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Class action reform dies in U.S. Senate


July 11, 2004   by Canadian Underwriter


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With the failure of the U.S. Senate to invoke cloture on its class action reform bill, the legislation is effectively dead, causing widespread disappointment amongst insurers.
Bill S.2062, the “Class Action Fairness Act of 2004”, failed when Republicans failed to get support to end discussion of the bill and force a vote. “This is a missed opportunity,” says Senate majority leader Bill Frist. “Unfortunately some of my colleagues are choosing politics over enacting good public policy. Voting against cloture on this bill delays relief to our judicial system, our economy and jurts average Americans.”
Frist had delayed voting on the bill last month on condition it would be moved directly to a vote following passage of appropriation bills which were deemed more time-sensitive. However, Democrats were able to hold the bill up on the floor and defeat Frist’s attempt at cloture.
Insurers reacted with dismay to the news. “This bill had the support of 62 Senators and this is an incredible opportunity lost,” says David Winston of the National Association of Mutual Insurance Companies (NAMIC). “The legislation is a balanced, common sense solution that addresses the worst abuses of the class action process and rationalizes procedures, while preserving plaintiffs’ legal rights and providing additional protections for consumers.”
The bill would have removed multi-state class actions to federal court, and required review of non-monetary settlements, as well as stricter controls on compensation to lawyers.
“We realize that time is not running out; however, NAMIC remains committed to passing class action reform legislation this year,” Winston says.
The U.S. House already passed its class action legislation more than a year ago.


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