Senate Majority Floor Leader Caleb Rowden (foreground) presents SB 49 to close insurance arbitration and intervention loophole as Sen. Eric Burlison (left) and Chairman Ed Emery (right) discuss.
Associated Industries of Missouri (AIM) President Ray McCarty testified in support of two tort reform bills in the first hearing of the Senate Government Reform Committee, chaired by Sen. Ed Emery.
Senate Bill 7, sponsored by Chairman Emery, is the overall venue and joinder bill. The bill sets the rules that allow for proper venue to be established, especially in cases where a defendant is joined and later dismissed from the proceeding. In those situations today, venue may remain in the court even if the dismissed defendant was the only “tie” to that jurisdiction. Also, the rules for joining defendants or plaintiffs are established in the bill. AIM supports this tort reform measure that will prevent cases from inappropriately being moved to more plaintiff-friendly courts in urban areas.
Also heard was AIM-supported Senate Bill 49, a bill that closes a loophole used by plaintiffs’ attorneys to circumvent legislation we passed in 2017 to allow insurance companies to intervene in certain proceedings where their insured enters into an agreement with the plaintiff against the insurance company. The 2017 changes were intended to allow insurance companies to intervene. In response, plaintiffs’ attorneys successfully argued that simply allowing the insurance company to be “in the room” qualified as allowing them to “intervene” but they should not be allowed to make motions or participate materially in the proceeding. This bill specifically allows intervention and defines it for the court.
Also, plaintiffs’ attorneys were successful in using arbitration agreements to circumvent the process. An arbitration agreement would be established between the plaintiff and defendant and the arbitrator would be jointly chosen by those two parties. Even if the insurance company is allowed to participate, they would be outnumbered in selection of the arbitration referee. SB 49 prevents this practice.
An agreed-upon amendment to the bill will provide compromise language developed by AIM’s member lawyers and insurance company lawyers that protect arbitration agreements entered into prior to the start of such proceedings and ensuring existing provisions of insurance contracts are not negatively affected by the changes. AIM supports the amendments that will be offered as a substitute when the bill moves out of committee.
Here is a video of McCarty’s testimony before the committee on these two bills (thanks to Dean Morgan and Missouri Senate Communications for the video):