Prop. 103 Author Plans to Head Law Firm : Insurance: Harvey Rosenfield says he will go after companies that have treated consumers unfairly. He intends to keep Voter Revolt organization going.

Harvey Rosenfield, head of Voter Revolt and the author of Proposition 103, the insurance reform initiative, says he plans to form a public interest law firm to go after insurance companies who have treated consumers unfairly.

“For the last three years, we’ve been contacted by thousands of people, complaining about the companies,” Rosenfield said. “We’ve turned them all away, but now we’ve cleared most of the enforcement hurdles on 103 and I think it would be good to set up a public interest firm for people who have been abused by the system.”

Rosenfield said the firm would be nonprofit but might accept part of clients’ damage awards as fees. He said it would not compete with trial lawyers for straight personal injury cases.

Rosenfield has recently become more closely aligned with the California Trial Lawyers Assn. in its fight against no-fault insurance, a concept supported by Gov. Pete Wilson, Insurance Commissioner John Garamendi, an array of consumer and low-income groups and most of the insurance industry.

Rosenfield says he intends to keep Voter Revolt going. But by embarking on a litigation career against the insurance industry, Rosenfield becomes an even more vulnerable target for industry critics in the polarized fight over the future of the insurance system.

Generally, insurers contend that the way to reduce insurance premiums, or at least stem their swift rise, is to curtail litigation and cut the lawyers out of the insurance system. No fault, under which accident victims collect damages from their insurance companies regardless of blame in accidents, is designed to do this.

Rosenfield and his ally, national consumer advocate Ralph Nader, join the trial lawyers in contending that curtailing suits over who is to blame would limit victims’ rights to recover damages. They say premiums should be reduced by cutting company profits and inefficiency.

Recently, after Rosenfield assailed Garamendi and Atty. Gen. Dan Lungren for taking about $85,000 each in insurers’ campaign contributions over their 15-year careers, saying that amounted to “bribery, extortion and corruption,” questions arose about Voter Revolt’s own acceptance of trial lawyer contributions.

Ian Herzog, president of the California Trial Lawyers Assn., said he and other board members had made some small contributions to Voter Revolt. He said his own might amount to about $200.

Rosenfield refused to divulge the exact amount of trial lawyer contributions, but he said the figure is under $50,000, or less than 1% of Voter Revolt’s total contributions in the last three years.

Asked how he would differentiate such trial lawyer contributions from the “bribery, extortion and corruption” characterization he had used to describe insurer contributions to Garamendi and Lungren, Rosenfield said:

“I’m not a decision maker. I’m not an elected official. And we don’t solicit contributions from these special interests.”

He noted that although he has accepted, if not solicited, funds from individual members of the board of the Trial Lawyers Assn., last May he returned a check for $5,000 that he had received directly from the association.

In a letter he agreed the trial lawyers could release to The Times, Rosenfield said he was returning the money because “we now expect to get involved in opposition to the insurance industry’s no-fault legislative campaign . . . and to accept the donation might fuel the insurance industry’s perennial effort to question our independence.”

As for suggestions that the money he has accepted from trial lawyers might taint his objectivity, Rosenfield said, “People should know they can trust me.”

In forming the public interest law firm, he said, he will start “by assembling a team of the best lawyers of this state and try to get them to work on a pro bono basis.”

There are many small abuses now that other lawyers don’t find it worth their while to go after, and “I want to find a way at relatively little cost to represent people in cases that no one else will take,” he said.

But, he added, he does not rule out taking fees out of the awards to defray the firm’s costs.