Grassroots Advocacy Efforts Lead to Passage of Class Action Reform

Class Action Reform Gets President’s Signature

On February 18, President Bush signed the bill in the East Room of the White House, surrounded by Democratic and Republican lawmakers for his first bill-signing ceremony of the year. “This bill helps fix the system,” he said. “Congress has done its duty.”

He also stressed that there is more to do. “Small business owners across America fear that one junk lawsuit could force them to close their doors for good. Medical liability lawsuits are driving up the cost for doctors and patients and entrepreneurs around the country. Asbestos litigation alone has led to the bankruptcy of dozens of companies and cost tens of thousands of jobs, even though many asbestos claims are filed on behalf of people who aren’t actually sick.”

So more work remains to be done. Two of NAMIC’s legal reform key issues still include medical malpractice liability reform and asbestos litigation reform. Class action is a major victory, but NAMIC continues to press on for more reform.

Class action was not passed without its share of dissent. Last year, it passed the House, only be stopped in the Senate by a filibuster. But President Bush made it clear in the State of the Union that he was committed to meaningful class action reform. He later challenged the Senate and the House to get the bill to his desk quickly, “to show the American people that both parties are willing to work together to solve problems. We have a problem with class-action lawsuits; it is a problem that we all recognize and it’s a problem we intend to fix.”

The intention behind class action lawsuits is honorable. They were originally intended to encourage more efficient utilization of the legal system by joining together similarly aggrieved parties into a common legal claim. But before long, a weakness was exploited. Some states had lax certification standards. Class action attorneys flocked to those states to litigate cases that might otherwise lack merit.

President Bush said recently that a “judicial system that lets lawyers look for friendly forums in state courts for ‘junk lawsuits’ is tilted against corporate defendants. Class-action lawsuits have become a problem in the United States. The judicial system is not fair. It is unbalanced; it is tilted.”

And so, after years of political wrangling, a remedy came relatively quickly in February.

Posted: Friday, April 01, 2005 12:00:00 AM. Modified: Wednesday, September 07, 2005 2:41:35 PM.

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We are 1,400 property/casualty insurance companies serving more than 135 million auto, home and business policyholders, with more than $196 billion in premiums accounting for 50 percent of the automobile/homeowners market and 31 percent of the business insurance market. We are the largest and most diverse property/casualty trade association in the country, with regional and local mutual insurance companies on main streets across America joining many of the country’s largest national insurers who also call NAMIC their home. More than 200,000 people are employed by NAMIC members.