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Civil Justice Reform

Issue

How do we reform Minnesota’s civil justice system so that it is more fair and predictable and less costly?

Policy

The Legislature should change Minnesota’s civil justice system by adopting the following reforms:

  • Reform class-action litigation statutes and rules.

    This can be accomplished by allowing for an appellate court review of class certification and a stay of proceedings while the certification is being appealed.

  • Modify how attorney fees are awarded.

    This can be accomplished by giving courts the authority to consider the reasonableness of the attorney fees sought in relation to the amount of damages awarded, and prohibiting attorney fees to be awarded after a settlement offer is made if the party claiming attorney fees does not obtain a judgment in excess of the offer.

  • Reduce Minnesota’s statute of limitations.

    Minnesota’s statute of limitations should be reduced from six to four years to bring it more in line with the majority of states.

  • Reform the consumer fraud statute.

    This can be accomplished by requiring plaintiffs to plead and prove that they individually relied on the alleged violations of the consumer fraud statute.

  • Pass the Personal Responsibility in Food Consumption Act.

    This gives legal protection to producers, manufacturers, distributors and retailers of food or nonalcoholic beverages, among others, from litigation over weight gain, obesity or health conditions allegedly resulting from the long-term consumption of food or nonalcoholic beverages.

In addition, the Legislature should not adopt legislation that allows new lawsuits against insurance companies for their claims-handling practices - commonly referred to as “bad faith” insurance legislation. This legislation would likely increase insurance costs for businesses and individuals, increase the potential for fraud, and make it easier than in most other states to succeed in a lawsuit against an insurer. A new cause of action isn’t necessary, because businesses and individuals already have a remedy for poor claims-handling practices through the Minnesota Department of Commerce.

Business Impact

According to a Tillinghast-Towers Perrin study, in 2005, the annual direct costs (economic and noneconomic damages, administration, claimants’ attorney fees and defense costs) of the U.S. tort system were $261 billion or 2.1 percent of gross domestic product.

Class-action reform will eliminate the incentive in the system to settle cases that defendants face once the class is certified and bring Minnesota’s class-action procedures in line with federal court rules. Attorney fee legislation would give the courts more authority over attorney fees and could provide an incentive to accept reasonable settlement offers. Reducing the statute of limitations would reduce the legal exposure of Minnesota businesses. Reforming the consumer-fraud statute will address a growing area of business litigation. Businesses are facing class-action lawsuits under the consumer-fraud statute by non-Minnesota plaintiffs in part due to the relaxed reliance requirement. Passing the Personal Responsibility in Food Consumption Act will eliminate nuisance and frivolous litigation which is important because some food and agriculture representatives expect Minnesota to be a target for such litigation in the near future. “Bad faith” insurance legislation could increase litigation and insurance costs.

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