Limited Tort Reform Passes Virginia Assembly

Virginia‘s 2013 General Assembly session has now concluded.  A package of Tort Reform bills met with mixed results—some passing, and other’s failing.  The bills that did pass (discussed below) will impact civil practice in Virginia, and should be of interest to business and insurance clients.  Of particular note are the proposed changes to summary judgment practice, permissible venue in suits against businesses and evidence of fees and costs in situations where plaintiffs suffer last minute nonsuits.

SB1317 amends Code § 8.01-262, and limits venue options for plaintiffs who file suit against businesses that operate in several localities across the state.  While venue is still permissible where a corporation’s principal office or principal place of business is located, venue is no longer proper in localities where a corporation’s president or chief officer resides.  Also, in cases where venue is based solely upon a corporation’s substantial business activity, a “practical nexus” between the business activity and the forum is required.  Under common law, the “practical nexus” requirement is not absolute, which means venue may still be appropriate without it.  SB1317 changes the common law rule thereby making a “practical nexus” absolutely required.  This will likely benefit corporate clients by limiting the available venue options for plaintiffs who are forum shopping around the state for the most favorable venue to file suit.          

HB1708, which amends Code § 8.01-420, profoundly affects summary judgment practice for business and insurance clients.  The changes will allow defendants to use depositions taken under Rule 4:5 to support motions for summary judgment in cases where plaintiffs are seeking punitive damages.  This change is significant in light of Virginia’s long-standing refusal to allow parties to support their summary judgment motions on deposition testimony without agreement by the parties.  However, the new law does not apply in situations where punitive damages claims are based on alcohol and drug use in automobile accident cases. 

Finally, HB1709 lowers the evidentiary burden for defendants seeking reimbursement for witness fees and travel costs in situations where plaintiffs fail to provide notice of nonsuit more than seven days before or during trial.  The bill amends Virginia Code § 8.01-380, and allows parties to introduce into evidence invoices, receipts, or confirmation of payment to prove the reasonableness of payments made to expert witnesses.  This evidence alone, in the court’s discretion, may satisfy the reasonableness requirement without further testimony.  Unfortunately, courts are usually unwilling to reimburse defendants with costs even if they satisfy the existing evidentiary standard so it is unlikely that the new law will have any impact.  Hopefully, the new law will at least encourage plaintiffs to abide by the statutory notice requirements and discourage last-minute, unjustified nonsuits.

One significant victory for corporate clients is the failure of HB1552, which would have increased the statutory cap on punitive damages from $350,000 to $675,000 with an annual adjustment for inflation.        

All of this will take effect July 1, 2013.

Topics:  Proposed Legislation, Punitive Damages, Tort Reform

Published In: Civil Procedure Updates, Civil Remedies Updates, General Business Updates, Insurance Updates, Personal Injury Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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