Stopping the Trial
Lawyers’ Agenda
A primary election battle over insurance law, the plaintiffs’ bar legislative attack on arbitration and protective orders, and reforming California’s bizarre unfair competition law rank high as civil justice issues affecting the business community as the Golden State moves into the new millennium.
A March 7 “no” vote on Propositions 30 and 31 will block a personal injury lawyer-sponsored plan that would drive up insurance premiums by permitting more lawsuits against insurers. Business liability costs would increase, along with coverage costs borne by homeowners and motorists.
On the legislative front, lawmakers this year are taking a second look at a number of trial lawyer proposals introduced in 1999. One scheme gaining national attention from lawsuit-wary (and weary) businesses is Senate Bill 1254 (Schiff) which would remove much of the confidential protection usually given documents gathered during the early stages of a lawsuit, even if the information would never be admitted at trial.
In 1999, a coalition with nearly 150 businesses and associations, including high tech, the movie industry, financial institutions, and agriculture, successfully stalled this ill-conceived bill. The bill is back in 2000, still threatening to force the release of trade secrets and business plans of any company sued over an alleged product defect, environmental hazard or financial fraud, even if the information is found to have no bearing on the case. Trial lawyers could use this information to develop new lawsuits.
Arbitration will be a major issue in 2000, just as it was last year. A new trial lawyer-sponsored Assembly Bill 1751 (Kuehl) seeks to interfere with the ability of consumers to resolve health-plan disputes through the use of cost-effective and efficient arbitration agreements. A second measure, AB 858 (Kuehl), seeks to prohibit arbitration agreements between employers and employees.
Although business and consumers are on the defense against many damaging proposals in 2000, the new millennium will also provide the state Legislature and governor a chance to enact some positive reforms to our civil justice system.
Case in point: California’s infamous Unfair Competition Law. This law has evolved into a tool enabling private attorneys to file frivolous suits and leverage huge settlements in all types of cases. Under UCL, private attorneys can sue without a plaintiff or evidence of damages, and can often sustain a suit merely by alleging a business’ activity to be “unfair.” The law exposes businesses to numerous suits by different lawyers over the same alleged unfair practice.
Punitive damages, which continue to grow both in size and unpredictability, will again be before the Legislature. Will lawmakers follow the example of other states which have attempted to set up fair parameters for this “defective legal product”?
In addition to saying “no” to the already too-powerful trial lawyers, lawmakers should begin to reconstruct a civil justice system that will fairly compensate people injured by the negligence of others, but stop rewarding those who use the law primarily as a device to gain ever-higher settlements and attorney fees.
John H. Sullivan
President
Civil Justice Association of California
Sacramento
California’s powerful personal-injury lawyers are working furiously to stack the deck against our state’s small businesses by pushing Props 30 and 31, which would drive many small businesses out of the marketplace because of higher insurance costs and increased litigation.
The personal-injury lawyers characterize their self-serving efforts as “reform.” But a broad-based coalition of consumer, small and large business, ethnic, public safety, education, local government, agriculture, labor, taxpayer, insurers and senior citizens’ groups knows better. They vigorously oppose Props 30 and 31 on the March 7 ballot.
Under Props 30 and 31, personal-injury lawyers could sue not only the party they think is responsible for an injury (read small business owner), but also that party’s insurance company. No matter how groundless or absurd the lawsuit, insurance companies will be forced to settle cases rather than face the threat of enormous legal fees associated with a trial. These costs for claims will be passed along to small businesses in the form of higher premiums.
The state’s non-partisan Legislative Analyst warns that Props 30 and 31 “would likely increase liability insurance costs in California.”
Homeowners, local governments, schools and others who purchase supplemental liability policies would all also face higher insurance costs.
Martyn B. Hopper
California State Director
National Federation of Independent Business
