AAI Says Senate Hearing Shows Need for Class Action Reform

August 2, 2002

The Alliance of American Insurers, commenting on the U.S. Senate Judiciary Committee’s hearing on class action reform July 31, renewed its call for approval of the Class Action Fairness Act of 2001 (S 1712).

“We hope the Judiciary Committee will be moved by the testimony to rapidly approve the pending class action bill for review by the full Senate,” Kenneth Schloman, Washington counsel for the Alliance, remarked. “Like its House counterpart (HR 2341), which passed in March, this legislation would eliminate some of most egregious abuses in our current class action system—forum shopping, nuisance suits, class certification and settlements contrary to a plaintiff’s best interests.”

The bill would ease the transfer of national class action suits from state courts to federal courts. Provisions include requiring that notices sent to class-action members be in plain English, coupon settlements will be judicially scrutinized and attorneys will be barred from making settlements that cause members to suffer a net loss.

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