Synopsis: H.B. 1204 is a bill backed by trucking and insurance companies to restrict damages awarded in all civil lawsuits in Arkansas. The measure limits what people can recover in damages when someone injures them through no fault of their own. The bill sidesteps Arkansas’ “collateral source” rule that prevents someone who wrongfully injures another person from using the injured person’s insurance to reduce what they have to pay.
Why Family Council Opposes H.B. 1204
We appreciate that Arkansas’ lawmakers want to improve the business climate. Families across Arkansas have struggled for years under the weight of increasing health insurance premiums. However, as we reviewed the experience of every other state that has passed legislation similar to H.B. 1204, we learned that premiums have continued to rise in every one of those states. When sponsors were asked about this by members of the House Judiciary Committee, they could provide no assurance that H.B. 1204 would reduce insurance premiums. Sponsors of the bill also failed to make a clear case for how passage of this bill would improve the overall economy.
This bill benefits insurance companies that are headquartered out-of-state and certain business interests at the expense of everyday people. H.B.1204 has terrible ramifications for victims in rare but horrific civil cases. Right now, if someone is injured in an accident through no fault of their own, the wrongdoer and the wrongdoer’s insurance company are liable for the victim’s injuries. H.B. 1204 would let the wrongdoer and his insurance company pay less. The bill makes it possible for those who are at fault to skirt Arkansas’ collateral source rule that prevents the person or business who caused the injury from using the injured person’s insurance to reduce the damages they owe. Under H.B. 1204, the wrongdoer or his insurance company could use the victim’s insurance to reduce what they have to pay. In essence, the wrongdoer would get a discount at the expense of the victim. For example, this means that the ultimate judgment or settlement for rape victims, human trafficking victims, child sex abuse victims, and even victims of gender mutilation and minors manipulated into transgender surgery could be reduced. Lawmakers have expressed the need for a cause of action against big tech if a person commits suicide, sustains injuries, or is harmed because of the prompting or influence of social media. This bill could let big tech companies and their insurance providers pay less in medical bills and other damages than they would under current law.
H.B. 1204 would increase the profits of big businesses like insurance providers and trucking companies by reducing what they have to pay out in claims. Families are frustrated by rising rates and denied claims — all while the insurance industry enjoys record profits. We believe it is important that the general assembly not pass legislation that will help special interests while harming good Arkansans. There are many ways to strengthen the economy and help average citizens at the same time. H.B. 1204 is not one of them.
Current Law
- When people are injured through no fault of their own, they can go to court to make the guilty party pay for their injuries.
- The person or business who caused the injury cannot use the injured person’s insurance to reduce the damages they owe.
- Courts can review evidence and award appropriate damages based on the facts of the case.
- This ensures injured people get fair compensation for harm that others do to them.
What H.B. 1204 Would Do
- H.B. 1204 would affect every civil claim made in Arkansas from now on.
- This bill would affect everything from car accident lawsuits to civil actions against sex traffickers.
- Under H.B. 1204, an injured person’s insurance could be used to reduce what the person or company who caused the injury has to pay.
- A motel that aids or abets sex-trafficking could use a trafficking victim’s insurance policy to reduce what they have to pay for the victim’s injuries.
- A drunk driver who kills or injures a stay-at-home mom could use the mother’s car insurance or health insurance to reduce what he has to pay to her or her family.
- A church leader who abuses a child may get to pay less to the child’s family if the family has insurance.
Additional Points to Consider
- Someone who causes an injury should not benefit from the injured person’s insurance.
- Some families spend upwards of 20% of their total income on health insurance alone.
- Insurance premiums for those families could go even higher if they are forced to use their insurance to pay for injuries that were someone else’s fault.
- H.B. 1204 could penalize regular people who have faithfully paid their insurance premiums.
- There is no indication laws like H.B. 1204 have reduced insurance rates in any other state.
- H.B. 1204 might increase the insurance companies’ profits, but there is no guarantee it will result in lower premiums for customers.
What is wrong with H.B. 1204, the bill to limit the recovery of damages for injuries?
Insurance premiums are already too high, and it is already too difficult dealing with insurance companies, hospital bills, and other issues when a person is injured.
- H.B. 1204 makes this process worse because it skirts Arkansas’ collateral source rule which ensures the person at fault is liable for the damage. If this bill passes, wrongdoers may not have to pay as much when they injure an innocent person.
- Under this bill the one at fault can argue that they don’t have to pay because the injured person’s own insurance, Medicare, or Medicaid has already paid the bill or should pay the bill.
House Bill 1204 increases profits for the insurance industry, nursing homes, hospitals, trucking companies, and other big businesses at the expense of average Arkansans. It allows a devaluing of human life, because when these big companies cause death or injury they will be liable for less in damages.
- A nursing home owner where a resident is neglected and injured would pay less in damages to the victim if this bill passes.
- A trucking company who causes the death or injury of a family would pay less in damages if this bill passes.
- A sex-trafficking victim would collect less in damages from those who are responsible if this bill passes.
- Anyone who is injured in an accident through no fault of their own would collect less in damages from the person or business who injured them.
House Bill 1204 won’t decrease insurance premiums or help Arkansas’ economy.
- Insurance premiums have not decreased in any state where similar legislation has passed.
- There is no evidence that the overall economy has improved in these other states.
It is well within the reach of the Arkansas General Assembly to pass laws that benefit business and the economy without causing harm to citizens. H.B. 1204 ignores a time-honored principle that we all should take care of “the least of these.”
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