PCI Lauds Class Action ‘Best Practices’ for Illinois Courts

November 24, 2004

A proposed rule change governing class action lawsuits that would reportedly benefit Illinois consumers and businesses will likely be opposed by the Illinois State Bar Association (ISBA), according to the Property Casualty Insurers Association of America (PCI).

The proposed new Rule 225, supported by a broad coalition of businesses, insurers and associations, including the Illinois Civil Justice League, was unanimously rejected by the ISBA board earlier this month. The full ISBA assembly will vote on whether to support the proposal on Dec. 12, 2004.

“A class action suit can be a valuable and appropriate litigation tool in many circumstances. However, in Illinois, many jurisdictions have become the venue of choice for frivolous, national class action suits that result in multi-billion dollar awards,” said Laura Kotelman, PCI regional manager and senior counsel. “This proposal merely asks the court to standardize the ‘best practices’ that already exist in most jurisdictions in Illinois and in many other states. Approval of Rule 225 would enact meaningful reform that would improve the practice of law in Illinois while benefiting all consumers.”

Kotelman pointed out that the current Illinois class action rule is not modeled after the Federal Rule of Civil Procedure 23. Illinois does not have a superiority provision requiring that a class action lawsuit must be “superior” to other legal methods for the fair and efficient resolution of a claim or controversy. Rule 225 would amend the Supreme Court rules to include the superiority provision, and make it a requirement.

“Although many Illinois jurisdictions do follow the federal rule, it is not required and therefore not uniformly followed across the state,” said Kotelman.

The proposal also suggests that Illinois courts should generally not certify classes that substantially involve residents and laws of other states.

“We need to defeat the perception that this is the place for ‘out of state lawyers’ to seek to establish national law through Illinois courthouses.” said Kotelman. “Let’s not forget that Illinois taxpayers pay the bill for these unwarranted class actions through the additional costs for the operation of an already overburdened court system.

“The alarm bells should be loud and clear on this issue,” added Kotelman. “Virtually any company in the country, but particularly those based in Illinois, that provides products or services nationally, remains at risk of being held hostage by the class action cottage industry that is trying to take over the state. We are asking the court to approve Rule 225 to ensure that the handling of class actions is fair and consistent in every jurisdiction in Illinois.”

During the recent election, Illinois proponents of class action and tort reform backed Republican Lloyd Karmeier who handily defeated Democrat Gordon Maag with a 54 to 46 percent margin in a race for the Illinois Supreme Court, 5th District. This district has reportedly long been a haven for frivolous lawsuits and unwarranted class action suits.

“The election results demonstrate clearly that consumers in Illinois understand this issue and want change,” said Kotelman. “Our hope is that Rule 225 will be adopted as a reform amendment that will require all Illinois jurisdictions follow the same class action federal rules, fair and balanced. It is clear that the people of Illinois support that approach. PCI hopes that the ISBA and the trial bar have heard the same message and will react accordingly.”

The Supreme Court Rules Committee is expected to make a decision sometime in 2005.

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