Insurance firms reap harvest from new law

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6 SOCIALIST ACTION OCTOBER 1987 Insurance companies have joined lawyers, doctors, and business interests to further erode California consumers' right to compensation for personal injury.

Under a new law, rammed through the legislature at the 11th hour, customers may no longer sue for damages if they use a product that is known to be unsafe.

Besides tobacco and alcohol interests, manufacturers of such products as sugar and high cholesterol butter can destroy their customers' health with impunity. This measure is so broad even autos may be considered dangerous products, freeing the industry from suits for defects.

To win punitive damages, a consumer will now have to prove with "clear and convincing evidence" that the plaintiff's conduct was "despicable" and intentional. Not many cases will meet these stringent criteria This law was passed in the final hours of of the California legislature's 1987 session through a series of back-room deals that offered something to every interested party -except the consumers. They were left entirely outside, desperately trying to find liability insurance at a price they could afford.

Liability has been unaffordable for the last decade, as insurance companies have held up the public to force changes in the liability laws. In 1986, voters passed an initiative measure that made it harder to collect damages. They were promised lower insurance rates. Instead, insurance rates went up, and so did the industry's profits.

Instead of smoky back rooms, a Chinese restaurant was the venue of last-minute wheeling and dealing. Legislators and lobbyists scrawled proposals on cocktail napkins and the back of business cards. Speaker of the Assembly Willie Brown scurried among the tables collecting memos, carrying them to unseen parties in an upstairs room.

The next day, Brown declared a deal had been worked out. Among its clauses was an agreement that no one would launch an initiative campaign on this subject for five years.

The bill was put on a special fast track through the legislature. This meant changing a rule that may have prohibited such deals being made and convening a HOW CAN ollo •Mal Manatate A Cart Finamore hastily called "public" hearing at which no member of the public spoke. With the way thus greased, the bill slid through the Assembly by a vote of 60-10, and the Senate by 24-1.

Some legislators said they were "ashamed" by the unseemly haste with which the bill was rammed through. But the lopsided vote indicated what power the insurance lobby can wield. Politicians professing to be "friends of labor" or friends of the consumer were practically nonexistent on this occasion.

This insurance ripoff in California must arouse the public in every other state in the nation. It will be repeated wherever the DEMOCRACY IN AMERICA:

Fact and Fiction 4 Marxist analysis of the se orces that central the U Army St., insurance companies can get away with it. Only mass action by labor, consumer groups, and workers in general can mobilize the forces to stop the insurance industry's offensive.

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Dynamies of the Revolution by Mamentamin and Jeff Marider