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Liability cap cries out for fix

Oregon Legislators have known for some time that the $200,000 cap on lawsuits against public agencies was an unrealistically low limit and vulnerable to legal challenge. But the usual forces that all too frequently discourage constructive action by the Legislature — namely lobbyists — have kept lawmakers from addressing this conspicuous problem. Such legislative inaction no longer can be tolerated, however, now that the Oregon Supreme Court has ruled that the $200,000 cap violated the constitutional rights of 9-year-old Jordaan Michael Clarke. The young Clarke, whose family resides in Clark County, Wash., suffered permanent brain damage in 1998 while undergoing cardiac surgery at Oregon Health and Science University. The boy’s family filed a $17.3 million lawsuit, but was limited by the liability cap of $200,000 in damages because OHSU is considered a state agency. In its Dec. 28 decision, the Oregon Supreme Court ruled — appropriately — that such a limitation on liability was an insufficient remedy for the pain and injuries that the boy and his family endured. Ruling has wider implications While the court’s ruling will allow greater justice for the Clarke family, it also threatens to unravel the safety net that protects all taxpayer-supported agencies in Oregon from large legal judgments. In their written opinions in the Clarke case, Supreme Court justices were careful to say that their decision applied only to this specific case — the court did not strike down liability limits for all public agencies. But the decision does shake what little confidence anyone had left in the defensibility of a $200,000 limit in this era of multimillion-dollar court judgments. Clearly, the $200,000 cap sits as a ripe target to be challenged by lawyers representing plaintiffs who believe they have suffered damage at the hands of government agencies or employees. The potential loss of the liability caps has real implications for agencies, such as school districts, cities, counties, fire and park districts, and the taxpayers who support them. At OHSU, which receives only a small portion of its revenues from the state, administrators already are planning how to withstand a $30 million budget hit — due to increased insurance premiums and the need to bolster reserve funds. In response, OHSU likely may reduce services in Portland and in outlying areas of the state, where it operates medical clinics and provides professional training. Other agencies could pay more. For example, the federal government recently accused the Oregon State Hospital of violating the safety and constitutional rights of many patients. Legislators need backbone These looming liabilities make it imperative that the Legislature start thinking less about special interests and more about the public good. The 2007 Legislature considered raising the liability cap to a more reasonable range of $1 million to $2 million, but failed to act. The 2008 Legislature, which meets in February, must do better. Even with belated legislative action, OHSU will be stuck for years with higher costs. That’s because its insurers will want to make sure the higher limits can withstand challenge before they reduce premium costs. The 2008 Legislature meets in February and must act to provide greater predictability and stability for OHSU and all public entities by not delaying any longer the obvious need for change.