Barbara Levering
(202) 828-7494
blevering@aiadc.org

AIA: CONSUMERS, INVESTORS. INSURERS & JUSTICE WIN WITH TORT REFORM
Bipartisan Committee Vote Advances Reform

WASHINGTON, DC, June 29, 2000 - The American Insurance Association welcomed passage of S. 353, the Class Action Fairness Act, by a bipartisan majority of the Senate Judiciary Committee, calling it a win for consumers, investors, insurers and justice. AIA noted in particular the invaluable contribution of Committee Chairman Hatch and bill sponsors, Senators Grassley and Kohl in securing this crucial step toward enacting class action reform.

"AIA's 370 property and casualty insurers, along with their customers, are among those who have suffered from class action abuses. It is a type of double indemnity. Insurers defend our customers, for whom we provided commercial liability insurance, when they are sued. Increasingly the insurance industry has itself become a target of state class action suits," Robert E. Vagley, AIA president, said.

AIA has mounted a vigorous campaign to secure passage of class action reform legislation. Early in June, CEOs of member companies made congressional visits. Vagley has sent personal letters to key Senators. Along with other supporters of reform, AIA staff has worked actively to educate staff and members on the ramifications of delaying reform.

"Thanks to the leadership of Senators Hatch, Grassley and Kohl, the Judiciary Committee passed, with bipartisan support, a bill crucial to consumers and insurers - class action reform," Vagley said. Calling for enactment, Vagley pledged that AIA will "continue to work with you and other members of Congress to restore fairness to the class action system."

When enacted, S. 353 will end abuses of the system and restore balance to the system. Specifically it will re-establish federal authority over interstate cases so the rights of consumers in all states are protected while it will maintain exclusive state authority over intrastate cases. Equally important, it will help ensure that when a case merits a settlement, the plaintiff will receive a fair and equitable amount, not just a coupon.

"This pro-consumer bill will fix an anachronism in our federal law that has allowed class-action attorneys to circumvent the Constitution, cherry-pick clients and shop around for a favorable forum. This abuse of the system spiraled out of control. It has cost society billions of dollars. It is harming both plaintiffs and defendants. Furthermore, it is undermining American's faith in our judicial system," said Vagley.

The American Insurance Association is a trade association representing more than 370 major insurance companies which provide all lines of property and casualty insurance. AIA's headquarters is located in Washington, D.C. and the association has representatives in every state. All AIA press releases are available at www.aiadc.org.