Legislature(2003 - 2004)
05/03/2004 08:17 AM JUD
* first hearing in first committee of referral
= bill was previously heard/scheduled
= bill was previously heard/scheduled
CSHB 549(JUD)am-UNSOLICITED COMMUNICATION:AIRCRAFT CRASH MS. VANESSA TONDINI, staff to Representative McGuire, sponsor of HB 549, told members this bill prohibits an attorney from contacting passengers or their families in the aftermath of an aviation accident for 45 days. She noted that attorneys are bound by rules of professional conduct; Rule 7.3 is applicable to this type of conduct. That rule states: Attorneys shall not solicit by in person or live telephone contact special employment from a prospective client, with whom the lawyer has no family or prior professional relationship when a significant motive for the lawyer's doing so is the lawyer's pecuniary gain. She explained the reason behind Rule 7.3 is that prospective clients who are feeling overwhelmed may find it difficult to evaluate all alternatives with reasoned judgment after an accident. Those situations are fraught with the possibility of undue influence or intimidation. However, even though Rule 7.3 has been in place for some time, it has not controlled the "feeding frenzy" that takes place in the aftermath of awful accidents. The federal government tried to correct the problem by passing the Aviation Disaster and Family Assistance Act in 1996. That law mandated that air carriers provide specific support to families of those injured or killed and prohibited unsolicited contact by attorneys for 30 days. In 2000 that law was amended to expand the scope to include associate agents, employees, or other representatives of attorneys and it expanded the time frame to 45 days. She pointed out that enforcement of the federal law requires action by the Civil Aeronautics Board or the U.S. Attorney General. The penalty for a violation is close to a $1,000 fine. Currently, little enforcement of this law takes place and there is debate about whether the federal law is enforceable against attorneys who violate it regarding accidents that happen entirely within Alaska. She thought everyone would agree that passengers and their families are very vulnerable to pressure by others in the aftermath of an accident, especially in rural Alaska. She pointed out that this bill will apply only to flights that take place entirely inside of Alaska. MS. TONDINI indicated that CSHB 549(JUD)am merely codifies the federal law except that a reference to the air carrier's attorney has been added to make it clear that all attorneys are to refrain from making contact. The main reason that Representative McGuire included a criminal sanction in the bill is because she felt a civil financial penalty would be inadequate because the contingency fees for representing these clients are high. In addition, people are hesitant to file bar complaints against their neighbors in small towns, just as they would be hesitant to file a civil claim. Also, the Alaska Bar Association will take notice of a criminal case. The crime is a class A misdemeanor with a fine of $100,000 or the attorney's legal fee, whichever is greater. TAPE 04-60, SIDE A MS. TONDINI further explained that CSHB 549(JUD)am only prevents attorneys from making initial contact; a client can initiate contact at any time. 10:00 a.m. CHAIR SEEKINS asked if the definition of an "attorney" include an agent or representative of an attorney. MS. TONDINI said it does on page 1, line 10, and in subsection (b). CHAIR SEEKINS said he wanted it on the record that the definition of attorney extends to anyone who is soliciting on the attorney's behalf as well. He then took public testimony. MS. MARCIA DAVIS, ERA Aviation, stated support for CSHB 549(JUD)am. SENATOR FRENCH asked Ms. Davis if she has ever settled a claim that happened on an ERA flight and, if so, when. MS. DAVIS said ERA has settled. When ERA is contacted by someone who claims to have suffered an injury during a flight, ERA asks the person to submit medical bills, which it pays immediately. If the person asks for extraneous damages, such as lost work time, ERA pays those as well if they seem reasonable. However, if ERA believes the person is trying to take advantage of the situation, ERA tries to settle those cases fairly, which sometimes involves offering additional air transportation. She said she cannot think of any cases in which the passenger was dissatisfied with how the claim was resolved when ERA was able to deal with the claim directly. However, in instances, for example, where a person had a bumpy flight out of Bethel and had an attorney write a letter, those situations have not gone well, primarily because the individual did not intend to sue but was encountered by a lawyer. Individuals have admitted that. MR. ART WARBELOW, Warbelow Air Adventures, stated support of CSHB 549(JUD)am. MR. BRUCE McGASSON, Grant Aviation, stated support for CSHB 549(JUD)am. MR. ED GRAEGER, ALG Insurance, stated support of CSHB 549(JUD)am. SENATOR OGAN asked if people who got a bruise on a bumpy flight actually file claims. MR. GRAEGER replied: Unfortunately, what we do see is attorney solicitation of claims for very minor injuries and that's what's part of eating into capacity and cost for providing liability coverage for the various air carriers in Alaska is that minor matters are getting pursued aggressively by counsel and it affects, over a long period of time, the costs of providing perhaps, larger limits for people who are more deserving with more serious injuries. So, our interest in this is to avoid unnecessary solicitation of minor matters so that greater capacity can be available to respond to more serious injuries. He told members ALG Insurance covers the full gamut of aviation carriers. SENATOR FRENCH asked Ms. Tondini if the attorney general would be nervous about filing a civil complaint against a lawyer. MS. TONDINI said she does not know that "nervous" is the right word but she does not believe civil suits would be filed as aggressively as criminal suits would be. She said everyone agrees such conduct on an attorney's part is wrong so the penalty in the bill is strong enough to be worth enforcement. SENATOR FRENCH noted that he asked, at a prior hearing, to hear from people who have been harassed by attorneys. MS. TONDINI deferred to the aviation representatives to discuss some of those situations, however they would not release names to her because of privacy concerns. MS. DAVIS related a current case in which a nose wheel snapped off on a landing outside of Bethel. Although no one was injured at the scene, all passengers were brought to Bethel for medical care as a safety precaution. ERA offered the passengers free tickets. A passenger told an ERA employee that a lawyer contacted him and a friend afterward. The passenger told the lawyer he had no intention of suing but the friend succumbed to pressure from the lawyer and is now pursuing a claim for damages for emotional trauma. She said it is difficult to get people to talk about their neighbors who are sometimes the lawyers. She noted that ERA does not file bar complaints because that is one of the last things it would want to do while in the midst of litigation and trying to settle. In addition, it is problematic from a public relations aspect. CHAIR SEEKINS noted that he would hold CSHB 549(JUD)am until the next day and adjourned the meeting at 10:13 a.m.