Legislation to reform the nations class action tort system was signed into law by President Bush Feb. 18, just one day after it was passed by the House. The legislation, which took several years to win passage in Congress, is the first bill to be signed by the President during his second term.
“By working together over several years, we have agreed on a practical way to begin restoring common sense and balance to Americas legal system,” the President said during a signing ceremony at the White House. “The Class Action Fairness Act of 2005 marks a critical step toward ending the lawsuit culture in our country. The bill will ease the needless burden of litigation on every American worker, business and family. By beginning the important work of legal reform, we are meeting our duty to solve problems now and not to pass them on to future generations.”
The newly signed law, known as S. 5, is designed to prevent abuses in the class action system, such as “venue shopping” by making it easier to remove class action cases to the federal court system. Additionally, the law increases judicial oversight of settlements, most notably “coupon settlements” in which class members receive coupons instead of a monetary settlement.
“The bill requires judges to consider the real monetary value of coupons and discounts, so that victims can count on true compensation for their injuries,” Mr. Bush said. “It demands settlements and rulings to be explained in plain English, so that class members understand their full rights.”
Frank Keating, president and CEO of the American Council of Life Insurers, hailed the bills being signed into law, as well as those who led the lobbying efforts resulting in its passage.
“President Bush deserves high marks for his determination in getting the reform legislation enacted into law,” Keating said. “Congress also deserves great credit for acting quickly this year to address class action abuses. In addition, Tom Donohue and the U.S. Chamber of Commerce earned special recognition for their role on this issue. Without the leadership of Tom and Chamber, it is not clear whether wed be celebrating today.”
The new law, Keating said, “will help remove the threat of frivolous lawsuits by, among other things, ensuring cases involving people from varying states will be heard in federal courts. No longer will certain trial lawyers be allowed to hunt for a jurisdiction that will easily grant class action status to a case involving people from around the country.