February 13, 2005 by Canadian Underwriter
U.S. insurers and their commercial clients are celebrating the passage of class action reform legislation by the U.S. Senate.
The Senate passed S.5, the "Class Action Fairness Act" by a vote of 72-26 on Thursday, and it is expected similar legislation will also be passed by the House, with President George W. Bush already stating his intention to sign the legislation into law. The House had passed similar legislation previously, but attempts to push reforms through the Senate were repeatedly stalled.
"Today, the Senate approved legislation based on common-sense principles that will allow our economy to grow, unclog our court system, and put more jury awards in the pockets of plaintiffs instead of the coffers of the trial bar," says Carl Perks, senior vice president of the Property Casualty Insurers Association of America (PCI).
The Risk & Insurance Management Society (RIMS), which represents commercial risk managers and insurance buyers, also welcomed the legislation. "RIMS applauds the members of the Senate for approving this critical reform, which is long overdue and vital to the continued recovery of the American economy," says RIMS vice president of external affairs Janice Ochenkowski.
Among the provisions of the bill is the removal of multi-state class action cases in excess of US$5 million to the federal court, with the hope of avoiding "forum shopping" of cases to states perceived as more "plaintiff-friendly".
PCI also expressed the hope that the process reflected in the passage of class action reform would also continue with other tort reform efforts including asbestos.