Lawsuit abuse impacts all Oregonians.
From doctors and patients to consumers, schools, governments and businesses of every size, lawsuit abuse places an undue burden on all of us.
In 2016, legal costs and compensation paid in the U.S. tort system totaled $429 billion, equivalent to 2.3% of U.S. GDP. In Oregon, tort costs were equal to $3,105 per household.
Lawsuit abuse also disproportionately impacts small businesses, many of which survive on small margins. Studies have shown that litigation costs small businesses across the country over $105 billion each year, and that one in three small business owners have been sued or threatened with a lawsuit, which often force those small businesses to close for good.
Oregon ranked number 25 in the 2019 Lawsuit Climate Survey, conducted on behalf of the U.S. Chamber Institute for Legal Reform, which analyzes how fair and reasonable individual states’ liability systems are perceived to be by U.S. businesses. Between 2017 and 2019, Oregon fell in six of the survey’s 10 key element categories, including the “Having and Enforcing Meaningful Venue Requirements” category.
Liability protection is a vital component of allowing our businesses, schools and medical providers to operate fairly, efficiently and without placing undue burden on consumers or community members. These entities need consistent and fair treatment by our legal system, which is what ORLRC advocates for every day.
Liability protection is a vital component of allowing our businesses, schools and medical providers to operate fairly, efficiently and without placing undue burden on consumers or community members. These entities need consistent and fair treatment by our legal system, which is what ORLRC advocates for every day.
Issues + Legislation
Non-Economic Damage Caps.
Since its formation, ORLRC has advocated on behalf of consumers and medical providers to maintain Oregon’s cap on non-economic damages, ensuring injured patients receive fair compensation, while preserving access to health care.
In our effort to protect consumers and improve access to health care, ORLRC has successfully defeated damage cap legislation at the Capitol every session for the last ten years.
However, the conversation around non-economic damage caps has evolved and changed over last ten years. While the Supreme Court ruled in July 2020 in the Busch vs. McGinnis Waste Systems, Inc. case that the previously established $500k cap on non-economic damages is unconstitutional, ORLRC will continue to work to protect against additional statutory changes.
Limiting the Expansion of Lawsuits.
Businesses and employers often face a variety of issues during the legislative session that would expand their liability with both employees and consumers. ORLRC has worked hard to ensure that new employment regulations passed by the legislature do not include a private right of action when possible, or at a minimum give employers time to implement solutions before allowing for suits. ORLRC also works to ensure that the Unlawful Trade Practices Act is not expanded to include additional causes of action that would hurt Oregon businesses.
Second Suit Legislation.
Second suit legislation would allow personal injury lawyers seeking damages from a policyholder to file a second suit against a defendant’s insurance company for “bad faith,” forcing insurance companies to face excessive litigation, unwarranted bad faith claims and coercive settlements. States that have second suit legislation have seen soaring insurance costs, increased fraud, insurance marketplace aberration and more lawsuits.
ORLRC has defeated second suit legislation in Oregon multiple times over the last decade, but expects to continue to see this issue in future legislative sessions, threatening all of Oregon’s employers, businesses and consumers.
Private Attorneys General Act (PAGA).
Under PAGA in California, a plaintiff can seek penalties not only for the Labor Code violation that affected them, but also for different violations that affected other employees. However, despite being virtually identical to class action cases, PAGA claims are generally not subject to the same requirements of class certification, as courts do not make plaintiffs prove that they can proceed on a representative basis. PAGA penalties can also be stacked on top of other penalties provided by the Labor Code. Because PAGA claims are “representative” actions on behalf of a state, these claims are not subject to arbitration agreements signed between an employee and an employer.
PAGA continues to be a serious threat for employers throughout Oregon, as it is used to create outrageous potential exposure for employers and then use that leverage to extort higher settlements. PAGA legislation in Oregon would have encouraged lawsuits over minor violations while discouraging employees from using existing enforcement procedures to resolve problems and seek redress.
The Oregon Legislature introduced PAGA legislation that mirrored California’s law in the 2019 session. ORLRC successfully defeated PAGA in 2019 but anticipates that it will continue to be an issue that will need to be addressed in future legislative sessions.