One frequent concern of private-sector participants in highway PPP projects, particularly those involving operation and maintenance, is the applicability of tort liability protections otherwise available to the state or local highway authority. Many states have sovereign immunity protections, prohibitions on punitive damages against a state agency, or caps on the amount of tort damages recoverable against a state agency. Without similar protections against possible tort claims arising out of accidents, the private sector may be hesitant to accept the risk of operating and maintaining a highway asset. The cost of insurance to cover exposure to unlimited potential damage claims is tremendous. The potential for unlimited tort liability in the absence of sovereign immunity and other protections available to public agencies is a significant concern for private entities that are considering whether to operate or maintain a public highway. One solution to this problem, if politically feasible, is the enactment of state legislation that limits tort claims against a private partner to the damage caps applicable to the public sector. In Missouri, the legislation authorizing the Mississippi River Bridge PPP project210 specifies that tort claims against the private partner shall be limited to sovereign immunity caps of the state.211 Another solution is to avoid the problem by transferring operation and maintenance of a facility back to the public authority after it has been designed and constructed. Some commentators have suggested that some form of shared immunity may be helpful to alleviate this impediment.212
The USDOT Model Legislation provides that nothing in the sample PPP statute is designed to limit any waiver of the sovereign immunity of the state or its employees with respect to its participation in or approval of any PPP transportation facility.213 This sample provision does not address the potential liability of private-sector participants, but merely seeks not to override other state law relating to the potential immunity of the state or its employees.
______________________________________________________________________________
210 Mo. Rev. Stat § 227.663.
211 Tort liability caps for the state of Missouri are set forth in § 537.610 Mo. Rev. Stat., which provides:
212 See Christopher Kane, Lessons Learned in Using Public-Private Partnerships to Deliver Transportation Infrastructure in the U.S. Market, at 32-33 (presented at ABA Forum 2005 Annual Meeting, Apr. 7-9, 2005).
213 USDOT Model Legislation at § 1-113, available at http://www.apta.com/about/committees/public_private/documents/legis_model.pdf.