NAII Reiterates Strong Public Policy on Civil Justice Reform

July 25, 2003

The National Association of Independent Insurers (NAII) Board of Governors reiterated its strong support of litigation reform by adopting a comprehensive policy position on the topic at its June meeting.

The policy position adopted by the NAII Board extends the Association’s support for litigation procedure and civil justice reforms from the state to the federal level. The position updated public policy adopted in 1996.

“The U. S. tort system is the most expensive in the industrialized world, equating to a tax of more that $720 on every U.S. citizen in 2003. Barely three years ago the figure was $87,” said Terry Tyrpin, NAII senior vice president, insurance and research services. “There is little control over civil litigation at the present time, but when reforms are enacted insurance markets are more stable and consumers benefit as coverage is more available and pricing less prone to dramatic fluctuations.”

Tyrpin said that NAII does not seek to restrict access to the courts, but to support reforms that provide balance by controlling the “lottery-like” characteristics of the civil justice system and restoring predictability that is crucial to an effective insurance mechanism and a healthy economy.

“The U.S. tort system is highly inefficient, returning only 46 cents on the dollar to the people it is designed to help and only 22 cents on the dollar to compensate for actual economic losses to the very people it promised to make whole. Who is the winner here? Certainly not the consumers or insurance policyholders the courts claim to protect,” said Tyrpin.

The U.S. tort system costs are reportedly more than double that of any other industrialized countries. U.S. tort costs are 2.04 percent of the gross domestic product (GDP). Tort costs were 1.33 percent of the GDP in 1970 and only 0.61 percent of the GDP in 1950.

NAII advocates litigation management reforms that specifically address attorney contingency fees; collateral source rules; frivolous lawsuits; noneconomic damages; state of the art defense and forum-venue shopping.

“It has been widely publicized that certain ‘venues’ attract lawsuits from around the nation because attorneys correctly perceive that a particular court has a bias, rather than being considered even-handed,” said Tyrpin. “Madison County, Illinois was named along with other counties in Alabama, California, Mississippi, South Carolina, Texas and West Virginia in a list created by the American Tort Reform Association (ATRA) as court venues where the term equal protection under the law doesn’t seem to have the same meaning. However, on a more positive note, since 1986, 45 states and the District of Columbia have enacted tort reform legislation addressing most of the priority issues named by the NAII Board in it policy position.”

Tyrpin said NAII supports state and federal reforms in a variety of areas including, but not limited to:

· Asbestos liability;
· Automobile injury liability;
· Class actions;
· Environmental liability;
· Medical liability;
· Other professional liability;
· Premises/operations liability; and
· Products/completed operations liability.

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