Senate Puts Class-Action Reform On Fast Track Senate majority leader wants vote on long-debated legislation by week of Feb. 7

Washington

The way was apparently cleared last week for prompt passage of class-action reform within two weeks by the U.S. Senate the traditional bottleneck for the insurance industry's long-sought legislative relief.

That was the implication of the announcement by Sen. Arlen Specter, R-Pa., to hold a markup on such legislation Feb. 3 and to delay introduction until this week of a bill that would establish an alternative claims processing system for those injured by exposure to asbestos in the workplace. (See related story on this page.)

Sen. Specter?s comments followed by one day remarks by Senate Majority Leader William Frist, R-Tenn., that he wants a vote on class-action reform legislation on the Senate floor the week of Feb. 7.

David Winston, senior vice president of federal affairs at the National Association of Mutual Insurance Companies, called Sen. Specter's comments after a closed session of the committee “interesting.”

Mr. Winston explained that this means, in effect, that Sen. Specter's efforts to have his asbestos legislation move through his committee side-by-side with the class-action bill had failed?clearly under pressure from the Senate Republican leadership. “The leadership really wants this [class-action] bill to move,” he said.

“We are pleased that the Senate has decided to establish passage of class-action legislation as a priority,” Mr. Winston said. “This bill will go a long way toward discouraging forum shopping by the plaintiff's bar and reduce efforts by them to 'game the system,' so to speak.”

Joel Wood, senior vice president for governmental affairs at the Council of Insurance Agents and Brokers, added that “the industry, at long last, is going to see this bill enacted.” Hopefully, he added, “the vote will be sufficient to be a bellwether for legal reforms” that is, be strong enough to win support from Democrats for related civil justice legislation, such as tort reform and curbs on medical malpractice litigation.

“Even the comments of Sen. Harry Reid, D-Nev., the minority leader, who was himself a trial lawyer, have been encouraging,” Mr. Wood said. “He is resigned that several moderate members of the Democratic caucus will vote for this.”

But Mr. Wood remained cautious, pointing out that “the House will have its own prerogatives, and the House has always been sensitive for greater reforms than would be acceptable to the Senate. A compromise has always been elusive, and there are those on the House side who wish that this bill be much stronger. But we would rather have 80 percent of something than 100 percent of nothing.”

Dennis Kelly, director of federal media relations at the American Insurance Association, lauded Sen. Frist for establishing class-action reform legislation as a Senate priority. However, he noted, “we would have preferred avoiding having the legislation referred to the Judiciary Committee because it gives Democratic opponents an additional opportunity to attach weakening amendments.” Mr. Kelly added, “We want the bill as is. We will fight attempts to amend it.”

Melissa Shelk, AIA vice president of federal affairs, said, “We feel the climate this year is particularly favorable for passage of this long-overdue fix for the badly broken class-action system.”

Charles E. Symington Jr., senior vice president of federal government affairs for the Independent Insurance Agents & Brokers of America, said the existing class-action system “needs serious reforms to prevent venue shopping and to restore fundamental responsibility and fairness for businesses and consumers alike. We strongly support necessary changes to the class-action system, and we will work hard to help secure the support of members of both parties in Congress for this legislation and other much-needed legal reforms.”

Brendan Reilly, director of federal government affairs for the IIABA, called this “an important step forward.” Mr. Reilly said the legislation “will go a long way toward restoring fairness and timeliness to class-action legislation by weeding out a number of frivolous lawsuits and moving legitimate cases through the system more quickly. It is a 'win-win,' both for businesses and for consumers.”

The House of Representatives has passed class-action reform on three separate occasions, but the legislation fell one vote short the last time it was considered by the full Senate.

Reproduced from National Underwriter Edition, January 27, 2005. Copyright 2005 by The National Underwriter Company in the serial publication. All rights reserved.Copyright in this article as an independent work may be held by the author.

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Senate Puts Class-Action Reform On Fast Track

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