Canadian Underwriter

U.S. Senate Committee passes class action reform; House ponders new asbestos bill

April 14, 2003   by Canadian Underwriter

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Tort reform is the topic of the day in the U.S. where the Senate Judiciary Committee has approved a class action reform bill to move some lawsuits into the federal courts.
By request of the plaintiffs or defendants, class action suits that cut across multiple state borders can be sent to the federal courts if they amount of the case exceeds US$5 million, a move insurers have been pushing for.
“The Class Action Fairness Act of 2003” (S.274), approved by a 12-7 margin, follows a House bill (H.R. 2341) passed along similar lines.
Insurers applauded the movement of cases from state or local courts to federal courts as a means of stopping abuse of the system. “Such state and local courts are frequently under-funded, overburdened, relatively inexperienced in handling complex litigation and, in many cases, are biased toward a particular party,” says Monte Ward, vice president of federal affairs for the National Association of Mutual Insurance Companies (NAMIC).
The Senate is expected to look at the bill following its Easter recess.
At the same time, the House is pondering a new asbestos bill submitted by Rep. Cal Dooley of California. The “Asbestos Victims’ Compensation Act of 2003” would require medical evidence of an asbestos-related physical impairment as a condition for filing a lawsuit, and prohibit awards for the fear or risk of cancer. It also gives the right to move cases to federal court and sets up a “two disease rule” that would see a non-malignant claim as separate from a future cancer claim.
The bill seeks to preserve adequate resources for compensation of those who might become ill in the future.
It is the latest in a series of bills that have been introduced to deal with the outbreak of asbestos-related lawsuits that have bankrupted several U.S. companies.
“Rep. Dooley adds his voice to a growing chorus that is calling for much-needed asbestos litigation reform,” says David Farmer, senior vice president of federal affairs David Farmer.

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