Trial attorney loophole closing bill clears Senate, awaits final vote in House
April 15, 2021 - Following an all-night Senate session and roughly 16 hours of negotiations, the Missouri Senate gave final approval to SS HB 345, sponsored by Rep. Bruce DeGroot. The bill is similar to SB 179, sponsored by Sen. Tony Luetkemeyer who handled the House bill on the Senate floor.
The bill would correct a loophole exploited by clever plaintiffs' attorneys when a defendant enters into an agreement with a plaintiff to cooperate with the plaintiff against the defendant's own insurance company.
In some of these "set up" situations, the defendant and the plaintiff enter into an arbitration agreement, settle on a large amount, then send the bill to the insurer. In others, the courts have held our previous reform legislation allows insurance companies to "intervene" but not file motions or take other meaningful actions in the case. This bill would correct both situations.
"Missouri businesses, and in fact all of us, pay the price for these shenanigans by trial attorneys," said Ray McCarty, president and CEO of Associated Industries of Missouri. "While the immediate target is insurance companies, we all pay the costs through the premiums we pay. We have seen ridiculous results under current law, including a very recent case allowing a person who 'accidentally' stabbed his friend to receive money. This simply must stop," said McCarty.
"After an all-night effort by senators, key allies, and the Missouri Insurance Coalition team, the Senate passed our top tort reform priority," said Brandon Koch, executive director, Missouri Insurance Coalition. "Many thanks and congratulations to all of our members and civil justice reform allies that made this possible."
The compromise bill must now be adopted by the full House, following a review by an administrative committee in that chamber.