Governor Schwarzenegger is right on the mark by making legal reform one of his top 5 priorities he outlined in the State of the State. Although legal reform was not part of his speech, it is included as one of his five proposals to get California’s economy back on track.
Focusing on the elimination of frivolous lawsuits as a part of our economic recovery is a huge step forward. Governor Schwarzenegger has always understood litigation reform. He is a businessman and and I think he better than most knows what kind of damage a lawsuit can do.
The Governor’s proposal is to focus on on an atmosphere in which businesses can thrive. He will propose a series of changes to regulations governing class action lawsuits, product liability suits and seek to cap punitive damage awards. While the devil is always in the details, this will be huge reform if delivered to the Governor’s desk later this year.
You would think with 1.4 million lawsuits being filed in this state every year that maybe someone would think that this does not exactly drive economic growth. CA CALA did a survey last August in which a majority of California’s registered voters said the state has too many lawsuits and that these lawsuits are costing jobs. In a recent CALA/NFIB survey, two in three small business owners reported that greater protection from abusive lawsuits would allow them to hire more employees.
The voters and taxpayers want legal reform and now that the Governor has called for it, the legislature needs to act. If there was ever a time to act in a bipartisan fashion the time is now. One lawsuit can be the difference between being in business or out of business. Eliminating frivolous lawsuits might not thrill a certain special interest, but it does create jobs. Cross posted at www.cala.com.