Group Seeks Measure to Help Stem Insurance Liability Crisis

A group of businessmen and attorneys announced Wednesday that they will try, as a means of stemming the current insurance liability crisis, to qualify an initiative for the 1988 primary election that would require legal costs in lawsuits to be paid by losing parties who had refused settlement offers.

“Our proposals will help reduce the number of speculative, frivolous claims and expedite genuine dispute resolution, hence cut costs for everyone,” said Robert N. Noyce, co-chairman of the recently formed California Legal Reform Project.

Noyce, a former president and chairman of the board of Intel Corp., told a Palo Alto news conference that his group will arrange for its measure to be introduced in the Legislature first.

But the project’s president, San Jose attorney Thomas A. Skornia, said it is assumed that the proposal will be opposed by the influential trial lawyers’ lobby, and legislative approval is regarded as highly unlikely. He said his group intends to raise up to $500,000 to finance the effort to qualify the initiative through petitions.

A spokesman for the California Trial Lawyers Assn. was quick to confirm that his group will oppose the measure both in the Legislature and, if it gets there, on the ballot. He said that such a move would, in effect, bar access to the courts to people of average means and thus curtail “victims’ rights.”

Legal Reform Project leaders released statistics indicating that lawyers and the costs of litigation consume nearly as much of the money won in lawsuits as the clients get, and that in 75% of jury trials the average cost of processing the case is greater than the amount in dispute.

They said the time and expense involved in fighting lawsuits deplete many businesses’ resources, resources that they claimed would otherwise be put to use lowering product costs.