Ralph Nader’s Opposition to Prop. 51
Many of the people who support Proposition 51, the so-called “deep pockets” initiative, are doing so under the mistaken belief that by eliminating the “deep pockets” provision of our liability laws for pain and suffering that the insurance companies will be able to offer liability insurance at affordable prices. This is a misconception.
In states such as Iowa and Kansas, which long ago eliminated the so-called “deep pockets” provisions of their liability laws, the cost of insurance has not declined. While it may be naive to expect the insurance companies to substantially lower rates, it was hoped that cost of insurance would not have risen as rapidly as it has. In fact, the cost of liability insurance has risen to over 600% in some instances. In fact, the insurance companies in these two states are pressuring for even more drastic reductions in liability awards by urging that a cap be put on all judgments.
While Proposition 51 will make a small dent in this problem it will not be the panacea for all of our insurance problems. The problem is a lot more complicated than most people really are aware of. What is really needed is a complete overhaul of the tort system. When a person can sue and win, even in the most frivolous of matters, then it is time for changes to be made.