---

Referendum Against Fraud and Higher Insurance Costs

14 October 1999

Consumers, Seniors, Small Business, and Ethnic Groups Announce Referendum Against Fraud and Higher Insurance Costs

     March 2000 Ballot Targeted to Repeal Recently Approved Legislation:
                             SB 1237 and AB 1309

    SACRAMENTO, Calif., Oct 12 -- Alarmed at the passage of a new
law that could result in a dramatic rise in frivolous lawsuits and as much as
a 15% increase in insurance rates, a diverse coalition of businesses, consumer
advocates, ethnic groups and insurers announced their intention to seek a
referendum for the March 2000 ballot.
    "Drivers, homeowners, small businesses and consumers should not have to
pay higher insurance rates because of insurance fraud and personal injury
lawyer greed," said Michael Johnson, Executive Director of Voter Revolt and
co-chair of Consumers Against Fraud and Higher Insurance Costs.
    Johnson was referring to passage of personal injury lawyer sponsored
legislation SB 1237 that would allow those involved in accidents to file two
lawsuits seeking compensation -- one against the person they believe is
responsible for the accident and a separate suit against that party's
insurance company. The legislation would also allow people driving uninsured
to sue a persons insurance company for compensation, and would dramatically
expand the likelihood of fraudulent insurance claims.
    John H. Sullivan, President of the Civil Justice Association of California
and co-chair of the referendum campaign said, "If SB 1237 and AB 1309 are
allowed to become law, it will put money in the pockets of personal injury
lawyers and uninsured drivers -- and force small businesses and good drivers
to pay higher insurance costs."
    Kirk West, former President of the California Chamber of Commerce and
co-chair of the referendum campaign said he is confident the coalition will
secure sufficient signatures and the public will soundly defeat third-party
lawsuits at the ballot box in March.
    "Once voters become aware that personal injury lawyers are behind this
law, and that it will lead to an increase in insurance fraud and an explosion
of frivolous lawsuits, I am confident they will soundly defeat it at the
ballot box," said West.
    Martyn Hopper, California State Director of the National Federation of
Independent Business said that many small businesses would be hit with a new
wave of frivolous lawsuits. "Small business owners already struggle with too
many frivolous lawsuits against them. If this legislation is allowed to stand,
thousands more lawsuits will be filed every year. Those lawsuits will make
more money for personal injury attorneys, but will cost small businesses and
consumers both time and money."
    Added Betty Jo Toccoli, of the California Small Business Roundtable, "It
is a mistake to think this legislation will only affect auto lawsuits. This
bill gives lawyers the ability to file a second lawsuit seeking millions in
virtually every situation, including 'slip and fall' cases against small
grocery stores and product liability cases against manufacturers. It will harm
our economy and increase costs for consumers."
    Johnson noted that despite the fact these bills were signed only three
days ago, a diverse coalition has already emerged to qualify a referendum.
Members of Consumers Against Fraud and Higher Insurance Costs presently
include Voter Revolt, Consumers First, National Federation of Independent
Business, The Seniors Coalition, California Small Business Roundtable, Civil
Justice Association of California, the American Association of Business
Persons with Disabilities, Citizens for a Sound Economy, select insurance
companies, California Business Properties Association, the California
Association of Newspaper Distributors, Americans for Competitive
Telecommunications and the Black Business Association.