Double Lawsuit Bills

Minnesota personal injury lawyers are backing self-serving legislation that, if passed, will allow double lawsuits and open the floodgates to more fraudulent insurance claims and more frivolous lawsuits. The result of these Double Lawsuit Bills will be higher rates for all types of insurance and higher costs for goods and services for virtually all Minnesota consumers. The only winners will be the trial lawyers who stand to make millions.

That is why a broad-based coalition of Minnesota consumers, businesses and civic groups are joining together to oppose these ill-conceived, Double Lawsuit Bills. Minnesotans Against Fraud and Higher Insurance Costs understands that the ability to simply threaten multiple lawsuits for a single event will give lawyers profound leverage in forcing settlements and will force Minnesota consumers and businesses to bear the costs through higher insurance premiums for virtually ALL types of insurance including homeowners, auto, general liability, etc. The best way to stop these lawyer-sponsored laws from taking effect is to join the chorus of opposition and demand that legislators protect consumers against fraud and higher insurance costs.

MORE LAWSUITS, MORE FRAUD

Personal injury lawyers want these new laws so they can get huge attorney fees by not only threatening to sue the party they think is responsible for the injury, but also the party's insurance company. Two lawsuits mean double the chance to win and double the fees for trial lawyers. It also means that there will be greater incentive for insurance fraud.

HIGHER COSTS TO CONSUMERS

These additional lawsuits mean that as insurers are forced to pay higher settlements, and as more questionable claims are paid due to the threat of a frivolous lawsuit, insurance costs will increase. Two lawsuits for every insurance claim will surely increase costs for consumers.

In fact, a California study showed that by creating a loophole to allow two lawsuits for every accident, premium costs grew from 11%-19%. Since these proposed laws apply to virtually all insurance, Minnesota consumers will likely see significantly higher auto, homeowners and commercial liability premiums.

In addition, consumers may be further impacted as higher insurance costs force many small businesses - such as mom and pop stores, restaurants and retailers - to pass increased costs on to consumers. Small businesses are least able to afford these additional costs and as a result, we will all pay.

MINNESOTA WILL BECOME A HOTBED FOR FRIVOLOUS LITIGATION

These extreme, self-serving proposals will encourage more litigation in our state. Even if a case has only a nominal damage award for the injured party, the personal injury lawyers stand to make millions in higher attorneys' fees to line their own pockets. No other state will have the same opportunities for lawyers to make substantial profit from frivolous lawsuits and ultimately it will make Minnesota a hotbed for more litigation, overwhelming our already strained judicial system.

SELF-SERVING TRIAL LAWYERS WILL WIN

These Double Lawsuit Bills are being pushed by trial lawyers who want to benefit themselves, not consumers. The lawyers sponsoring these bills stand to make millions of dollars by merely threatening to file two lawsuits for every accident and forcing consumers and their insurance companies into huge out-of-court settlements to avoid lengthy and expensive litigation.

A: Virtually every insurance policyholder in Minnesota will suffer the negative consequences of these self-serving bills. Written by personal injury lawyers to benefit themselves, these laws would allow two separate lawsuits for a single claim. The lawyers behind or supporting these bills stand to make millions of dollars by threatening to file multiple lawsuits, forcing consumers and their insurance companies into huge out-of-court settlements to avoid lengthy and expensive litigation.

Q: Who is backing these Double Lawsuit Bills?

A: These Double Lawsuit bills were written by personal injury lawyers for the sole benefit of personal injury lawyers. If passed, these bills will result in a massive increase in the number of lawsuits filed, drastically increase costs for consumers and their insurance companies and give personal injury attorneys double the chance to win big fees on a single case.

Q: How will these laws affect me?

A: The consequences of these bills are far reaching and will affect every policyholder in Minnesota causing higher costs for virtually ALL lines of insurance , including auto, homeowners, general liability, etc. Good drivers will be punished as their insurance rates rise, even if no claim is filed. In fact, when similar law was in effect in California (it was later reversed by the California Supreme Court and then rejected by voters), a California study showed that these types of laws can drive up auto insurance premiums as much as 14.5 percent. Homeowners will face higher costs and an increased threat of lawsuits for such a thing as an accident on their property.

Q: Who opposes these Double Lawsuit Bills?

A: A growing coalition, called Minnesotans Against Fraud and Higher Insurance Costs is working to convince the Legislature to reject these ill-conceived bills. Minnesotans Against Fraud and Higher Insurance Costs is a broad-based coalition of consumers and taxpayers, businesses and civic groups. To get involved, please visit our website at www.nohigherrates.com.

Do you think the personal injury lawyers are looking out for your interests? Think again.

Myth Personal injury lawyers are pushing this legislation to protect consumers.
Fact This isn't the first time the trial bar has tried to dupe consumers. Personal injury lawyers in California tried to convince voters that frivolous lawsuit laws protect consumers, but on Election Day, more than two-thirds of the voters said NO. Now, Minnesota personal injury lawyers are trying to get legislators to push through a new law that would allow them to sue insurance companies in addition to the individual or business that caused an injury. This doubles their opportunity to win and doubles their fees. It sweetens the incentive to commit insurance fraud and file frivolous lawsuits. Lawyers win. Consumers lose.

Myth Insurance companies pay the cost of frivolous lawsuits, not consumers.
Fact The cost of litigation increases the price consumers pay for all goods and services including insurance. A California study showed that by creating a loophole to allow two lawsuits for every accident, premium costs grew from 11 percent -19 percent. Since these proposed laws apply to virtually all insurance, Minnesota consumers will likely see significantly higher auto, homeowners and commercial liability premiums.

Myth Consumers have no recourse when their insurance company denies or delays payment of a claim.
Fact The Minnesota Department of Commerce enforces laws that protect consumers who have a dispute with their insurer. The vast majority of insurance claims are resolved in a timely fashion, with few complications. But when a dispute arises, consumers can file a complaint with the Department, which can take action against insurance companies if necessary.

Myth These types of laws don't encourage insurance fraud.
Fact The ability to file and possibly collect on multiple lawsuits is a powerful incentive for those who might be tempted to cheat insurance companies by committing insurance fraud. It also discourages insurance companies from investigating questionable claims, including arson-for-profit and staged auto accidents. Honest consumers end up paying for insurance fraud through higher premiums.

St. Paul - Just two weeks after its launch, over 2000 Minnesotans have joined Minnesotans Against Fraud and Higher Insurance Costs to urge the legislature that they oppose the double lawsuit bills sponsored by the Minnesota Trial Lawyers Association that would raise cost of insurance for consumers.

Under current law, Minnesota is in step with the vast majority of states and already has enacted laws that require insurance companies to act in good faith. The Minnesota Department of Commerce enforces these laws on behalf of consumers. What's more--implied in every insurance policy is a covenant of good faith and fair dealing.

The increased costs associated with this legislation could have significantly negative effect on the insured as well as those who work to insure integrity in insurance investigations, Tom Brace former Minnesota State Fire Marshall.

For more information, visit us at www.nohigherrates.com or contact us at info@nohigherrates.com

The most important step in stopping these Double Lawsuit Bills from being passed is to send a strong message to the Legislature that consumers deserve to be protected from fraud, higher insurance costs and frivolous lawsuits. You can help by registering with our website at www.nohigherrates.com. or contacting:

Minnesotans Against Fraud and Higher Insurance Costs
P.O. Box 14177
St. Paul, Minnesota 55114
1-888-343-0725

INDIANAPOLIS - May 23, 2007 - The Minnesota Association of Farm Mutual Insurance Companies (MAFMIC) and the National Association of Mutual Insurance Companies (NAMIC) stated today that "consumers win" with the legislative defeat of harmful Bad Faith "Double Lawsuit" proposals.

If passed, the "Double Lawsuit" proposals would have allowed trial attorneys to sue not only the party they think is responsible for an injury, but that party's insurance company as well.

"Minnesota insurance consumers should breathe a sigh of relief," said Wes Gainey, president of MAFMIC. "Passage of the 'Double Lawsuit' proposals would have authorized third-party bad faith and direct action claims against insurance companies."

Despite passage of the House version, HF 2389, sponsored by Rep. Joe Atkins, Senate Commerce Committee Chair Tarryl Clark, the primary sponsor of SF 2173, failed to garner enough support in that chamber to justify a floor vote Sunday evening, solidifying the ultimate defeat of the proposals.

"The Minnesota Trial Lawyers Association was behind this very aggressive, self-serving effort to line their pockets," stated Joe Thesing, NAMIC's director of state affairs. "If passed, this legislation would result in increased frivolous lawsuits and fraudulent claims, resulting in higher costs for consumers."

Efforts to defeat the Bad Faith proposals took a positive turn in early May when Republican Gov. Tim Pawlenty threatened to veto the Omnibus Public Safety bill if it was presented to him with the Bad Faith language included. "We thank Gov. Pawlenty and the legislators who stood up for insurance consumers and said no to trial attorneys," Gainey said.