MEMORANDUM
TO:

Members of the Senate Judiciary and Appropriations Committees

FROM:

Robert Appel, Executive Director

DATE:

May 13, 2009

RE:

STATE TORT CLAIMS ACT AND THE POTENTAIL FISCAL
IMPACT ON CORRECTIONS OF S. 97—STATE

________________________________________________________________________
TITLE 12: CH. 189. TORT CLAIMS AGAINST THE STATE
§ 5601. Liability of state
(a) The state of Vermont shall be liable for injury to persons or property or loss of
life caused by the negligent or wrongful act or omission of an employee of the
state while acting within the scope of employment, under the same
circumstances, in the same manner and to the same extent as a private person
would be liable to the claimant except that the claimant shall not have the right to
levy execution on any property of the state to satisfy any judgment. The superior
courts of the state shall have exclusive jurisdiction of any actions brought
hereunder.
(b) Effective July 1, 1989, the maximum liability of the state under this section
shall be $250,000.00 to any one person and the maximum aggregate liability
shall be $500,000.00 to all persons arising out of each occurrence. Effective July
1, 1990, the maximum liability of the state under this section shall be
$250,000.00 to any one person and the maximum aggregate liability shall be
$1,000,000.00 to all persons arising out of each occurrence.
TELEPHONE CONVERSATION WITH BILL DUCHAC, DIRECTOR OF RISK
MANAGEMENT DIVISION (RMD), BGS--May 13, 2009
Bill Duchac explained to me that the state tort claims act as set forth
above has the following effects:

1) The enactment waives any sovereign immunity defense up to the
monetary limits set forth in the bill.
2) The enactment also sets for claims that fall within the scope of 12
V.S.A §5601(a), that is claims based on injury to persons or property
based on a state cause of action, a hard or fixed cap of $1,000,000 to
be paid as the “maximum aggregate liability … to all persons arising out
of single occurrence.”
3) Claims brought pursuant to federal statutes, including the Americans
with Disabilities Act or 42 U.S.C. §1983, fall outside the purview of
the state tort claims act and the cap on liability does not apply. In
addition, these enactments of Congress have been held to waive the
states’ sovereign immunity defenses.
4) RMD manages a self insurance retention (SIR) pool to cover the first
$250,000 of any claim against the State. The $250,000 is used to pay out
settlement, judgments as well as cover the costs of litigation (hiring of
expert witnesses, outside counsel, deposition costs and the like.)
5) Each agency, department, commission and board of state government
pays a premium costs to support the SIR pool. The amount of the
premium reflects the claims experience of the entity. The experience
rating runs in 6 year cycles. So if an entity is found liable on a claim in
year three, it will face increased premium costs in years four, five and six.
However, year seven becomes year one and the premium charged to the
entity returns to a base-line premium cost.
6) The state has purchased insurance to cover settlements and judgments
that exceed the $250,000 limit of the SIR pool.
7) During Bill Duchac’s twenty plus years of service in RMD, there has never
been a successful claim for punitive damages made against the State of
Vermont. These claims have, on occasion, been submitted to juries, but
no such punitive damage award has been made.
8) Bill Duchac reported that in the years 2001-2006, the total aggregate
amount paid out of the SIR pool on all claims made against the
Department of Corrections equaled $1,350,000, or $270,000 per year.
This average annual cost is $20,000 more than a single maximum SIR
pool payment of $250,000.
9) Bill Duchac also reported that DOC is not expected to pay dollar for dollar
on each of these pay-outs, but does face the six year cycle of premium
adjustments.