Legislative Action By NORA NEWMAN JURGENS

Lining up the spring agendas

THE spring legislative session will deal with the liability insurance "emergency" and do a lot of fine tuning of past legislation. And the outcome of fiscal 1986 revenue projections will play a major role as lawmakers scrutinize the fiscal 1987 budget, according to an informal survey of legislative interest groups.

Technically, the even-year session is supposed to be limited to consideration of the budget and any emergency legislation. Just about everybody involved with business, local government, labor and education has defined their problems with liability insurance coverage as an emergency.

Expect a rematch of last year's medical malpractice fight as Illinois businesses and local governments join forces to take on skyrocketing premiums and disappearing coverage. Legislative insiders are predicting an early session resolution of the crisis, but with the extreme changes proposed in the way Illinois tort law determines fault and liability, it seems improbable that any resolution will come easily or soon. (See "Insurance liability crisis," January 1986, p. 8-12.)

While the insurance industry watches from the sidelines, business and local government interests have come up with sweeping proposals to reform the tort system, which deals with personal injury cases. Consumer advocate groups, on the other hand, are demanding tighter regulation of the insurance industry.

In what could be termed a form of regulation of the civil justice system, the Illinois Coalition on the Insurance Crisis (ICIC), a group of some 50 professional and local government organizations, has worked out a proposal severely limiting personal injury judg\ments as well as legal fees. According to William Dart, ICIC coordinator and chief lobbyist for the Illinois Manufacturers' Association (IMA), major provisions include a rewrite of the Illinois Comparative Fault Act to eliminate joint and several liability, as well as a repeal of the Structural Work (or Scaffold) Act, which allows an injured worker to sue all contractors involved in a construction project. Business has been trying to dump this act annually with the argument that it duplicates the state Workers' Compensation Act.

The ICIC proposal would create the Illinois Product Liability Act, which would make it more difficult to sue the manufacturer of a product. It would also bar recovery if a product is misused by the injured person. To further protect Illinois manufacturers whose products are sold nationwide, Dart said that the ICIC would like a similar law passed on the federal level.

Reflecting a membership which includes lawyers on both sides of the issue, the Illinois State Bar Association (ISBA) had taken no position by December 13. It did warn against "things getting out of hand," according to ISBA spokesman David Anderson. ISBA members are concerned that major changes in tort law may be made to take care of what may only be a cyclical problem in the liability insurance industry. "We do not like to see limitations placed on the ability of people to seek redress in the courts," Anderson said.

Trial lawyers are sure to take exception to ICIC-proposed amendments to the Code of Civil Procedure to set caps on attorneys' fees similar to legal fee caps in medical malpractice suits. The ICIC would also limit the amount of punitive damages in personal injury and product liability cases to three times the amount awarded for economic loss.

Another major ICIC proposal would award any punitive damages to the state Department of Rehabilitation Services, Dart said. The money might as well go directly to the agency which will be providing the rehabilitation services to the injured person, according to Dart.

The ICIC proposals specifically affecting the liability insurance industry would extend the required time between notification and cancellation of a policy, as well as require an explanation for the cancellation.

As the proposals work their way through the legislature, they will be faced with strong opposition, not only from the trial lawyers, but from citizens' advocacy groups, like the Illinois Public Action Council and Patrick Quinn's Coalition for Political Honesty, and from the state AFL-CIO. These organizations blame the insurance industry itself for the crisis and say only regulation will prevent future crises. Reforming the tort system, these groups believe, will force the victim to bear the brunt of poor management and investment decisions made by insurance companies.

Besides the insurance emergency, the following were listed as issues which interest groups would like to see fine-tuned this session.

• Unemployment Insurance. The Illinois State Chamber of Commerce (ISCC) and IMA will both be working with the AFL-CIO to renegotiate their agreement to pay off the state's unemployment insurance debt. The General Assembly will have to approve any plan, which business hopes will be more in its favor than the 1983 agreement, according to ISCC spokesman Joseph Ciaccio. Labor negotiators will be looking to unfreeze benefits, according to AFL-CIO President Robert Gibson.

• Extension of sales tax exemption for business equipment. Both the ISCC and IMA are also pushing to exempt computer-aided design equipment from the state sales tax. Computer-driven manufacturing equipment was exempted last session.

• Labor issues. Gibson listed the following: a stricter community "right to know" law applied to hazardous wastes, limits on the ability of an employer to require a lie detector test as a condition of employment and rules for the use of video display terminals in the work place, including government offices. He also wants the legislature to improve the efficiency of the state Industrial Commission, which handles claims under the Workers' Compensation and Occupational Disease acts. Gibson cited a backlog of some 6,000 cases before the commission, resulting in "unconscionable" delays of judgments.

• Education. While business and labor keep a wary eye on each other, education interests will be making sure there is adequate funding to implement last year's reform measures. The State Board of Education (SBE) issued preliminary budget estimates in November calling for a $359.9 million increase for fiscal year 1987. State Supt. of Education Ted Sanders told the SBE that the increase is needed to support current programs as well as those instituted under the reforms. The Illinois Education Association supports the increase, but it will again seek passage of a constitutional amendment requiring the state to provide at least half the total cost of public education. The state currently picks up about 40 percent of the education bill.

School administrators, on the other hand, are focusing their efforts to fight any further legislative attempts to force school districts to reorganize or consolidate. Part of the education reform package included tax incentives for districts to consolidate. The Illinois Association of School Boards (IASB), representing about 900 boards, supports school district consolidation or reorganization when done to improve instruction, according to spokesman Ron Cardoni. It does not agree with the need for consolidation based on enrollment or location. While the IASB decided not to work directly to repeal the legislation, Cardoni predicted action by lawmakers from those areas of the state most affected. Doing some fine-tuning of his own, Gov. James R. Thompson reassured school officials he had no intention of forcing them to consolidate districts.

• Budget. The fiscal 1987 budget itself will command attention. Predictions of a tight budget preclude much latitude in the way of increased spending, according to legislative insiders. The passage of education reform, Build Illinois and other new programs last session was linked with projected growth in the taxes, new and old, needed to support them. If projections are not accurate, the state could be left without enough money for too many new and expanded programs.

Action on all these matters is not likely to take place until after Easter, which this year comes on the heels of the governor's March 5 budget message and the March 18 primary election.

44/February 1986/Illinois Issues