Trial Lawyer Bill Would Bring Chaos
To Already-Overloaded Legal System

SACRAMENTO -- A trial lawyer-sponsored bill designed to drive more legal disputes into court promises to drive the world of employment and consumer transactions into total disorder, according to an analysis done for the Civil Justice Association of California. The bill AB 858 (Kuehl) could, for example, eliminate everything from progress payments for home improvement projects to the ability to buy a used car "as is."

"That the trial lawyers would craft a proposal that runs roughshod over so many ordinary commercial transactions tells us a great deal about their agenda. They really don't care what happens to ordinary consumers and small business, as long as their contingency fee opportunities are increased, " said John H. Sullivan, Civil Justice Association of California president.

Professor Claude D. Rohwer of McGeorge School of Law, who is regularly consulted internationally on contract law, wrote in an analysis: "I must note that the approach used in AB 858 is a step backwards into an era in which legal rights were determined by status and not by party intent."

Rohwer observes that most common law and statutory contract rules are applicable only to the extent that the parties do not agree otherwise.

"Assembly Bill 858 would upset this scheme. Specifically, it would appear to void any contract term by which a consumer or employee agreed to a term that derogates in any way from the 'default' rules that would otherwise govern the transaction."

The trial lawyers' long-standing target is the ability of consumers, employees, and businesses to agree to settle any future disputes through binding arbitration instead of going to court, Sullivan explained. The bigger the prospect of a long and costly courtroom trial, the bigger the chances are for a contingency fee windfall. "The trial lawyer industry has a vested interest in promoting costly litigation that drives up settlements, as opposed to faster, fair settlements," he said.

The bill has already brought a storm of criticism from arbitration experts and practitioners.

Elizabeth O'Brien, president of the San Diego Mediation Center and head of the California Dispute Resolution Council, told a reporter that the bill "implies consumers can't make informed decisions for themselves. It skips the part where the consumer gets to choose between mediation or arbitration of a lawsuit, according to what is best for them."

Stephen VanLiere, San Francisco regional vice president of the American Arbitration Association, was quoted saying, "This legislation assumes that the arbitration process is a bad deal for certain classes of parties to contracts. That's not based on any facts I'm aware of."

Professor Rohwer found that the bill is so far-reaching it calls into question the viability of consumer warranties, employment agreements, collective bargaining agreements, and service agreements which call for payment or down-payment before services are rendered. His analysis promoted him to observe: "I do not exaggerate my point of view when I state that freedom of contract is one of the most under-appreciated freedoms that we enjoy in the U.S."