Alliance says Calif. Liability ‘Reforms’ will Promote Construction Defect Lawsuits

A package of so-called “liability reform” bills that are quietly making their way toward enactment during the final hours of California’s legislative session will flood California’s already overburdened court system with litigation, according to the Alliance of American Insurers.

The bills, touted as a liability trade-off benefiting the building industry, are co-authored by Senate President John Burton (D) and Assembly Speaker Herb Wesson (D). SB 800 purports to provide lawsuit relief to builders of entry-level housing. In return, the plaintiffs bar wants more time to file lawsuits and lower barriers to frivolous lawsuits under SB 688 and SB 1698. The bills have had no public hearing or debate.

“If enacted, SB 800 will scare off what few intrepid insurance companies that are left in the California contractors liability market,” said Peter Gorman, vice president of the Alliance’s Western Region.

“Plaintiffs attorney lawsuits have already effectively shut down townhouse and condominium construction in the state, and SB 800 does nothing to restore housing construction,” Gorman said. “If anything, the bill will bury it deeper by creating further problems for the state’s already troubled insurance market for commercial property and liability coverage.”

SB 800 includes an onerous list of actionable defects that go far beyond existing case law and creates strict new construction standards that are almost impossible to achieve in the construction industry.

Topics Lawsuits California Construction