View this article online: https://www.insurancejournal.com/news/east/2011/06/28/204334.htm
Pennsylvania Gov. Tom Corbett has signed legislation that is one of his top priorities, a bill that limits the liability for negligence of defendants in some civil court cases.
The state House voted 116-83 on the bill on Monday of this week— the second time in three months the chamber has passed such a measure — and sent it to Corbett’s desk over the protests of Democrats who said that the legislation sought by business groups will come at the cost of innocent victims who are maimed or killed by acts of negligence.
In addition to Corbett, the bill is the top priority of business groups, including the Pennsylvania Chamber of Business and Industry, and passed the GOP-controlled Legislature with solid Republican support.
Earlier this month, the Senate signed off on the bill, called the “Fair Share Act” by supporters, after an angry, emotional debate. Supporters say it will ensure that business owners or other defendants do not pay a disproportionate share of the damages for negligence that are awarded in civil court cases.
Current law holds all guilty defendants potentially liable for 100 percent of damages if their co-defendants cannot pay for the negligence resulting in death or injury to a person or property. That allows a victim’s lawyers to drag a deep-pocketed company or even a small-business owner with little connection to the negligent act into the case because of their ability to pay up, supporters say.
Under the bill, defendants found to be less than 60 percent at fault would not have to pay more than their share of the damages, except for awards in circumstances including intentional misrepresentation, an intentional act, an environmental crime or a liquor law violation. Opponents of the bill say those changes will hurt victims of negligent acts and their families who seek justice in the courts.
Democrats attacked Republican claims that passage would improve the state’s business climate, and said there is no proof that it will lead to new hiring or lower insurance premiums.
“What this is, is just a part of a right-wing agenda attacking the middle class,” House Minority Leader Frank Dermody, D-Allegheny, said during emotional floor debate. “We reward the wealthiest corporations, we punish the innocent victims. It’s not right, this should not pass. This House, we should all be about protecting people’s rights, not taking them away.”
He called the bill the “Wrongdoer Protection Act.”
House Majority Leader Mike Turzai, R-Allegheny, said the bill would bring fairness to the court system and align Pennsylvania’s law into line with those of 40 other states.
“This jobs bill is about people, it’s about communities, it’s about employers and family-sustaining jobs,” Turzai said.
A similar bill has passed a GOP-controlled Legislature twice before in Pennsylvania. After it became law in 2002, House Democratic leaders sued and state appellate courts overturned it on grounds that the bill into which it was written violated the Pennsylvania Constitution’s requirement that bills confine themselves to a single subject.
Insurance agents applauded the signing of the legislation.
“Pennsylvania has long been known for its tort climate,” said Tim Burris, chairman of Insurance Agents & Brokers of Pennsylvania. “The act is a win for consumers, businesses and the insurance industry, which all carry the financial burdens of such a litigious environment.
The Property Casualty Insurers Association of America (PCI) was among the business groups backing the reform.
“This legislation will help improve the state’s business climate by creating more stable and predictable legal climate,” said Richard Stokes, counsel for PCI.
Stokes said the law is “also a victory for consumers” because the legal climate can affect job creation and the cost of goods and services.
Mutual insurers also supported the legislation.
“An equitable judicial system keeps costs fair for insurance carriers, which is especially important to mutual insurance companies. This bill improves the market for Pennsylvania and definitely opens the opportunity for growth and increased competition that will benefit all her citizens,” said Erin Collins on behalf of the National Association of Mutual Insurance Companies.