Business Leaders Praise 'Fair Share Act' Passage in Pennsylvania

HARRISBURG, Pa., June 27, 2011 /PRNewswire-USNewswire/ -- An odyssey to improve Pennsylvania's legal climate that has spanned a generation, just met its first major success.  But more work and a lengthy journey still lie ahead, say some of the Commonwealth's pre-eminent business leaders.

On Monday, the Pennsylvania House of Representatives adopted by a 116-83 vote, the Fair Share Act sending the joint and several reform measure to Governor Tom Corbett for his signature.

"This is an important win for making Pennsylvania more competitive," said Pennsylvania Business Council Chairman Denis P. O'Brien, president and CEO of PECO.  "But it's just the first step in comprehensive legal reform."

Under current law, a person who bears even a relatively small portion of responsibility for injury or economic loss can be held liable to pay 100 percent of the damages owed to the injured party; that is each defendant is "jointly liable" with all others for the full value of the damages.  About 40 other states have passed various types of reform in which parties are "severally liable"; that is they pay damages only proportional to their degree of fault.  If 25 percent of an injury or loss is found to be the responsibility of a single defendant, that defendant pays 25 percent of the judgment.

The Fair Share Act, says Thomas L. VanKirk, Chairman of Buchanan Ingersoll & Rooney, and a PBC Policy Roundtable member, will make civil lawsuits fair and more predictable.  "The legislation says that, from now on, liability shall be several – but not joint – where the defendant's liability for the damage or loss is less than 60 percent of the total liability of all defendants, except under four exempted circumstances," explained VanKirk.  "This means that a defendant who bears the preponderance of responsibility can still be held jointly liable, but parties who bear little or only partial responsibility for an injury or loss could be held to pay no more than their proportional share of the judgment."  VanKirk commented that defendants are often inclined to settle a lawsuit rather than litigate even if they played little role in the case because they fear the random, lottery-like nature of the civil court system that might hold them to pay all or most of the judgment.  "Even if they win, a defendant can spend huge sums on legal fees defending themselves," said VanKirk, "so they are apt to settle as the lower cost alternative."

John T. Tighe, III, founder and CEO of TMG Health, said joint and several reform benefits a wide range of Pennsylvania interests.  "Small and large businesses alike have identified Pennsylvania's legal climate as a hindrance for starting and growing an enterprise in the Commonwealth," said Tighe.  "But the inherent unfairness of joint liability has hurt our doctors, hospitals, nursing homes, colleges, universities, and municipal governments.  Passage of the Fair Share Act benefits everyone and ultimately saves tax dollars."

O'Brien said that PBC, other business associations, medical professionals and health care providers, non-profits and local government organizations will continue to press for other legal reforms that make Pennsylvania more competitive.  "There was a lot of hard work through a coalition of interests," said O'Brien.  "And we benefitted from the strong leadership of House Majority Leader Mike Turzai, Senate Majority Leader Dominic Pileggi, and Governor Tom Corbett – all of whom made passage of the Fair Share Act a top 2011 priority."

PBC President & CEO David W. Patti said the continuing effort will include passage of "benevolent gesture – or the so-called apology bill" for medical practitioners; an end to "venue shopping" when trials are transferred to jurisdictions known for more permissive courtrooms and more generous jury awards; creation of a "statute of repose – essentially a statute of limitations" for product liability cases; protection of "innocent sellers" who played no role in the design or manufacture of a product; and a limit on "non-economic damages – so-called 'pain and suffering' awards."

Patti said the four exemptions from several liability protection underscore the fairness of the reform.  According to Patti, those four exemptions are:

1. A suit including an intentional misrepresentation;
2. A case of intentional tort;
3. A suit concerning the release or threatened release of a hazardous substance under the Hazardous Sites Cleanup Act; or
4. A civil action in which a defendant has violated section 497 of the Liquor Code.

Patti said identical legislation was signed into law in 2002 by Governor Mark Schweiker, but thrown out by the Pennsylvania Supreme Court on procedural grounds.  The legislation was adopted again by the House and Senate in 2006 only to be vetoed by Governor Edward Rendell.  Now the measure is on its way to Governor Tom Corbett for his signature.  

SOURCE Pennsylvania Business Council