SALEM, Ore. (Legal Newsline)-Efforts to retool Oregon's tort laws should not be jettisoned because of the state's mounting fiscal woes, a state Senate leader told Legal Newsline.

"While the budget will be a major focus of this session, policy committees will have plenty of time to address pressing issues like tort reform," said Senate Minority Leader Ted Ferrioli, R-John Day.

The Oregon Legislature convened this week amid an estimated $1 billion fall in state revenues and unemployment at roughly 8 percent and climbing. On Monday, Democratic Gov. Ted Kulongoski said Oregon is facing one of its worst recessions in years.

Ferrioli said since members of the Ways and Means committees deal with budget issues, policy panels are able to address other matters, such as legal reform, which proponents say would ultimately help boost the state's beleaguered economy.

"Real tort reform can help lower health care costs for Oregon families, small businesses and state government," Ferrioli said Tuesday.

State lawmakers said the need to tackle medical malpractice liability came after a 2007 state Supreme Court ruling that found while public institutions are protected by a liability cap, the protection does not extend to their employees.

Since another state law requires public agencies to pay damages won against their employees, the high court's decision effectively eliminated Oregon's tort liability cap of $200,000 in malpractice cases where the state is involved.

A months-old agreement reached between state officials and Oregon trial lawyers provides for liability protection only for doctors at Oregon Health & Science University in Portland.

Backed by the governor, the plan calls for raising the current liability cap of $200,000 to $1.5 million and eliminating the $100,000 cap on intangible harms.

Political observers say they expect the plan to be put on the back burner as lawmakers try to help the state make ends meet amid the economic downturn.

State Sen. Alan Bates, widely considered one of the state's leading experts on health care policy, told Legal Newsline this month that he will block any tort reform proposal that does not protect all doctors in the Beaver State.

Bates, a family physician and member of the Democratic leadership, said all doctors in Oregon deserve protection from potentially exorbitant malpractice claims, not just those at the state's largest teaching hospital.

"My position is if it's good enough for the doctors at OHSU, it's good enough for every doctor in the state," Bates told Legal Newsline. "If a plan comes through only for them, I will oppose that plan and try to line up the necessary votes to block the plan in the Senate."

The Oregon Legislature has strong Democratic majorities in both houses.

From Legal Newsline: Reach reporter Chris Rizo at chrisrizo@legalnewsline.com.