'Tort reform' bill passes Senate, heads to governor's desk

A controversial tort reform bill will be sent to Gov. Sarah Sanders' desk after the state Senate narrowly approved the legislation on Thursday. If signed by the governor, House Bill 1204 would limit the amount of damages plaintiffs can recover for medical bills in personal injury lawsuits.

Opponents of the legislation say it will benefit insurance companies while hurting Arkansas citizens who have paid for insurance coverage and deserve to receive the total amount of expenses billed by a medical provider — not the amount negotiated by an insurance company, which is often less.

Its sponsors, which include more than 40 state representatives and senators, say the reform prevents plaintiffs, and their attorneys, from profiting off of the health care system. With little evidence, they have also said that it would lower insurance premiums in Arkansas and spur economic growth.

In 2024, an almost identical bill in Louisiana garnered widespread support among lawmakers in that state but was vetoed by the governor on grounds that it benefited insurance providers while hurting individuals who were injured on the job, in car crashes or other types of accidents.

The Arkansas Senate was almost evenly split on the bill on Thursday, with some Republicans joining all six Democrats in voting against it. It passed 18-17.

Sen. Missy Irvin (R-Mountain View), one of the main sponsors, said the tort reform would only be limited to damages for medical bills and would not impact other types of compensation, such as lost wages, emotional duress or punitive damages. However, Sen. Clarke Tucker (D-Little Rock), an attorney and an opponent of the bill, said medical costs generally serve as a baseline for other forms of financial recovery in personal injury lawsuits, so reducing medical costs reduces the others by extension.

Sen. Gary Stubblefield (R-Branch) also spoke against it. "The benefit of the discounted [medical bill] amount belongs to the insured person," Stubblefield said. "That's part of what they pay for when they pay insurance premiums each month. The Louisiana governor vetoed the bill in his state because he said it hurts Louisianans. Texas has had this for decades, and their medical malpractice insurance costs are higher than Arkansas's."

Sen. Clint Penzo (R-Springdale) voiced his opposition. He said it should be called the "insurance enrichment program" and that not one of his constituents who has called him about the bill has been in favor of it.

"This won't lower insurance rates or do anything that benefits any Arkansans," Penzo said.

Legal experts said there is a chance the law could be unconstitutional.

Similar tort reforms have been proposed in Arkansas involving limitations on medical expenses. In 2009, the Arkansas Supreme Court ruled a medical-costs provision in the Civil Justice Reform Act of 2003 was unconstitutional on grounds it violated the separation of powers, with the state Legislature overstepping its authority in matters involving the judicial branch. The ruling suggested that similar provisions may be vulnerable to other challenges under the Arkansas Constitution, Jordan Wallace-Wolf, an assistant law professor at the UALR William H. Bowen School of Law, said.

It may also violate the "collateral source rule," a legal doctrine in Arkansas and other states that prevents defendants from using evidence of third-party benefits that reduced the out-of-pocket expenses for a plaintiff. A third party could be an insurance company, donations from the community, or bills paid by a family member or other acquaintance, for example.

Read more of the Arkansas Times coverage of the legislation here.