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Tuesday, May 22, 2007

Good faith dies on the Senate floor

The bill to require insurance companies to act in good faith and to allow direct action against insurers didn't make it through the meat grinder that was the last days of the legislative session. The direct action language gave rise to an extensive -- and some might say dishonest -- advertising campaign about "double lawsuits" and greedy trial lawyers. The Senate decided to drop direct action and a conference committee followed suit.

Then the wrangling about good faith kicked in, reports Wil Fluegel of the Minnesota Association for Justice, formerly known as the Minnesota Trial Lawyers Association. After 14 modifications were made to the bill to accommodate various insurance interests, it was passed off the House floor. It was attached to a finance bill in the Senate but that didn't work because the leadership believed the governor would veto the finance bill if the good faith bill was attached, and it wanted the finance bill to get signed. So then the interested parties began working on a stand-alone bill, but representatives of the insurance industry wouldn't commit, Fluegel said. However, the bill made it to the Senate floor after a provision for punitive damages was dropped. It looked like it might pass, but the Senate commerce committee wanted more hearings and "the wheels came off the bill," Fluegel said.

"There was an earnest effort to work though a compromise that the governor would sign but time ran out," Fluegel said.

Others say that in the end, the "double lawsuit" campaign did the job. "The money big insurance spent spreading misinformation, distortions and outright lies did have an impact," said trial lawyer's lobbyist Joel Carlson.


Peter said...

Um, did you interview anyone who was _opposed_ to the legislation?

Anonymous said...

The ads against this bill were outrageous anti-lawyer ads. Regardless of whatever merits the law change may or may not have had, the ads themselves were objectively deceptive. The premise was to demonize P.I. lawyers rather than to deal with the actual substance of what was really in the proposal. I doubt you'd find a single lawyer who would speak in favor of these ads.

Peter said...


I will assume that "anonymous" (comment above) is not a journalist. Hopefully he/she is not a lawyer, either.

Are there any lawyers among the legislators who voted against it? Are there any lawyers/lobbyists for the insurance industry?

There is certainly no shortage of people who would speak against the proposed bill. I also suspect that there are people who would defend the ad.

I recall an ad by a PI firm where the viewer is put in the perspective of a mangled car wreck and a mean insurance company employee is asking the viewer to sign a document, offering to pry his/her hand free from the wreckage ("Which one do you write with?").

And then there are the lovely teacher's union "mediocrity" ads from this last election season.

Two (three) wrongs don't make a right, but let's not play the victim card too much, here.

Mark Cohen, editor said...

Minnesota Lawyer did do a piece with both sides on the good faith bill last March, see Good-faith bill stumbles in Senate commerce committee.

I suppose one advantage (and disadvantage) of the blog medium is that we can post up quotes that some folks might or might not agree with and let them respond on both sides. Not everything posted here will be the level of a full news story. Every now and then we will post up a controversial statement or quote just to get a discussion going and let the comments flesh out the sides if they want to.

I, for one, certainly would be interested to hear from any lawyers who want to weigh in in favor of those ads. I thought they were terrible myself.

bobby_b said...

Mark, perhaps using the spokesman from the national association that had to change its name in order to hide the bad connotations it had picked up over the years wasn't the heighth of good faith in the first place.

You need some people experienced in both sides of coverage law if you want a truly meaningful and informed discussion of the impact and import of this bill.

bobby_b said...

Oops, make that "state association." Not enough coffee.

Mark Cohen, editor said...

Here at Minnesota Lawyer we like both sides of the trial bar -- defense and plaintiffs. ;) Indeed, if any defense lawyers would like to weigh in on the discsussion one way or the other, we'd be pleased as punch to have you.

The original article that I link to above was a fuller piece with some of the pros/cons of the proposal. In any event, the legislation is dead now, isn't it?

As for the MTLA changing its name, we could have a whole other conversation on that ...