Insurance Industry Gears Up for Battle on "Tort Reform"


The insurance industry will have to gear up for another battle of California's “tort war,” which has be

en reignited with the introduction of SB 1528 by Senate President Pro Tempore Darrell Steinberg.  The "tort war" pits personal injury attorneys against insurance and business groups over the rules governing lawsuits.

SB 1528 would overturn one of recent legal history's most closely watched state Supreme Court decisions, dealing with recovery of medical costs by injured parties.

In August of 2011, in a 6-1 ruling, the Supreme Court limited how medical damages could be calculated in auto accidents and other personal injury cases.  The issue in the case (Howell v. Hamilton Meats) was whether an injured person could collect the full medical bills imposed by doctors, hospitals and other medical care providers, or would be limited to the amounts actually paid by insurers.

The case, stemming from a 2005 collision in San Diego County, involved $200,000 in medical bills that were whittled down to $60,000 before payment.  The trial judge decreed that only the smaller amount need be paid, while an appellate court said it should be the full amount, and the issue landed in the Supreme Court.

Steinberg's Senate Bill 1528, would "require, in order to ensure the public policy of all injured persons being compensated equally, that an injured person is entitled to recover the reasonable value of medical services provided without regard to the amount actually paid..."

The measure's sponsor, Consumer Attorneys and California, clashes every year with the insurance industry and business groups over the rules governing lawsuit -- who can sue whom and collect what damages.  Insurers contend that were the Howell ruling overturned, it would cost them $3 billion a year in payouts and result in higher insurance premiums.  Personal injury attorneys typically take about a third of judgments in such cases.