Emotion might open the door, but analysis can slam it shut.
That is the fundamental story behind the public’s overwhelming rejection of Propositions 30 and 31, the California trial lawyers’ attempt to boost their fee income by allowing a new type of lawsuit against insurers. We can only hope the same kind of scrutiny dooms a number of other self-serving trial lawyer schemes still pending in the state.
In Propositions 30 and 31, trial lawyers tried to convince voters they needed new lawsuits to “protect” them against a conspiracy by “international insurance conglomerates.”
Fortunately, the trial lawyers’ play on emotions backfired. Informed voters looked to the facts: Propositions 30 and 31 would have raised insurance rates for Californians,benefiting mainly the personal injury lawyers. Objective pollsters found that voters never thought they needed “protection,” and by a three-to-one margin believe they are treated fairly by insurers.
The same analysis that did in Propositions 30 and 31 should now be focused on some of the remaining projects on the trial lawyers’ agenda. Take, for example, arbitration. Personal injury lawyers want to make it illegal for an employer to offer a binding arbitration agreement as part of an employment contract. They say they want to “protect” employees by taking more disputes to courts.
However, when we examine the fact that employees win more cases through arbitration (63 percent) than through court battles (15 percent), we again see that the “protections” the trial lawyers are peddling do not pass the smell test.
The same group of lawyers also want to ban arbitration agreements in health plan contracts , they say to “protect” consumers. Clearly, this is another issue that raises much emotion among the public. Has it escaped the trial lawyers attention that arbitration agreements actually protect those who cannot afford to hire an attorney to represent them in small disputes? The smaller the dispute, the less likely a trial lawyer will take a case on a contingency basis.
Apparently these lawyers only want to protect consumers when the stakes are high. More lawsuits against businesses and health plans viewed as “deep pocket” defendants will benefit lawyers looking for runaway jury awards or large forced settlements. Either way, the costs incurred by these suits will force consumers to pay more for goods and health care. We already have too many Californians without health insurance.
Another proposal that won’t stand up to rigorous analysis is the plaintiffs’ bar bill (SB-1254) to virtually kill the confidential protection of documents gathered in lawsuits, but not admitted at trial. The lawyers again are trying to play on emotions while claiming their bill will protect consumers.
Danger To Trade Secrets
Their bill could actually force the release of trade secrets and proprietary business plans of any company sued over an alleged product defect, environmental hazard or financial fraud. Lawyers could root through this information in a quest for new lawsuits. High tech and biotech companies, with their cutting edge innovations and high-paying jobs, will think twice about coming to, or staying in, California if this law is passed.
The Legislature should take notice that their constituents are applying a new level of scrutiny to the trial lawyers’ so-called consumer agenda. An emotion-based “consumer protection” agenda will not succeed where analysis shows consumer problems do not exist.
Sullivan is president of the Civil Justice Association of California.