Why is legal reform important to Minnesota businesses?

According to a 2003 Tillinghast-Towers Perrin study, the annual direct costs
(economic and noneconomic damages, administration, claimants' attorney
fees and defense costs) of the U.S. tort system were $246 billion or
2.2 percent of gross domestic product. If Minnesota's tort system cost 1.8
percent of the state share of gross domestic product, the direct costs
would have been $4.2 billion in 2005.

Class action reform will also discourage the growing number of frivolous lawsuits
that seek class certification. It will eliminate the incentive in the system to settle
cases that defendants face once the class is certified and bring Minnesota’s class
action procedures in line with federal court rules. It could also address the growing
problem of class action cases involving Minnesota’s Consumer Fraud Statute.
Attorney fee legislation would give the courts more authority over the attorney fees
and could provide an incentive to accept reasonable settlement offers. Reducing
the statue of limitations would reduce the legal exposure of Minnesota business.

TwinWest has joined several other trade associations, governmental units,
corporations and individuals who feel reform is needed to make our civil
justice system more fair, efficient, and able to discriminate between valid
cases and those undeserving of the courts’ attention. We support tort
reform because civil justice abuse affects every taxpayer, consumer,
business, and plaintiffs with legitimate cases. Everyone has a stake in
ending the abuse of our justice system.

What guidelines does TwinWest support in approaching legal reform?

• Reform class action litigation statutes and rules. This includes: allowing for an appellate court review of class certification, a stay of proceedings while the certification is being appealed, and reform of the state’s consumer fraud statutes.

• Modify how attorney fees are awarded by giving courts the authority to take into consideration the reasonableness of the attorney fees sought compared to the amount of damages awarded, and prohibiting attorney fees to be awarded after a settlement offer is made if the party claiming attorney fees does not obtain a judgment in excess of the offer.

• Shorten Minnesota’s statute of limitations for personal injury claims to bring it more in line with the majority of states.

• Set limits on non-economic and punitive damages. After a jury fully compensates a plaintiff for their actual damages, the amount of non-economic and punitive damages that can be recovered should be limited.

• Enact “loser pays” or “modified loser pays” requirements.