Lawsuit Reform

Transparency Weeds Out Unintended Lawsuits

Earmarking by congressmen has received much scrutiny in the public’s eye. Allotting funding for pet projects with high costs and little benefit is something, of late, for which the public has little patience. But these cases, while concerning, are also relatively transparent: a legislator must include language in a bill that explicitly creates the earmark. In state legislatures, however, attempts to earmark future boondoggles for private attorneys go unnoticed and often not understood.

In 2007, legislators in attendance at ALEC’s Civil Justice Task Force Meeting expressed frustration with attempts by private litigators to argue in a lawsuit that the legislature, through some form of regulatory legislation, intended to create a new way for lawsuits to be brought. They would point to ambiguous language in a statute, around which the discussion of enforcement through lawsuit was perhaps never considered or intentionally left out. Careful and intelligent state legislators began including language in regulatory bills stating, where appropriate, that the legislature had no intention of creating new ways to sue. But this task proved cumbersome in that so many of the regulatory bills considered every session seemed to need this sort of language.

During this discussion at ALEC, the Civil Justice Task Force did what it does best: bring the expertise and experiences of legislators from across the country, private sector advisors, and public policy scholars to consider the extent of the problem and craft a well-thought-out policy solution. After months of research and discussion, the Civil Justice Task Force developed and approved as model legislation the Transparency in Lawsuits Protection Act.

The model legislation is simple in approach and targeted in application. It provides a guiding rule for legislators creating policy, judges interpreting legislative intent, private attorneys considering litigation, and plaintiffs and defendants involved in litigation. As ambiguity lends itself to poor legislating and expensive consequences, so clarity and transparency allow for fairness, predictability and the rule of law.

The model bill creates a default rule: new rights to sue are not created unless the legislature explicitly creates them, understanding that the legislature is best situated to explain its own intentions to attorneys, the public and judges. Importantly, more often than not, regulatory legislation includes provisions for enforcement (fines, penalties, criminal offenses, etc.) and allowing private litigation may interfere with meaningful enforcement. (It is important to note here that established and important legal remedies like the doctrine of negligence per se—a claim for someone injured by negligent activity as supported by statute—remain completely preserved under this model legislation.) Simply put, the decision of whether to allow private litigation as an enforcement mechanism is a public policy decision with significant consequences that is best left in the hands of the elected policymakers. In 2008, Georgia became the first state to reform their statutes in this manner.

In states that have passed such reform, businesses, citizens and attorneys no longer have to waste time and money playing trial and error with their legal system.

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