A Closed Door Opens for Consumers

Too often civil court settlements that may negatively affect consumers have been kept confidential. But despite some continuing opposition, this practice, fortunately, is changing.

New rules explicitly discouraging sealed settlement agreements took effect Jan. 1 in Los Angeles Superior Court. Similar rules were also adopted by the San Francisco, Santa Clara and San Diego superior courts. Four courts don’t sound like much, but together they account for almost half of state civil court filings.

Courts have acted on their own to protect the public interest because statewide legislative efforts have failed. A bill did pass in 1992 to limit agreements between tort litigants aimed at preventing public disclosure of evidence of product defects, environmental hazards or fraud. Defendants in such suits frequently require that evidence of defect dangers be sealed as a condition of settlement--plaintiffs must agree or forfeit compensation for their injuries. But Gov. Pete Wilson, concerned that it could hurt businesses, vetoed the bill that would have reformed this practice.

Trial court judges wisely understand that a policy of secrecy is often not in the public interest, especially when it precludes warning consumers about foreseeable dangers that can cause injuries. The L.A. court rules are reasonable, and contain procedural safeguards to prevent the inappropriate release of business secrets. These differing court rules are all good, but they underscore the continuing need for a uniform state standard.