AAI Applauds Senate Committee Approval of Class Action Reform

April 11, 2003

The Alliance of American Insurers (AAI) is commending the U.S. Senate Judiciary Committee for approving the “Class Action Fairness Act” (S 274). This clears the way for full Senate consideration of the measure.

“It’s very encouraging to see the Committee’s support for the measure. This is a much-needed piece of legislation,” Kenneth Schloman, Alliance Washington counsel, remarked. “It hits some of the worst problems in the class-action system – forum shopping, nuisance suits, class certification and settlements not in the best interest of plaintiffs. Consumers will benefit from the quicker hearings and more uniform approach in the federal court system.

“We could not have reached this point without the steadfast, bipartisan leadership of Judiciary Committee Chairman Orrin Hatch (R-Utah) and the strong work of Sens. Charles Grassley (R-Iowa), Herb Kohl (D-Wis.) and Dianne Feinstein (D-Calif.), coupled with a united business community.”

The bill would reportedly ease the transfer of class action suits that are national in nature from state courts to federal courts. The bill would require that notices sent to class members be in plain English, coupon settlements would be judicially scrutinized, and attorneys would be barred from making settlements that cause members to suffer a net loss.

A companion bill (HR 1115) is pending in the House Judiciary Committee.

“We believe this legislation will receive strong bipartisan support when it is considered by the full Senate. It is a balanced solution to a growing problem,” Schloman added.

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