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October 26, 2011

Third Panel of Legal Reform Summit Examines Unwelcome Lawsuit Trends

While considerable progress has been made in reducing certain litigation excesses in recent years, there are a number of recent trends that threaten to further increase the already hefty litigation burden against businesses.

These troublesome trends were discussed during a panel discussion at ILR’s 12thAnnual Legal Reform Summit.

Kate Adams, general counsel at Honeywell, discussed the rise of a certain type of asbestos litigation, primarily in Illinois, that involves lawsuits against companies that have no proven responsibilities for the plaintiffs’ alleged asbestos exposures. This use of the dubious “civil conspiracy” doctrine threatens to burden job-creating businesses with very costly litigation expenses.

John Bellinger, former legal advisor to the State Department and currently with the law firm Arnold & Porter, gave an overview of transnational tort cases involving the Alien Tort Statute (ATS). The ATS is a 220-year old U.S. federal statute that has been increasingly used to sue multinational businesses in U.S. courts for alleged violations of labor, environmental and human rights standards abroad. A pending Supreme Court case, Kiobel vs. Royal Dutch Petroleum, will determine whether the ATS actually applies to companies in addition to individuals.

James Copland of the Manhattan Institute’s Center for Legal Policy discussed the issue of state attorneys general awarding no-bid contracts on a contingency fee basis to plaintiffs’ firms in order to represent states in litigation. Some AGs have awarded these contracts to plaintiffs’ firms that make large campaign contributions. Copland discussed efforts to pass legislation modeled on the Private Attorney Retention Sunshine Act (PARSA) that will restrict the use of contingency fee contracts with outside firms.

Reining in these and other troublesome trends will be crucial to ensuring that businesses can devote time and resources to creating jobs, not fighting dubious lawsuits.

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