding, claim, or
cause of action, shall disclose and deliver to the individuals
or entities listed in subsection (e) a copy of the litigation
financing agreement.
(c) In addition to complying with subsections (a) and
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(c) In addition to complying with subsections (a) and
(b), for any action filed or certified as a class action in
which litigation financing is involved, the class counsel of
the putative class must disclose any legal, financial, or
other relationship between the legal representative and a
litigation financier to the individuals or entities listed in
subsection (e).
(d) In addition to complying with subsections (a), (b)
and (c), attorneys appearing in a consolidated action in
Alabama must disclose and deliver a copy of the litigation
financing agreement to every other attorney appearing in the
consolidated action within 10 days of the order of
consolidation.
(e) Disclosures required in subsections (b) and (c)
must be made to the following individuals or entities:
(1) All parties to the civil action, arbitration
proceeding, administrative proceeding, claim, or cause of
action or to each party's counsel of record.
(2) The court, agency, or tribunal in which the civil
action, arbitration proceeding, administrative proceeding,
claim, or cause of action is pending.
(3) Any known person, including an insurer, with a
preexisting contractual obligation to indemnify or defend a
party to the civil action, arbitration proceeding,
administrative proceeding, claim, or cause of action.
(f) Class counsel, upon request of a class member, must
disclose and deliver a copy of the litigation financing
agreement to the class member.
(g)(1) A consumer that is a party, or the consumer's
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(g)(1) A consumer that is a party, or the consumer's
counsel of record, without awaiting a discovery request and
within 30 days after the appearance of an opposing party in a
civil action, arbitration proceeding, administrative
proceeding, claim, or cause of action, or within 10 days after
entering into a litigation financing agreement in a pending
civil action, arbitration proceeding, administrative
proceeding, claim, or cause of action, shall disclose in
writing the name, address, and citizenship or nation of
incorporation or registration of any foreign person, foreign
principal, or sovereign wealth fund, other than the named
parties or counsel of record, where any of the following
applies:
a. The foreign person, foreign principal, or sovereign
wealth fund has a right to receive any payment that is
contingent in any respect: (i) on the outcome of the civil
action, arbitration proceeding, administrative proceeding,
claim, or cause of action by settlement, judgment, or other
disposition of the same; or (ii) on the outcome of any matter
within a portfolio that includes the civil action, arbitration
proceeding, administrative proceeding, claim, or cause of
action and involves the same counsel or affiliated counsel.
b. The foreign person, foreign principal, or sovereign
wealth fund is the direct or indirect source of the money used
to satisfy any term of the litigation financing agreement.
c. The foreign person, foreign principal, or sovereign
wealth fund receives or has the right to receive proprietary
information or information related to national security
interests obtained as a result of the civil action,
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interests obtained as a result of the civil action,
arbitration proceeding, administrative proceeding, claim, or
cause of action.
(2) Disclosures required in this subsection shall be
made to the following individuals or entities:
a. All parties to the civil action, arbitration
proceeding, administrative proceeding, claim, or cause of
action or to each party's counsel of record.
b. The court, agency, or tribunal in which the civil
action, arbitration proceeding, administrative proceeding,
claim, or cause of action is pending.
c. Any known person, including an insurer, with a
preexisting contractual obligation to indemnify or defend a
party to the civil action, arbitration proceeding,
administrative proceeding, claim, or cause of action.
d. The Office of the Secretary of State of the State of
Alabama.
e. The Office of the Attorney General of the State of
Alabama.
(h) The disclosure obligations required by this section
are continuing obligations, and within 30 days after entering
into a litigation financing agreement or amending an existing
agreement, a consumer or the consumer's attorney must disclose
and deliver any new or amended litigation financing agreement
and related disclosures.
(i) The existence of a litigation financing agreement
and all participants or parties to the agreement are
permissible subjects for discovery in any civil action,
arbitration proceeding, administrative proceeding, claim, or
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arbitration proceeding, administrative proceeding, claim, or
cause of action.
(j)(1) A party or the party's counsel of record shall
exercise due diligence in ascertaining the existence of
information made subject to disclosure under this section and
in obtaining the information required for disclosure.
(2) A party or the party's counsel of record who
exercises due diligence and reasonably concludes that no
information subject to disclosure exists does not violate this
section.
§12-21-505
(a) Any documents or other information obtained by a
litigation financier related to a civil action, arbitration
proceeding, administrative proceeding, claim, or cause of
action for which it is providing, or may provide, litigation
financing shall be kept in confidence by the litigation
financier.
(b) Any documents or other information obtained by a
litigation financier in a civil action, arbitration
proceeding, administrative proceeding, claim, or cause of
action for which it is providing, or may provide, litigation
financing shall be used solely in relation to that specific
civil action, arbitration proceeding, administrative
proceeding, claim, or cause of action.
(c) At the conclusion of any civil action, arbitration
proceeding, administrative proceeding, claim, or cause of
action, or the termination of a litigation financing
agreement, whichever occurs first, the litigation financier
shall return all documents, files, and materials, including
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shall return all documents, files, and materials, including
all physical and electronic copies, to the person that
provided the documents. Alternatively, within 30 days of the
triggering event, the litigation financier shall certify in
writing that it has used reasonable efforts to destroy all
documents, files, and materials, including all physical and
electronic copies.
(d) After the conclusion of any civil action,
arbitration proceeding, administrative proceeding, claim, or
cause of action, or the termination of a litigation financing
agreement, a litigation financier may not compile or store
documents or other information obtained in the course of
providing litigation financing for any purpose.
§12-21-506
(a) In any litigation financing agreement, a litigation
financier shall indemnify the funded consumer against any
adverse costs, attorney fees, damages, or sanctions that may
be ordered or awarded against the funded consumer in any civil
action, arbitration proceeding, administrative proceeding,
claim, or cause of action for which the litigation financier
is providing litigation financing and which are based upon a
frivolous or meritless claim.
(b) If the adverse costs, attorney fees, damages, or
sanctions are imposed as a result of the funded consumer's
intentionally wrongful conduct, the litigation financier is
not required to indemnify the funded consumer.
§12-21-507
(a) A litigation financing agreement executed in
violation of this article is void.
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violation of this article is void.
(b) A litigation financier who violates Sections
12-21-502, 12-21-503, or 12-21-504 commits an unfair and
deceptive trade practice actionable under Chapter 19 of Title
8.
(c) The court, agency, or tribunal shall determine
sanctions for any party that fails to make the disclosures
required in Section 12-21-504. An evasive or incomplete
disclosure shall be treated as failure to make the disclosure.
Section 2. Article 41, commencing with Section 6-5-820,
is added to Chapter 5 of Title 6, Code of Alabama 1975, to
read as follows:
Article 41
§6-5-820
The Legislature finds and declares the following:
(1) In civil actions in which a claimant is seeking to
hold a person responsible for an injury caused by another
individual working for the person, it is routine to assert
multiple claims based on theories of direct and vicarious
liability.
(2) This practice drives up the cost of litigation by
expanding the scope and length of discovery and developing
evidence that can be irrelevant.
(3) The purpose of the Legislature in enacting this
article is to reduce the time and expense of civil actions by
permitting a party to limit its potential responsibility to
vicarious liability by formally stipulating to an
employer-employee relationship with the individual who caused
the injury.
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the injury.
§6-5-821
(a) Upon submission to a court of a written stipulation
by an employer providing that, at the time of the event giving
rise to a civil action, the individual alleged to be an
employee, agent, or otherwise under the control of the
employer, and whose action or inaction is alleged to have
caused the damages, was the employer's employee and was acting
within the course and scope of employment with the employer,
no cause of action may be maintained against the employer for
either of the following:
(1) Negligence in hiring, retaining, training,
supervising, or trusting the employee, or for any other claim
of negligence on the part of the employer for the employee's
harmful conduct.
(2) Wantonness in hiring, retaining, training,
supervising, or trusting the employee, or for any other claim
of wantonness on the part of the employer in connection with
the employee's harmful action or inaction, unless the
conditions of Section 6-5-823, are established by clear and
convincing evidence.
(b) Any liability for damages of any employer who
submits the written stipulation under subsection (a) shall be
restricted to the employer's vicarious liability under the
doctrine of respondeat superior except as provided pursuant to
Section 6-5-823.
§6-5-822
(a) In any civil action where a dispute exists as to
whether an individual is an independent contractor or an
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whether an individual is an independent contractor or an
employee for the purposes of establishing vicarious liability,
the existence of a valid written contract between the parties
to which the relationship applies purporting to create an
independent contractor relationship shall create a rebuttable
presumption that the individual at issue is an independent
contractor.
(b) Notwithstanding the existence of an independent
contractor relationship, a party against which damages are
claimed may submit the written stipulation provided in Section
6-5-821, the effect of which shall be to restrict that party's
liability for damages to that of an employer's vicarious
liability under the doctrine of respondeat superior except as
provided pursuant to Section 6-5-823.
§6-5-823
Notwithstanding any other provision of this article, a
cause of action may be maintained against an employer for
wanton hiring, retaining, training, supervising, or trusting
the employee, or other claim of wantonness on the part of the
employer in connection with the employee's harmful action or
inaction, if it is established by clear and convincing
evidence that the employer had actual knowledge of any of the
following at the time of the employee's harmful action or
inaction:
(1) The employee intended to bring about the injury or
death of another individual.
(2) The employee was under the influence of alcohol or
any controlled substance, or a combination thereof, which
impaired the employee's mental or physical faculties to a
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impaired the employee's mental or physical faculties to a
degree which rendered the employee incapable of performing the
duties of employment.
(3) The employee was committing a felony offense.
(4) The employee did not have a lawful driver license,
or the employee's driver license was revoked, suspended, or
canceled.
(5) The employee was involved in human trafficking as
defined in Article 8, Chapter 6 of Title 13A.
§6-5-824
This article shall not apply to any employer registered
as an interstate motor carrier with the U.S. Department of
Transportation which has not conducted a New Entrant Safety
Assurance Program Audit in compliance with the Federal Motor
Carrier Safety Regulations, 49 C.F.R. Part 385.
Section 3. Article 4, commencing with Section 6-11-70,
is added to Chapter 11 of Title 6 of the Code of Alabama 1975,
to read as follows:
Article 4
§6-11-70
(a) For purposes of this article, the term "noneconomic
damages" means damages arising from pain, suffering
inconvenience, physical impairment, mental anguish, emotional
distress, loss of chance, loss of consortium, or any other
nonpecuniary damages. The term does not include punitive
damages.
(b) Nothing in this article shall modify, amend, or
supersede Section 6-11-21 regarding limitations on punitive
damages.
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damages.
§6-11-71
(a) In any action for damages for personal injury in
which the cause of action arises on or after January 1, 2025,
an award for noneconomic damages may not exceed one million
dollars ($1,000,000), regardless of the number of claims,
theories of liability, or defendants in the action.
(b) The limitation on noneconomic damages provided
under subsection (a) shall be adjusted as of January 1, 2028,
and as of January 1 at three-year intervals thereafter, at an
annual rate in accordance with the Consumer Price Index as
published by the United States Bureau of Labor Statistics.
(c) The limitation established under subsection (a)
shall apply to each individual who is a direct victim of
tortious conduct and to all individuals who claim injury by or
through that victim.
(d) In a jury trial, the jury may not be informed of
the limitation established under subsection (a). If the jury
awards an amount for noneconomic damages that exceeds the
limitation established under subsection (a), the court shall
reduce the amount to conform to the limitation.
Section 4. Section 12-21-45, Code of Alabama 1975, is
amended to read as follows:
"§12-21-45
(a) For purposes of this section and Section 12-21-46,
the following terms have the following meanings:
(1) FACTORING COMPANY. Any person that purchases a
health care provider's accounts receivable at a discount below
the invoice value of the accounts.
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the invoice value of the accounts.
(2) HEALTH CARE PROVIDER. Any hospital, institution,
laboratory, pharmacy, physician, optometrist, chiropractor,
dentist, nurse, pharmacist, therapist, or any other medical or
health care facility, professional, or person who diagnoses,
evaluates, treats, or otherwise delivers medical services or
treatment to a plaintiff.
(3) LETTER OF PROTECTION. Any arrangement, regardless
of whether it is referred to as a letter of protection, by
which a health care provider renders treatment in exchange for
a promise of payment for the plaintiff's expenses for medical
services or treatment from any judgment or settlement of a
personal injury or wrongful death lawsuit or claim.
(4) MEDICAL CARE PLAN. Any health care insurance,
health benefit plan, employer-provided health care plan or
medical insurance, workers' compensation insurance, Medicaid,
Medicare, other public or government-sponsored health care
insurance or benefit program, or other similar source
available to pay for services provided to an injured
individual at the time or after the medical services or
treatment were provided.
(5) MEDICAL SERVICES or TREATMENT. Any action taken by
a health care provider to observe, identify, diagnose,
stabilize, address, ameliorate, correct, remedy, rehabilitate,
manage, combat, or care for a plaintiff's injury, condition,
disease, disorder, or symptoms of a plaintiff's injury,
condition, disease, or disorder. The term includes any
equipment, facilities, medicines, drugs, prescriptions,
devices, or products provided or applied to a plaintiff by a
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devices, or products provided or applied to a plaintiff by a
health care provider or consumed by a plaintiff at a health
care provider's direction.
(b) In all civil actions where damages for any medical
or hospital expenses are claimed and are legally recoverable
for personal injury or death , evidence that the plaintiff's
medical or hospital expenses for medical services or treatment
have been or will be paid or reimbursed shall be admissible as
competent evidence . In such actions upon admission of evidence
respecting reimbursement or payment of medical or hospital
expenses, the plaintiff shall be entitled to introduce
evidence of the cost of obtaining reimbursement or payment of
medical or hospital expenses that the expenses paid or
reimbursed were reasonable and necessary . Proof that any
health care provider's bills were incurred but resolved in
whole or in part by way of contractual discount, reduction,
disallowance, gift, or write-off and not paid may not be used
to establish the necessity or reasonableness of those health
care provider expenses.
(b)(c)In such civil actions, information respecting
such reimbursement or payment obtained or such reimbursement
or payment which may be obtained by the plaintiff for medical
or hospital expenses shall be subject to discovery. Evidence to
establish the reasonable value of past or future medical
services or treatment in any action to recover damages
resulting from death or injury to a person is admissible only
as follows in this subsection:
(1) Evidence offered to prove the amount of damages for
past reasonable and necessary medical services or treatment
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past reasonable and necessary medical services or treatment
that have been satisfied is limited to evidence of the amount
actually paid to the health care provider, regardless of the
source of payment.
(2) Evidence offered to prove the reasonable value of
unpaid charges for incurred reasonable and necessary medical
services or treatment shall be limited to evidence as
described in the following paragraphs:
a. If the plaintiff is covered by a medical care plan,
evidence of the amount that the medical care plan is obligated
to pay the health care provider to satisfy the charges for the
plaintiff's incurred reasonable and necessary medical services
or treatment, plus the plaintiff's share of those medical
expenses under the medical care plan.
b. If the plaintiff is covered by a medical care plan
but obtains treatment under a letter of protection or
otherwise does not submit to the medical care plan for payment
of any charges for any health care provider's medical services
or treatment, evidence of the amount the plaintiff's medical
care plan would pay the health care provider to satisfy the
past unpaid charges for reasonable and necessary medical
services or treatment, plus the plaintiff's share of those
medical expenses under the medical care plan, had the
plaintiff submitted the health care provider's charges to the
medical care plan for payment.
c. If the plaintiff obtains reasonable and necessary
medical services or treatment under a letter of protection or
on expectation of future payment and the health care provider
subsequently transfers the right to receive payment under the
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subsequently transfers the right to receive payment under the
letter of protection or account receivable to a factoring
company or other third party, evidence of the amount the
factoring company or other third party paid or agreed to pay
the health care provider in exchange for the right to receive
payment pursuant to the letter of protection or account
receivable.
d. If the plaintiff is not covered by a medical care
plan, evidence of the Medicare reimbursement rate in effect at
the time of trial for the plaintiff's incurred reasonable and
necessary medical services or treatment.
e. Any evidence disclosed under subsection (d) related
to a letter of protection.
f. Any evidence of the plaintiff's actual expenditures
to obtain the applicable medical care plan coverage for the
two-year period prior to the onset date of the illness or
injury that is the subject of the plaintiff's claim for
personal injury or death.
(3) Evidence offered to prove the amount of any future
reasonable and necessary medical services or treatment the
plaintiff will receive shall include, but is not limited to,
evidence as described in the following paragraphs:
a. If the plaintiff is covered by a medical care plan
or is eligible for a medical care plan, evidence of the amount
for which the future charges of health care providers could be
satisfied if submitted to the medical care plan, plus the
plaintiff's share of medical expenses under the medical care
plan.
b. If the plaintiff is not covered by a medical care
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b. If the plaintiff is not covered by a medical care
plan, evidence of the Medicare reimbursement rate in effect at
the time of trial for the medical services or treatment the
plaintiff will receive.
(c)(d)Upon proof by the plaintiff to the court that
the plaintiff is obligated to repay the medical or hospital
expenses which have been or will be paid or reimbursed,
evidence relating to such reimbursement or payment shall be
admissible.In all civil actions where damages for any health
care provider's expenses are claimed, as a condition precedent
to asserting any claim for expenses for medical services or
treatment rendered under a letter of protection or on
expectation of future payment, the plaintiff shall disclose to
the other parties to the action all of the following
information that applies:
(1) Whether the plaintiff received medical services and
treatment under a letter of protection and if so, a copy of
the letter of protection.
(2) All billings for the plaintiff's medical services
or treatment, which shall be itemized and to the extent
applicable, shall include the following information:
a. For health care providers billing at the provider
level, the American Medical Association's Current Procedural
Terminology (CPT), or the Healthcare Common Procedure Coding
System (HCPCS) in effect on the date the medical services or
treatment were rendered.
b. For health care providers billing at the facility
level for expenses incurred in a clinical or outpatient
setting, including through an Ambulatory Payment
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setting, including through an Ambulatory Payment
Classification (APC) or Enhanced Ambulatory Patient Grouping
(EAPG), the International Classification of Diseases (ICD)
diagnosis code and, if applicable, the American Medical
Association's Current Procedural Terminology (CPT) in effect
on the date the medical services or treatment were rendered.
c. For health care providers billing at the facility
level for expenses incurred in an inpatient setting, including
through a Diagnosis Related Group (DRG), the International
Classification of Diseases (ICD) diagnosis and procedure codes
in effect on the date on which the plaintiff was discharged.
(3) If the health care provider sells the account
receivable for the plaintiff's medical services or treatment
to a factoring company or other third party, the information
shall include the name of the factoring company or other third
party who purchased the account and the amount for which the
factoring company or other third party purchased the account
receivable, including any discount provided below the invoice
amount.
(4) Whether the plaintiff, at the time medical services
or treatment were rendered, had coverage pursuant to a medical
care plan and if so, the identity of the medical care plan.
(5) If the plaintiff received medical care and
treatment under a letter of protection, the identity of any
individual who referred the plaintiff for medical care and
treatment, including the plaintiff's attorney if applicable.
(6) If the plaintiff was referred by his or her
attorney to a health care provider under a letter of
protection, the information shall include the number and
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protection, the information shall include the number and
frequency of the referrals by the attorney to the health care
provider and include a description of the mutual consideration
exchanged by the attorney and the health care provider for the
referrals.
(e)(1) Disclosure of an attorney's referral of a
plaintiff to a health care provider is not protected by any
privilege, and evidence of the referral shall be admissible.
(2) Any financial relationship between an attorney and
a health care provider is relevant to the issue of the bias of
a testifying health care provider.
(d) This section shall not apply to any civil action
pending on June 11, 1987. "
Section 5. Section 12-21-46 is added to the Code of
Alabama 1975, to read as follows:
§12-21-46
In any action arising from death or injury to an
individual, the amount that may be recovered for the
reasonable value of any reasonable and necessary medical
services or treatment may not include any amount in excess of
the evidence of medical services or treatment expenses
admitted pursuant to Section 12-21-45, and also may not exceed
the sum of the following:
(1) Amounts actually paid by or on behalf of the
plaintiff to a health care provider who rendered reasonable
and necessary medical services or treatment;
(2) Amounts necessary to satisfy charges for reasonable
and necessary medical services or treatment which are due and
owing but at the time of trial are not yet satisfied; and
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owing but at the time of trial are not yet satisfied; and
(3) Amounts necessary to provide for any reasonable
and necessary medical services or treatment that the plaintiff
will receive in the future.
Section 6. Sections 6-5-522 and 6-5-523, Code of
Alabama 1975, are amended to read as follows:
"§6-5-522
In all product liability actions where damagesamounts
for any medical or hospital expenses are claimed and are
legally recoverable incurred for personal injury or death,
evidence thatof the plaintiff's medical or hospital expenses
have been or will be paid or reimbursed (1) by medical or
hospital insurance, or (2) pursuant to the medical and
hospital payment provisions of law governing workmen's
compensation, shall be admissible as competent evidence in
mitigation of such medical or hospital expense damages. In
such actions upon admission of evidence respecting
reimbursement or payment of medical or hospital expenses, the
plaintiff shall be entitled to introduce evidence of the cost
of obtaining reimbursement or payment of medical or hospital
expenses. Such portion of the costs of obtaining reimbursement
or payment of medical or hospital expenses as the trier of
fact finds is reasonably related to the reimbursement or
payment received or to be received by the plaintiff shall be a
recoverable item of such damages for medical or hospital
expensesonly as set forth in Section 12-21-45 ."
"§6-5-523
In all product liability actions ,information
respecting reimbursement or payment obtained or which may be
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respecting reimbursement or payment obtained or which may be
obtained by the plaintiff for medical or hospital expenses
shall be subject to discovery the amounts that may be recovered
for the reasonable value of any reasonable and necessary
medical services or treatment may not exceed the limits set
forth in Section 12-21-46 ."
Section 7. Section 6-5-524, Code of Alabama 1975,
regulating the admission of evidence of third-party payment or
reimbursement for medical care and hospital expenses, is
repealed.
Section 8. Section 6-5-545, Code of Alabama 1975, is
amended to read as follows:
"§6-5-545
(a) In all actions where damagesamounts for any medical
or hospital expenses are claimed and are legally
recoverableincurred for personal injury or death, evidence
that the plaintiff's medical or hospital expenses have been or
will be paid or reimbursed shall be admissible as competent
evidence only as set forth in Section 12-21-45 . In such
actions upon admission of evidence respecting reimbursement or
payment of medical or hospital expenses, the plaintiff shall
be entitled to introduce evidence of the cost of obtaining
reimbursement or payment of medical or hospital expenses.
(b) In such civil actions, information respecting such
reimbursement or payment obtained or such reimbursement or
payment which may be obtained by the plaintiff for medical or
hospital expenses shall be subject to discovery the amounts
that may be recovered for the reasonable value of any
reasonable and necessary medical services or treatment may not
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reasonable and necessary medical services or treatment may not
exceed the limits set forth in Section 12-21-46 .
(c) Upon proof by the plaintiff to the court that the
plaintiff is obligated to repay the medical or hospital
expenses which have been or will be paid or reimbursed,
evidence relating to such reimbursement or payment shall be
admissible."
Section 9. Section 12-21-160, Code of Alabama 1975, is
amended to read as follows:
"§12-21-160
(a) Generally. If scientific, technical, or other
specialized knowledge will assist the trier of fact to
understand the evidence or to determine a fact in issue, a
witness qualified as an expert by knowledge, skill,
experience, training, or education, may testify thereto in the
form of an opinion or otherwise.
(b) Scientific evidence Prerequisites. In addition to
requirements set forth in subsection (a), expert opinion
testimony based on a scientific theory, principle,
methodology, or procedure is only admissible if the proponent
demonstrates to the court that it is more likely than not that
all of the following apply :
(1) The testimony is based on sufficient facts or
data,.
(2) The testimony is the product of reliable principles
and methods, and.
(3) The witnesswitness's opinion reflects a reliable
application of has applied the principles and methods reliably
to the facts of the case.
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to the facts of the case.
(c) Nothing in this section shall modify, amend, or
supersede any provisions of the Alabama Medical Liability Act
of 1987 and the Alabama Medical Liability Act of 1996,
commencing with Section 6-5-540, et seq., or any judicial
interpretation thereof.
(d) This section shall apply to all civil state court
actions commenced on or after January 1, 2012January 1, 2025.
In criminal actions, this section shall only apply to
non-juvenile felony proceedings in which the defendant that is
the subject of the proceeding was arrested on the charge that
is the subject of the proceeding on or after January 1,
2012January 1, 2025. This section shall not apply to domestic
relations, child support, juvenile, or probate cases, or to
any civil action in the district court .
(e) The provisions of this section, where inconsistent
with any Alabama Rule of Civil Procedure, Alabama Rule of
Criminal Procedure , or Alabama Rule of Evidence, including,
but not limited to, Ala. R. Evid. 702, shall supersede such
rule or parts of rules."
Section 10. Sections 32-5B-2 and 32-5B-7, Code of
Alabama 1975, are amended to read as follows:
"§32-5B-2
For purposes of this chapter, the term "passenger car"
means a motor vehicle with motive power designed for carrying
1015 or fewer passengers. SuchThe term does not include a
motorcycle or a trailer."
"§32-5B-7
(a) Failure to wear a safety belt in violation of this
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(a) Failure to wear a safety belt in violation of this
chapter shall not be considered evidence of contributory
negligence and shall not limit the liability of an insurer,
nor shall the conviction be entered on the driving record of
any individual charged under the provisions of this chapter .
(b) The use, misuse, or nonuse of a safety belt by any
passenger car driver or passenger is admissible in any civil
action or proceeding for damages as evidence of failure to
mitigate damages, assumption of the risk of injury,
unforeseeable misuse, injury causation, or, if the court
otherwise determines, is admissible pursuant to applicable law
or rules of court ."
Section 11. Section 34-3-26 is added to the Code of
Alabama 1975, to read as follows:
§34-3-26
(a) The Legislature finds and declares the following:
(1) Advertising by attorneys of their professional
services, in which they promote zealous advocacy on behalf of
injured or wronged consumers, is commercial speech protected
by Amendment I of the United States Constitution.
(2) When attorneys publicly advertise the results they
have obtained on behalf of clients in the form of monetary
amounts, consumers may be misled as to the complexity of the
civil litigation process, attorney fees, and the different
factors that influence the unique merits and value of each
lawsuit.
(3) Regulating how attorneys may advertise the
favorable results they have obtained for clients is a
necessary safeguard to prevent commercial speech from being
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necessary safeguard to prevent commercial speech from being
false or misleading and to prevent the integrity of our civil
justice system from being trivialized.
(b) An attorney who advertises his or her legal
services shall comply with all ethical restrictions contained
within the Alabama Rules of Professional Conduct.
(c) An advertisement for the legal services of an
attorney that includes a statement of results obtained,
including specific money amounts, shall be subject to the
following requirements:
(1) The results must be limited to results that are
full and final.
(2) The results must not be subject to pending judicial
review or alteration.
(3) The results must be verifiable by public record or
documentation.
(4) The results must be limited to the amount actually
recovered and actually paid to a client.
(d) Nothing in this section applies to statements made
on websites maintained and operated by an attorney or law
firm.
(e) An attorney who knowingly violates this section
engages in false advertising under Section 13A-9-42 and shall
be guilty of a Class B misdemeanor.
Section 12. Section 6-3-21.1, Code of Alabama 1975, is
amended to read as follows:
"§6-3-21.1
(a) With respect to civil actions filed in an
appropriate venue, any court of general jurisdiction shall,
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appropriate venue, any court of general jurisdiction shall,
for the convenience of parties and witnesses, or in the
interest of justice, shall transfer any civil action or any
claim in any civil action to any court of general jurisdiction
in which the action might have been properly filed and the
case shall proceed as though originally filed therein.
Provided, however, this section shall not apply to cases
subject to Section 30-3-5 or Section 6-5-546 .
(b) Where the cause of action arises in a venue other
than the venue in which the civil action is originally filed,
the court, in the interest of justice, shall order the
transfer of the civil action to the venue where the cause of
action arises if this venue is otherwise appropriate under the
applicable general venue statute.
(b)(c) The right of a party to move for a change or
transfer of venue pursuant to this statutesection is
cumulative and in addition to the rights of a party to move
for a change or transfer of venue pursuant to Section 6-3-20,
Section 6-3-21, or the Alabama Rules of Civil Procedure."
Section 13. This act applies to any civil action,
administrative proceeding, claim, or cause of action commenced
on or after the effective date of this act.
Section 14. This act shall become effective on January
1, 2025.
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