For the insurance companies, which would benefit generally from any agreement that helps their clients avoid large judgments, the bill included provisions expected to cut down markedly on the number of cases in which insurance companies must provide independent legal counsel for their clients.
In exchange, the trial lawyers would receive the right to collect higher fees in malpractice cases, which would increase to 15% from 10% for damage awards greater than $600,000. In addition, through the innovative "peace pact," lawyers would be assured that none of the other groups would seek legislation or an initiative to further limit attorney fees.
The apparent agreement follows closely behind the trial lawyers' recent settlement with cities and counties, which included a package of bills aimed at protecting governments and public officials from liability lawsuits.
Hit by Consumer Groups
Both deals were criticized by consumer groups, although the private, hastily drafted agreement reached Friday was the subject of harsher rhetoric.
"Insurance companies, manufacturers, doctors and trial lawyers have met to decide the rights of victims injured by some dangerous products," said Harry Snyder, regional director for Consumers Union. "Unfortunately, the victims who will be harmed weren't in the room when the deal was cut."
But Sen. Bill Lockyer (D-Hayward), a key participant in the negotiations, said the consumer activists were too single-minded in their approach.
"They care about one thing and I'm glad they do: the ability of an injured party to get maximum compensation," Lockyer said. "Our job is to try to balance that against the escalating insurance costs and clogged court calendars."
Lockyer said the deal was reached behind closed doors because the negotiations required "very delicate compromise."
"To do that in public means all the lobbyists or spokesmen for each point of view have to be extreme and posture and argue ferociously for their point of view," he said. "That's not conducive to a negotiated settlement."