Two bills that could radically restrict a court’s authority to enter orders that protect settlement agreements and sensitive discovery information from the public eye passed the California Assembly and Senate. Both bills now travel to the other legislative chamber for approval.
The National Association of Independent Insurers (NAII) is one of nearly 400 entities actively opposing both AB 36 and SB 11 because they would discourage settlements as well as increase and extend litigation. In addition, the legislation undermines some of the fundamental principles on which pretrial discovery is based, according to Sam Sorich, NAII’s vice president and western regional manager.
“NAII does not object to relevant regulatory agencies acquiring necessary information to assist them in enforcing the law,” Sorich said. “But a well-established public policy exists that enables parties to rely on the confidentiality assurances in the settlement agreement, and encourages settlement of disputes without trial. AB 36 and SB 11 would create a drop in settlement rates and create a delay in reaching settlements, which would clog the court system and only benefit the trial bar.”
Under current law, the court decides what information is relevant during pretrial discovery and whether any information generated in the process should be protected from public disclosure by a protective order. If passed, both bills would limit the power of courts to keep confidential both settlement agreements not filed with the court and information acquired through discovery, the legal proceeding that involves pretrial depositions and interrogatories.
AB 36, which passed the 80-member Assembly in a 41-4 vote on June 7, applies to lawsuits involving product defects or environmental hazards. SB 11, even more onerous because it also includes lawsuits alleging unfair insurance claims practices, passed the 40-member Senate in a 21-16 vote on June 6. AB 36 moves to the Senate, and SB 11 lands in the Assembly.
Topics California
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