Colo. Joins Vanguard of States Reforming the Civil Justice System

April 21, 2003

Colorado has become the fourth state this year, following Arkansas, Idaho and West Virginia to enact substantive improvements in its tort system. Colorado recently enacted two reform bills and is considering three others that will make even more substantial changes, according to the Alliance of American Insurers.

“By taking steps to rein-in class action litigation while preserving consumers’ rights, the Colorado Legislature is taking an important step toward keeping the cost of insurance affordable,” said Peter Gorman, vice president of the Alliance’s Western Region.

Of the bills enacted, HB 1027, raises the bar for what constitutes a class action by permitting immediate appellate court review of orders granting or denying class action certification. SB 86 regulates contingent fee contracts between governmental entities and private attorneys.

Two other reform bills backed by the Alliance have passed both houses of the Colorado Legislature and await the governor’s signature. HB 1186 allows a claim for punitive damages only after the exchange of initial disclosures and if the plaintiff establishes proof of a triable issue, while SB 231 prohibits a product liability action against a seller of a product unless the seller is also the manufacturer of the product giving rise to the product liability action.

SB 231 also prevents a product liability action against a manufacturer or seller of a product that caused injury if the product was used in a manner or for a purpose other than that which was intended and which could not reasonably have been expected.

Meanwhile, HB 1121 has passed one of the legislature’s houses and is awaiting concurrence. The bill would make an offer of settlement that is accepted in writing within 14 days a binding settlement fully enforceable by the court in which the civil action is pending. The bill also places reasonable limits on and defines “actual costs.”

“The changes being made to these states’ civil justice systems will go a long way toward improving the business climate in each of the four states, translating into greater job opportunities and more predictable pricing on a wide variety of consumer goods and services,” said Joyce Kraeger, an Alliance attorney that closely follows tort reform trends. “They serve as a model that we hope all states follow.”

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