AN ACT Relating to civil actions; amending RCW 5.60.060, 4.84.030, 4.84.250, 4.84.300, 12.20.060, 7.70.070, 51.24.060, 51.24.020, 4.24.115, 4.16.160, 4.16.310, 4.16.300, 7.06.020, and 48.19.030; adding a new section to chapter 4.22 RCW; adding a new section to chapter 4.24 RCW; adding new sections to chapter 4.56 RCW; adding new sections to chapter 4.84 RCW; creating new sections; recodifying RCW 7.70.070; repealing RCW 4.84.020 and 4.56.240; and providing an effective date.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:!af98,99

NEW SECTION. Sec. 1. PREAMBLE. Tort law in this state has generally been developed by the courts on a case-by-case basis. While this process has resulted in some significant changes in the law, including amelioration of the harshness of many common law doctrines, the legislature has periodically intervened in order to bring about needed reforms. The purpose of this chapter is to enact further reforms in order to create a more equitable distribution of the cost and risk of injury and increase the availability and affordability of insurance.

The legislature finds that counties, cities, and other governmental entities are faced with increased exposure to lawsuits and awards and dramatic increases in the cost of insurance coverage. These escalating costs ultimately affect the public through higher taxes, loss of essential services, and loss of the protection provided by adequate insurance. In order to ensure the continued availability and affordability of quality governmental services, comprehensive reform is necessary.

The legislature also finds comparable cost increases in professional liability insurance. Escalating malpractice insurance premiums discourage physicians and other health care providers from initiating or continuing their practice or offering needed services to the public and contribute to the rising costs of consumer health care. Other professionals, such as architects and engineers, face similar difficult choices, financial instability, and unlimited risk in providing services to the public.

The legislature also finds that general liability insurance is becoming unavailable or unaffordable to many businesses, individuals, and nonprofit organizations in amounts sufficient to cover potential losses. High premiums have discouraged socially and economically desirable activities and encourage many to go without adequate insurance coverage.

Therefore, it is the intent of the legislature to reduce costs associated with the tort system, while assuring that reasonable compensation for persons injured through the fault of others is available. Objective limits and greater predictability in the amount of awards is necessary. The costs of providing reasonable compensation should be reduced whenever it is possible and equitable by eliminating potential windfalls to persons and purposes for which awards were not intended.

PART I

ACCELERATED PHYSICIAN-PATIENT PRIVILEGE

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Sec. 2. Section 294, page 187, Laws of 1854 as last amended by section 1, chapter 56, Laws of 1982 and RCW 5.60.060 are each amended to read as follows:

(1) A husband shall not be examined for or against his wife, without the consent of the wife, nor a wife for or against her husband without the consent of the husband; nor can either during marriage or afterward, be without the consent of the other, examined as to any communication made by one to the other during marriage. But this exception shall not apply to a civil action or proceeding by one against the other, nor to a criminal action or proceeding for a crime committed by one against the other, nor to a criminal action or proceeding against a spouse if the marriage occurred subsequent to the filing of formal charges against the defendant, nor to a criminal action or proceeding for a crime committed by said husband or wife against any child of whom said husband or wife is the parent or guardian, nor to a proceeding under chapter 71.05 RCW: PROVIDED, That the spouse of a person sought to be detained under chapter 71.05 RCW may not be compelled to testify and shall be so informed by the court prior to being called as a witness.

(2) An attorney or counselor shall not, without the consent of his client, be examined as to any communication made by the client to him, or his advice given thereon in the course of professional employment.

(3) A clergyman or priest shall not, without the consent of a person making the confession, be examined as to any confession made to him in his professional character, in the course of discipline enjoined by the church to which he belongs.

(4) A ((~~regular~~)) physician or surgeon or osteopathic physician or surgeon shall not, without the consent of his patient, be examined in a civil action as to any information acquired in attending such patient, which was necessary to enable him to prescribe or act for the patient, ((~~but this exception shall not apply in any judicial proceeding regarding a child's injuries, neglect or sexual abuse, or the cause thereof~~)) except as follows:

(a) In any judicial proceedings regarding a child's injury, neglect, or sexual abuse or the cause thereof; and

(b) Within ninety days of filing an action for personal injuries or wrongful death, the claimant shall elect whether or not to waive the physician-patient privilege. If the claimant does not waive the physician-patient privilege, the claimant may not put his or her mental or physical condition in issue and may not waive the privilege later in the proceedings. Waiver of the physician-patient privilege for any one physician or condition constitutes a waiver of the privilege as to all physicians or conditions, subject to such limitations as a court may impose pursuant to court rules.

(5) A public officer shall not be examined as a witness as to communications made to him in official confidence, when the public interest would suffer by the disclosure.

PART II

OFFERS OF SETTLEMENT

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Sec. 3. Sections 368 and 369, page 201, Laws of 1854 as last amended by section 1, page 337, Laws of 1890 and RCW 4.84.030 are each amended to read as follows:

In any action in the superior court of Washington, the prevailing party shall be entitled to his costs and disbursements((~~; but the plaintiff shall in no case be entitled to costs taxed as attorneys' fees in actions within the jurisdiction of a justice of the peace when commenced in the superior court~~)).

Sec. 4. Section 1, chapter 84, Laws of 1973 as last amended by section 88, chapter 258, Laws of 1984 and RCW 4.84.250 are each amended to read as follows:

Notwithstanding any other provisions of chapter 4.84 RCW and RCW 12.20.060, in any action for damages ((where the amount pleaded by the prevailing party as hereinafter defined, exclusive of costs, is seven thousand five hundred dollars or less, there shall be taxed and allowed to the prevailing party as a part of the costs of the action)), a reasonable amount to be fixed by the court as attorneys' fees((~~. After July 1, 1985, the maximum amount of the pleading under this section shall be ten thousand dollars~~)) incurred after the making of the final offer of settlement by the prevailing party shall be taxed and allowed to the prevailing party, as defined in RCW 4.84.260 and 4.84.270, as a part of the costs of the action. In the event costs, including attorneys' fees are awarded to the defendant, the court shall subtract the costs from the award in favor of the plaintiff, if there is an award of damages to the plaintiff. If there is no award of damages in favor of the plaintiff, the defendant shall receive a judgment against the plaintiff for its costs, as defined in this section. In addition, the prevailing party is entitled to prejudgment interest at the rate of twelve percent per annum from the date of the final written offer of settlement.

NEW SECTION. Sec. 5. A new section is added to chapter 4.84 RCW to read as follows:

The payment of attorneys' fees under RCW 4.84.250 may be excused or modified, in the discretion of the court, where the interests of justice so dictate. If payment is excused or modified, the court shall enter written findings setting forth in detail the basis for the decision to excuse payment.

NEW SECTION. Sec. 6. A new section is added to chapter 4.84 RCW to read as follows:

A prevailing party seeking an award of attorneys' fees under RCW 4.84.250 shall submit an affidavit of attorneys' fees with the cost bill submitted under RCW 4.84.090. In determining the attorneys' fees to be awarded, the court shall take into consideration the criteria for attorneys' fees outlined in the code of professional responsibility as adopted by the supreme court.

Sec. 7. Section 6, chapter 84, Laws of 1973 as amended by section 4, chapter 94, Laws of 1980 and RCW 4.84.300 are each amended to read as follows:

The provisions of RCW 4.84.250 through 4.84.290 and sections 203 and 204 of this 1986 act shall apply regardless of whether the action is commenced in ((~~justice~~)) district court or superior court except as provided in RCW 4.84.280. This section shall not be construed as conferring jurisdiction on either court.

Sec. 8. Section 85, page 237, Laws of 1854 as last amended by section 2, chapter 240, Laws of 1985 and RCW 12.20.060 are each amended to read as follows:

When the prevailing party in district court is entitled to recover costs as authorized in RCW 4.84.010 in a civil action, the judge shall add the amount thereof to the judgment; in case of failure of the plaintiff to recover or of dismissal of the action, the judge shall enter up a judgment in favor of the defendant for the amount of his costs((; and in case any party so entitled to costs is represented in the action by an attorney, the judge shall include attorney's fees of fifty dollars as part of the costs: PROVIDED, HOWEVER, That the plaintiff shall not be entitled to such attorney fee unless he obtains, exclusive of costs, a judgment in the sum of twenty-five dollars or more)). Costs shall include attorneys' fees as provided in chapter 4.84 RCW.

NEW SECTION. Sec. 9. Section 1, page 176, Laws of 1885, section 1, page 9, Laws of 1888, section 1, chapter 44, Laws of 1891, section 1, chapter 48, Laws of 1895 and RCW 4.84.020 are each hereby repealed.

NEW SECTION. Sec. 10. Sections 201 through 207 of this act shall take effect on January 1, 1987.

PART III

ATTORNEYS' FEES

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Sec. 11. Section 12, chapter 56, Laws of 1975-'76 2nd ex. sess. and RCW 7.70.070 are each amended to read as follows:

The court shall, upon petition by a named party in any tort action ((~~under this chapter~~)), determine the reasonableness of ((~~each~~)) that party's attorneys fees. The court shall take into consideration the following:

(1) The time and labor required, the novelty and difficulty of the questions involved, and the skill requisite to perform the legal service properly;

(2) The likelihood, if apparent to the client, that the acceptance of the particular employment will preclude other employment by the lawyer;

(3) The fee customarily charged in the locality for similar legal services;

(4) The amount involved and the results obtained;

(5) The time limitations imposed by the client or by the circumstances;

(6) The nature and length of the professional relationship with the client;

(7) The experience, reputation, and ability of the lawyer or lawyers performing the services;

(8) Whether the fee is fixed or contingent;

(9) Whether the fixed or contingent fee agreement was in writing and whether the client was aware of his or her right to petition the court under this section.

NEW SECTION. Sec. 12. RCW 7.70.070, as amended by this 1986 act, is recodified as a section in chapter 4.24 RCW.

NEW SECTION. Sec. 13. Section 301 of this act applies to agreements for attorney's fees entered into after the effective date of this section.

PART IV

LIMITATION ON NONECONOMIC DAMAGES

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NEW SECTION. Sec. 14. A new section is added to chapter 4.56 RCW to read as follows:

(1) As used in this section, the following terms have the meanings indicated unless the context clearly requires otherwise.

(a) "Economic damages" means objectively verifiable monetary losses, including medical expenses, loss of earnings, burial costs, loss of use of property, cost of replacement or repair, cost of obtaining substitute domestic services, loss of employment, and loss of business or employment opportunities.

(b) "Noneconomic damages" means subjective, nonmonetary losses, including, but not limited to pain, suffering, inconvenience, mental anguish, disability or disfigurement incurred by the injured party, emotional distress, loss of society and companionship, loss of consortium, injury to reputation and humiliation, and destruction of the parent-child relationship.

(d) "Average annual wage" means the average annual wage in the state of Washington as determined under RCW 50.04.355 as now or hereafter amended.

(2) In any action based on fault seeking damages for personal injury or property damage, the claimant is entitled to recover noneconomic losses.

(3) In no action seeking damages for personal injury or property damage may a claimant recover damages for noneconomic losses exceeding the average annual wage multiplied by the life expectancy of the claimant and then multiply the product of such calculation by 0.36. In applying the limits of this subsection, claims for loss of consortium, loss of society and companionship, and destruction of the parent-child relationship which are asserted by one who did not actually sustain bodily injury shall be added to any claims for noneconomic damages sustained by a claimant who did incur bodily injury.

PART V

APPORTIONMENT OF DAMAGES

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NEW SECTION. Sec. 15. A new section is added to chapter 4.22 RCW to read as follows:

In all actions involving fault of more than one entity, the trier of fact shall determine the percentage of the total fault which is attributable to every entity which caused the claimant's damages, including the claimant or person suffering personal injury or incurring property damage, third-party defendants, entities released by the claimant, entities immune from liability to the claimant and entities with any other individual defense against the claimant. Judgment shall be entered against each defendant except those who have been released by the claimant or are immune from liability to the claimant or have prevailed on any other individual defense against the claimant in an amount which represents that party's proportionate share of the claimant's total damages. The liability of each defendant shall be several only and shall not be joint except:

(1) A party shall be responsible for the fault of another person or for payment of the proportionate share of another party where both were acting in concert or when a person was acting as an agent or servant of the party.

(2) The defendants shall be jointly and severally liable for an indivisible claim for personal injury or property damage if the trier of fact determines that the claimant or party suffering bodily injury or incurring property damages was not at fault.

(3) The defendants shall be jointly and severally liable if the cause of action involves a violation of any state or local law relating to solid wastes, hazardous wastes or substances, air, water, or high or low level radioactive wastes or substances. If legislation is enacted in 1986 creating joint and several liability for causes of action relating to solid wastes or hazardous wastes or substances, then this subsection shall be null and void.

(4) The defendants shall be jointly and severally liable if the cause of action involves the tortious interference with contract or business expectations.

(5) The defendants shall be jointly and severally liable if the cause of action involves the manufacture or marketing of a product causing injury to the claimant which cannot be attributed to the conduct of a particular defendant. In such cases the conduct of all defendants must be simultaneous in time, or substantially the same risk of harm to the claimant. The fault of each defendant shall be determined on a market-share basis.!af98,501

Sec. 16. Section 4, chapter 85, Laws of 1977 ex. sess. as last amended by section 5, chapter 218, Laws of 1984 and RCW 51.24.060 are each amended to read as follows:

(1) If the injured worker or beneficiary elects to seek damages from the third person, any recovery made shall be distributed as follows:

(a) The costs and reasonable attorneys' fees shall be paid proportionately by the injured worker or beneficiary and the department and/or self-insurer;

(b) The injured worker or beneficiary shall be paid twenty-five percent of the balance of the award: PROVIDED, That in the event of a compromise and settlement by the parties, the injured worker or beneficiary may agree to a sum less than twenty-five percent;

(c) The department and/or self-insurer shall be paid the balance of the recovery made, but only to the extent necessary to reimburse the department and/or self-insurer for compensation and benefits paid;

(i) The department and/or self-insurer shall bear its proportionate share of the costs and reasonable attorneys' fees incurred by the worker or beneficiary to the extent of the benefits paid or payable under this title: PROVIDED, That the department or self-insurer may require court approval of costs and attorneys' fees or may petition a court for determination of the reasonableness of costs and attorneys' fees.

(ii) The sum representing the department's and/or self-insurer's proportionate share shall not be subject to subsection (1) (d) and (e) of this section.

(d) Any remaining balance shall be paid to the injured worker or beneficiary;

(e) Thereafter no payment shall be made to or on behalf of a worker or beneficiary by the department and/or self-insurer for such injury until the amount of any further compensation and benefits shall equal any such remaining balance. Thereafter, such benefits shall be paid by the department and/or self-insurer to or on behalf of the worker or beneficiary as though no recovery had been made from a third person;

(f) If the claimant, employer, and/or the co-employee are determined to be at fault, the deductions made under (c) and (e) of this subsection do not apply and benefits shall be paid by the department and/or self-insurer to or on behalf of the worker or beneficiary as though no recovery had been made from a third person.

(2) The recovery made shall be subject to a lien by the department and/or self-insurer for its share under this section.

(3) The department or self-insurer has sole discretion to compromise the amount of its lien. In deciding whether or to what extent to compromise its lien, the department or self-insurer shall consider at least the following:

(a) The likelihood of collection of the award or settlement as may be affected by insurance coverage, solvency, or other factors relating to the third person;

(b) Factual and legal issues of liability as between the injured worker or beneficiary and the third person. Such issues include but are not limited to possible contributory negligence and novel theories of liability; and

(4) In the case of an employer not qualifying as a self-insurer, the department shall make a retroactive adjustment to such employer's experience rating in which the third party claim has been included to reflect that portion of the award or settlement which is reimbursed for compensation and benefits paid and, if the claim is open at the time of recovery, applied against further compensation and benefits to which the injured worker or beneficiary may be entitled.

(5) In an action under this section, the self-insurer may act on behalf and for the benefit of the department to the extent of any compensation and benefits paid or payable from state funds.

(6) It shall be the duty of the person to whom any recovery is paid before distribution under this section to advise the department or self-insurer of the fact and amount of such recovery, the costs and reasonable attorneys' fees associated with the recovery, and to distribute the recovery in compliance with this section.

(7) The distribution of any recovery made by award or settlement of the third party action shall be confirmed by department order, served by registered or certified mail, and shall be subject to chapter 51.52 RCW. In the event the order of distribution becomes final under chapter 51.52 RCW, the director or the director's designee may file with the clerk of any county within the state a warrant in the amount of the sum representing the unpaid lien plus interest accruing from the date the order became final. The clerk of the county in which the warrant is filed shall immediately designate a superior court cause number for such warrant and the clerk shall cause to be entered in the judgment docket under the superior court cause number assigned to the warrant, the name of such worker or beneficiary mentioned in the warrant, the amount of the unpaid lien plus interest accrued and the date when the warrant was filed. The amount of such warrant as docketed shall become a lien upon the title to and interest in all real and personal property of the injured worker or beneficiary against whom the warrant is issued, the same as a judgment in a civil case docketed in the office of such clerk. The sheriff shall then proceed in the same manner and with like effect as prescribed by law with respect to execution or other process issued against rights or property upon judgment in the superior court. Such warrant so docketed shall be sufficient to support the issuance of writs of garnishment in favor of the department in the manner provided by law in the case of judgment, wholly or partially unsatisfied. The clerk of the court shall be entitled to a filing fee of five dollars, which shall be added to the amount of the warrant. A copy of such warrant shall be mailed to the injured worker or beneficiary within three days of filing with the clerk.

(8) The director, or the director's designee, may issue to any person, firm, corporation, municipal corporation, political subdivision of the state, public corporation, or agency of the state, a notice and order to withhold and deliver property of any kind if he or she has reason to believe that there is in the possession of such person, firm, corporation, municipal corporation, political subdivision of the state, public corporation, or agency of the state, property which is due, owing, or belonging to any worker or beneficiary upon whom a warrant has been served by the department for payments due to the state fund. The notice and order to withhold and deliver shall be served by the sheriff of the county or by the sheriff's deputy, or by any authorized representatives of the director. Any person, firm, corporation, municipal corporation, political subdivision of the state, public corporation, or agency of the state upon whom service has been made shall answer the notice within twenty days exclusive of the day of service, under oath and in writing, and shall make true answers to the matters inquired of in the notice and order to withhold and deliver. In the event there is in the possession of the party named and served with such notice and order, any property which may be subject to the claim of the department, such property shall be delivered forthwith to the director or the director's authorized representative upon demand. If the party served and named in the notice and order fails to answer the notice and order within the time prescribed in this section, the court may, after the time to answer such order has expired, render judgment by default against the party named in the notice for the full amount claimed by the director in the notice together with costs. In the event that a notice to withhold and deliver is served upon an employer and the property found to be subject thereto is wages, the employer may assert in the answer to all exemptions provided for by chapter 7.33 RCW to which the wage earner may be entitled.

Sec. 17. Section 51.24.020, chapter 23, Laws of 1961 as last amended by section 2, chapter 218, Laws of 1984 and RCW 51.24.020 are each amended to read as follows:

If injury results to a worker from the deliberate intention of his or her employer to produce such injury or if an employer, with wilful disregard of the safety of an employee and in knowing disregard of written recommendations by the product supplier or in knowing disregard of an administrative agency's written notice of a violation of a safety regulation, intentionally (1) removes, authorizes the removal of, or fails to install permanent safety features or devices for the product, or (2) misuses the product, the worker or beneficiary of the worker shall have the privilege to take under this title and also have cause of action against the employer as if this title had not been enacted, for any damages in excess of compensation and benefits paid or payable under this title.

NEW SECTION. Sec. 18. A breach of a duty imposed by statute, ordinance, or administrative rule shall not be considered negligence per se, but shall be considered by the trier of fact as evidence of negligence except any breach of duty relating to electrical fire safety or use of smoke alarms as provided by statute, ordinance or administrative rule, shall be considered negligence per se.

A person intoxicated by liquor or drugs whose actions are found to be more than fifty percent the cause of that person's injuries is guilty of negligence per se. A person whose blood alcohol content is 0.10 or more shall be conclusively deemed to be intoxicated.!af98,600

PART VI

LIMITATION OF ACTIONS--FELONY

NEW SECTION. Sec. 19. A new section is added to chapter 4.24 RCW to read as follows:

No person is liable for civil damages for injury to or death of a person who is injured or killed while in the process of committing a felony. However, nothing in this section shall affect a right of action under 42 U.S.C. Sec. 1983.

PART VII

INDEMNIFICATION AGREEMENTS

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Sec. 20. Section 2, chapter 46, Laws of 1967 ex. sess. and RCW 4.24.115 are each amended to read as follows:

A covenant, promise, agreement or understanding in, or in connection with or collateral to, a contract or agreement relative to the construction, alteration, repair, addition to, subtraction from, improvement to, or maintenance of, any building, highway, road, railroad, excavation, or other structure, project, development, or improvement attached to real estate, including moving and demolition in connection therewith, purporting to indemnify against liability for damages arising out of bodily injury to persons or damage to property:

(1) Caused by or resulting from the sole negligence of the indemnitee, his agents or employees is against public policy and is void and unenforceable;

(2) Caused by or resulting from the concurrent negligence of (a) the indemnitee or the indemnitee's agents or employees, and (b) the indemnitor or the indemnitor's agents or employees, is valid and enforceable only to the extent of the indemnitor's negligence and only if the agreement specifically and expressly provides therefor, and may waive the indemnitor's immunity under industrial insurance, Title 51 RCW, only if the agreement specifically and expressly provides therefor and the waiver was mutually negotiated by the parties. This subsection applies to agreements entered into after the effective date of this 1986 section.

PART VIII

BUILDER LIMITATION

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Sec. 21. Section 2, chapter 43, Laws of 1955 and RCW 4.16.160 are each amended to read as follows:

The limitations prescribed in this chapter shall apply to actions brought in the name or for the benefit of any county or other municipality or quasimunicipality of the state, in the same manner as to actions brought by private parties: PROVIDED, That, except as provided in RCW 4.16.310, there shall be no limitation to actions brought in the name or for the benefit of the state, and no claim of right predicated upon the lapse of time shall ever be asserted against the state: AND FURTHER PROVIDED, That no previously existing statute of limitations shall be interposed as a defense to any action brought in the name or for the benefit of the state, although such statute may have run and become fully operative as a defense prior to February 27, 1903, nor shall any cause of action against the state be predicated upon such a statute.

Sec. 22. Section 2, chapter 75, Laws of 1967 and RCW 4.16.310 are each amended to read as follows:

All claims or causes of action as set forth in RCW 4.16.300 shall accrue, and the applicable statute of limitation shall begin to run only during the period within six years after substantial completion of construction, or during the period within six years after the termination of the services enumerated in RCW 4.16.300, whichever is later. The phrase "substantial completion of construction" shall mean the state of completion reached when an improvement upon real property may be used or occupied for its intended use. Any cause of action which has not accrued within six years after such substantial completion of construction, or within six years after such termination of services, whichever is later, shall be barred: PROVIDED, That this limitation shall not be asserted as a defense by any owner, tenant or other person in possession and control of the improvement at the time such cause of action accrues. The limitations prescribed in this section apply to all claims or causes of action as set forth in RCW 4.16.300 brought in the name or for the benefit of the state which are made or commenced after the effective date of this 1986 section.

Sec. 23. Section 1, chapter 75, Laws of 1967 and RCW 4.16.300 are each amended to read as follows:

RCW 4.16.300 through 4.16.320 shall apply to all claims or causes of action of any kind against any person, arising from such person having constructed, altered or repaired any improvement upon real property, or having performed or furnished any design, planning, surveying, architectural or construction or engineering services, or supervision or observation of construction, or administration of construction contracts for any construction, alteration or repair of any improvement upon real property. This section is intended to benefit only those persons referenced herein and shall not apply to claims or causes of action against manufacturers.

PART IX

PERIODIC PAYMENTS

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NEW SECTION. Sec. 24. A new section is added to chapter 4.56 RCW to read as follows:

(1) In an action based on fault seeking damages for personal injury or property damage in which a verdict or award for future damages of at least one hundred thousand dollars is made, the court or arbitrator shall, at the request of a party, enter a judgment which provides for the periodic payment in whole or in part of the future damages. With respect to the judgment, the court or arbitrator shall make a specific finding as to the dollar amount of periodic payments intended to compensate the judgment creditor for the future damages.

(2) Prior to entry of judgment, the court shall request each party to submit a proposal for periodic payment of future damages to compensate the claimant. Proposals shall include provisions for: The name of the recipient or recipients of the payments, the dollar amount of the payments, the interval between payments, the number of payments or the period of time over which the payments shall be made, modification for hardship or unforeseen circumstances, posting of adequate security, payment of interest, and any other factor the court deems relevant under the circumstances. After each party has submitted a proposal, the court shall select the proposal which in the discretion of the court and the interests of justice best provides for the future needs of the claimant. Any proposal for periodic payments of ten years or more approved by the court must guarantee payments for a minimum of ten years.

(3) Security required for payment under subsection (2) of this section shall be executed by a qualified insurer approved by the office of insurance commissioner.

(a) When the court enters a judgment for periodic payments, each party liable for all or a portion of such judgment shall separately or jointly with one or more others post security in an amount necessary to secure payment for the amount of the judgment for future periodic payments within thirty days after the date judgment is entered. If security is not posted within thirty days, the court shall enter a judgment for the payment of future damages in a lump sum.

(b) If at any time following entry of judgment, 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 converted to present value. The court may also require payment of interest on the outstanding judgment.

(4) Upon the death of the judgment creditor, the court which rendered the original judgment may, upon petition of any party in interest, modify the judgment to award and apportion the unpaid future damages: PROVIDED, That there shall be no apportionment of the balance of the ten-year guarantee provided in subsection (2) of this section. Money damages awarded for loss of future earnings shall not be reduced or payments terminated by reason of the death of the judgment creditor but shall be paid to persons to whom the judgment creditor owed a duty of support, as provided by law, immediately prior to death.

(5) Upon satisfaction of a periodic payment judgment, any obligation of the judgment debtor to make further payments shall cease and any security posted pursuant to this section shall revert to the judgment debtor.

NEW SECTION. Sec. 25. Section 5, chapter 56, Laws of 1975-'76 2nd ex. sess. and RCW 4.56.240 are each repealed.

PART X

MISCELLANEOUS

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Sec. 26. Section 2, chapter 103, Laws of 1979 as last amended by section 3, chapter 265, Laws of 1985 and RCW 7.06.020 are each amended to read as follows:

(1) All civil actions, except for appeals from municipal or justice courts, which are at issue in the superior court in counties which have authorized arbitration, where the sole relief sought is a money judgment, and where no party asserts a claim in excess of ten thousand dollars, or if approved by the superior court of a county by two-thirds or greater vote of the judges thereof, up to ((~~twenty-five~~)) one hundred thousand dollars, exclusive of interest and costs, are subject to mandatory arbitration.

(2) If approved by majority vote of the superior court judges of a county which has authorized arbitration, all civil actions which are at issue in the superior court in which the sole relief sought is the establishment, termination or modification of maintenance or child support payments are subject to mandatory arbitration. The arbitrability of any such action shall not be affected by the amount or number of payments involved.

Sec. 27. Section .19.03, chapter 79, Laws of 1947 and RCW 48.19.030 are each amended to read as follows:

Rates shall be used, subject to the other provisions of this chapter, only if made in accordance with the following provisions:

(1) In the case of insurances under standard fire policies and that part of marine and transportation insurances not exempted under RCW 48.19.010, manual, minimum, class or classification rates, rating schedules or rating plans, shall be made and adopted; except as to specific rates on inland marine risks individually rated, which risks are not reasonably susceptible to manual or schedule rating, and which risks by general custom of the business are not written according to manual rates or rating plans.

(2) In the case of casualty and surety insurances:

(a) The systems of expense provisions included in the rates for use by any insurer or group of insurers may differ from those of other insurers or groups of insurers to reflect the requirements of the operating methods of any such insurer or group with respect to any kind of insurance, or with respect to any subdivision or combination thereof for which subdivision or combination separate expense provisions are applicable.

(b) Risks may be grouped by classifications for the establishment of rates and minimum premiums. Classification rates may be modified to produce rates for individual risks in accordance with rating plans which establish standards for measuring variations in hazards or expense provisions, or both. Such standards may measure any differences among risks that can be demonstrated to have a probable effect upon losses or expenses.

(3) Due consideration in making rates for all insurances shall be given to:

(a) Past and prospective loss experience within and outside this state; and in the case of rates for fire insurance, to the loss experience of insurers as to insurance against fire during a period of not less than the most recent five-year period for which such experience is available.

(b) Conflagration and catastrophe hazards, where present.

(d) Dividends, savings and unabsorbed premium deposits allowed or returned by insurers to their policyholders, members, or subscribers.

(e) All other relevant factors within and outside this state.

(4) In addition to other factors required by this section, rates filed by an insurer on its own behalf may also be related to the insurer's plan of operation and plan of risk classification.

(5) Except to the extent necessary to comply with RCW 48.19.020 uniformity among insurers in any matter within the scope of this section is neither required nor prohibited.

(6) Under no circumstances shall any filing pursuant to the requirements of this chapter be made which would constitute more than a fifteen percent increase over the rate in use one year before the date of filing. No insurance company may cancel a policy as the result of this action by the insurance commissioner.

NEW SECTION. Sec. 28. The insurance commissioner shall submit a report to the legislature by January 1, 1989, on the effects of this act on insurance rates and the availability of insurance coverage and the impact on the civil justice system.

NEW SECTION. Sec. 29. Except as provided in sections 303 and 701 of this act, this act applies to all actions filed on or after August 1, 1986.

NEW SECTION. Sec. 30. If any provision of this act or its application to any person or circumstance is held invalid, the remainder of the act or the application of the provision to other persons or circumstances is not affected.