Lawsuit Reform

Congress Passes Meaningful Lawsuit Reform

The Bipartisan Issue the President was Searching For?

President Obama’s State of the Union tried to highlight bipartisan issues that Democrats and Republicans can solve together, but he missed an opportunity in omitting lawsuit reform. Eighty-nine percent of Americans, including majorities on both sides of the aisle, believe our legal system is too litigious, and 83 percent believe it needs reasonable reform.

In light of Congress’ recent focus on piecemeal lawsuit reform legislation, sensible legal reform would be an ideal reform to send to the president’s desk, assuming he wants to work on this bipartisan issue. It should be noted that Illinois state Senator Obama voted in support of a handful of lawsuit reforms, even if his trial lawyer friends may not be too eager to let him sign bills these days.

Last week, the U.S. House of Representatives passed The Furthering Asbestos Claim Transparency Act of 2016.

The Asbestos Claim Transparency Act mirrors the ALEC Asbestos Claims Transparency Act, which creates congruity between the litigation system and asbestos bankruptcy trusts to minimize fraud and preserve resources for the many injured by asbestos exposure. Legal gray area has allowed plaintiffs’ attorneys to simultaneously blame two or more different defendants for the plaintiffs’ asbestos exposure while seeking full damages from both. Unfortunately, this sort of double dipping is a growing trend. Attorneys have not been required to disclose damages received from bankruptcy trusts when bringing litigation for the same injury in the tort system.

Most recently, Garlock Sealing Solutions discovered rampant abuse in litigation against the company. In one particular case, a significant portion of the $24 million awarded against them for a plaintiff’s asbestos exposure may in fact have been unwarranted. For years the plaintiff was exposed to other asbestos products but never mentioned that important detail in litigation, despite seeking compensation separately for the same injuries. In fact, the lead attorney went so far as to deny his client had any exposure to the other products, despite later filing trust claims alleging exposure to those same products. The ALEC model and the federal FACT Act ensure the entire picture is presented at court, so verdicts are fair, complete and awarded against the responsible party.

In September, the U.S. House of Representatives passed the Lawsuit Abuse Reduction Act of 2015, which would allow sanctions against attorneys filing frivolous lawsuits and help compensate victims of abusive litigation. Changes to the Federal Rules of Civil Procedure in 1993 left victims of frivolous claims with practically no recourse. These rules provide unscrupulous lawyers with the ability to demand payment, even when a claim has no basis in law or fact or is brought for purposes of harassment, without the threat of any economic consequences. Consequence-free frivolous litigation against American businesses is a barrier to economic prosperity. The Lawsuit Abuse Reduction Act would eliminate the “safe harbor” that gives frivolous filers an opportunity to withdraw claims at the last minute to avoid sanctions. Additionally, the Act would require the offending party to pay the other party’s attorneys’ fees.

Victims of frivolous litigation should have a fair means of seeking reimbursement of their legal expenses and the ALEC Resolution in Support of Fair Recourse and Effective Deterrence Against Frivolous Claims supports just that.

Congress has clearly signaled that it is willing to pass meaningful lawsuit reform. President Obama should support these reforms that are poised to garner widespread support from bipartisan majorities of the American people.

In Depth: Lawsuit Reform

State legal systems and the liability they exert on businesses and individuals are a disincentive to bad behavior and allow fair players to succeed in the marketplace. When lawsuits inappropriately punish good actors, resources are sucked out of the business economy, away from research & development and job creation. Lawsuit…

+ Lawsuit Reform In Depth