ACEC Backs Senate Passage of Class Action Reform Bill; First Step to Bringing Help to Legal System

February 10, 2005

The American Council of Engineering Companies (ACEC) strongly endorsed Thursday’s Senate passage of the Class Action Fairness Act (S.5), as a first step in bringing common sense and meaningful reform to a troubled U.S. legal system.

The Class Action Fairness Act seeks to curb abuses of the class action lawsuit system. Backed by President Bush and Senate Majority Leader Bill First (R-Tenn.), the legislation does not make any changes to substantive law, but instead would allow multi-state class action litigants to move their cases from state to federal court, thus avoiding “judicial hellholes” or certain state courts known for strong consumer bias, anti-business jurors and outrageous jury awards.

“Jackpot justice and lawsuit abuse is out of control in the U.S. legal system and is one of the worst problems facing the business community,” said ACEC President Dave Raymond. “U.S. tort costs have steadily increased reaching a record $246 billion in 2003 — It is important and gratifying to see that this issue is being addressed in Congress and that the President has made this issue a priority for his second term.”

Raymond noted that engineering firms are increasingly becoming victims of lawsuit abuse. “There are always litigants out there looking for what they consider a deep pocket regardless of the facts or the merits of the case,” Raymond said. “As a result, more and more engineers are becoming the answer to the question — ‘who else can we sue?’ — in a legal system out of balance.”

Abuse of the class action lawsuit system includes frivolous claims, gaming of the system to keep cases in lenient state courts, and collusive statements. Too often, lawsuits are reportedly only an attempt to force settlements from a corporation even though the corporation is not guilty of any wrongdoing.

S. 5 is the first component of a larger tort reform effort backed by the Council, which includes legislation to curb runaway medical malpractice awards that drive up the cost of health insurance for engineering firms. ACEC is also supportive of The Lawsuit Abuse Reduction Act, introduced last week by Rep. Lamar Smith, (R-Texas), which tightens the Federal Rules of Civil Procedure to establish mandatory sanctions against lawyers who file repeated frivolous lawsuits.

The American Council of Engineering Companies (ACEC) is the business association of America’s engineering industry, representing approximately 5,500 independent engineering companies throughout the United States.

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