AN ACT Relating to payment of judgments for personal injury and wrongful death actions; amending RCW 4.56.110 and 4.56.115; adding a new section to chapter 4.56 RCW; and adding a new chapter to Title 4 RCW.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:

NEW SECTION. Sec. 1. (1) In an action for personal injuries or wrongful death in which a verdict or award of future damages in excess of one hundred thousand dollars is made, the court may, at the request of a party, enter a judgment for periodic installments of such future damages as provided in this chapter.

(2) The court shall enter judgment in lump sum for past damages, attorney fees, costs, and litigation expenses of the plaintiff.

(3) A judgment entered under this section for the payment of future damages in periodic installments shall specify the recipient or recipients of the payments, the dollar amount of the payment, the interval between payments, and the number of payments or the period of time over which payments shall be made. In entering a judgment for the payment of future damages in periodic installments, the court shall ensure that the judgment and method of payment do not improperly operate through calculation of current value or through other computation to increase or decrease the verdict or award beyond the amount intended by the trier of fact as compensation for future damages.

NEW SECTION. Sec. 2. (1) As a condition of entering a judgment for periodic installments of future damages under section 1 of this act, the court may require a judgment debtor who has not made adequate provision for payment of periodic installments to post security sufficient to assure full payment of such future damages.

(2) If the court determines that a judgment debtor has not made adequate provision for payment of periodic installments and is unable to post security sufficient to assure full payment of the future damages, then the court may enter a judgment for the lump sum of the damages, past and future, incurred by the plaintiff against the judgment debtor.

(3) Upon satisfaction of the judgment for periodic installments, the security, or so much as remains, shall be ordered returned to the judgment debtor.

NEW SECTION. Sec. 3. If at any time following entry of judgment for periodic installments under section 1 of this act, a judgment debtor fails for any reason to make a payment in a timely fashion according to the terms of the judgment, the judgment creditor may petition the court which rendered the original judgment for an order requiring payment by the judgment debtor of the outstanding payments in a lump sum. In calculating the amount of the lump sum judgment, the court shall total the remaining periodic payments due and owing to the judgment creditor, and shall not convert these amounts to their present value. The court shall also require the payment of interest on the outstanding judgment.

NEW SECTION. Sec. 4. In cases in which future damages are payable in periodic installments under this chapter:

(1) Unless otherwise agreed between the parties, the liability for payment of any installments for medical or other costs of health care or noneconomic loss not yet due at the death of the judgment creditor terminates upon the death of the person; and

(2) The portion of any periodic payment allocatable to loss of future earnings shall not be reduced or terminated by reason of the death of the judgment creditor, but shall be considered part of the estate of the judgment creditor. In such cases, the court which rendered the original judgment may, upon petition of any party in interest, convert those portions of such periodic payments allocatable to the loss of future earnings to a lump sum by calculating the present value of such payments in order to assist in the settlement of the estate of the judgment creditor.

NEW SECTION. Sec. 5. (1) If, at any time after entry of judgment, a judgment creditor or successor in interest can establish that the continued payment of the judgment in periodic installments will impose a severe hardship, the court may, in its discretion, order that the remaining payments or a portion thereof shall be made to the judgment creditor in a lump sum. The court shall, before entering such an order, consider the following: (a) Whether unanticipated and substantial medical or other needs have arisen that warrant the payment of the remaining payments, or a portion thereof, in a lump sum; (b) whether ordering such a lump sum payment would impose an unreasonable financial burden on the judgment debtor or debtors; (c) whether ordering such a lump sum payment will accommodate the future medical and other needs of the judgment creditor; and (d) whether ordering such a lump sum payment would further the interests of justice.

(2) If a lump sum payment is ordered by the court, such lump sum shall be calculated on the basis of the present value of remaining periodic payments, or portions thereof, that are converted into a lump sum payment. The remaining future periodic payments, if any, shall be reduced accordingly.

NEW SECTION. Sec. 6. Nothing in this chapter shall be construed to limit the right of a plaintiff, defendant or defendants, and any insurer to settle medical malpractice claims as they consider appropriate and in their complete discretion.

NEW SECTION. Sec. 7. Sections 1 through 6 of this act shall constitute a new chapter in Title 4 RCW.

NEW SECTION. Sec. 8. A new section is added to chapter 4.56 RCW to read as follows:

Judgments founded on personal injury or wrongful death actions shall bear interest from the date of filing of the action at the maximum rate permitted under RCW 19.52.020 on the date of filing.

Sec. 9. Section 4, chapter 136, Laws of 1895 as last amended by section 1, chapter 147, Laws of 1983 and RCW 4.56.110 are each amended to read as follows:

Interest on judgments shall accrue as follows:

(1) Judgments founded on written contracts, providing for the payment of interest until paid at a specified rate, shall bear interest at the rate specified in the contracts: PROVIDED, That said interest rate is set forth in the judgment.

(2) Except as provided under subsection (1) of this section or in section 8 of this 1986 act, judgments shall bear interest from the date of entry at the maximum rate permitted under RCW 19.52.020 on the date of entry thereof: PROVIDED, That in any case where a court is directed on review to enter judgment on a verdict or in any case where a judgment entered on a verdict is wholly or partly affirmed on review, interest on the judgment or on that portion of the judgment affirmed shall date back to and shall accrue from the date the verdict was rendered.

Sec. 10. Section 1, chapter 26, Laws of 1975 as amended by section 2, chapter 147, Laws of 1983 and RCW 4.56.115 are each amended to read as follows:

Except as provided in section 8 of this 1986 act, judgments founded on the tortious conduct of the state of Washington or of the political subdivisions, municipal corporations, and quasi municipal corporations of the state, whether acting in their governmental or proprietary capacities, shall bear interest from the date of entry at the maximum rate permitted under RCW 19.52.020 on the date of entry thereof: PROVIDED, That in any case where a court is directed on review to enter judgment on a verdict or in any case where a judgment entered on a verdict is wholly or partly affirmed on review, interest on the judgment or on that portion of the judgment affirmed shall date back to and shall accrue from the date the verdict was rendered.