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“I was ruined but
twice in my life,” a French philosopher wrote, “once when I lost
a lawsuit and once when I won one.”
That’s truer now more
than ever, especially for people trying to do business in
California. Litigation is one of your biggest competitors.
It’s a cost you’ve got to fight all the time.
A state Supreme Court
ruling recently took away one of your weapons in that fight. It
ruled that California law prevents two people or companies from
agreeing by contract to settle future legal disputes before a
judge instead of a jury.
How does this hurt
you? It takes away an option that lets parties to a lawsuit
have a complicated business matter decided by a judge instead of
by an untrained jury. It means longer trials, more time in
court, and higher attorney fees.
The constitutional
right to a jury trial deserves solid protection, however people
should have the right to make an informed agreement to opt for a
judge-only trial.
Until our court’s
ruling, Georgia was the only state prohibiting a so-called “jury
waiver.” Jury waivers are available in federal law.
Our Supreme Court did
not rule that jury waivers are unconstitutional. It said they
must be expressly permitted by a state statute – which the law
does not do. One justice even urged the Legislature to pass a
law and put California back on track.
The Civil Justice
Association of California is working now with the Legislature to
make that happen.
Our quick survey of
companies and business associations found that regardless of
whether they use jury waivers in contracts, they believe it is
an option that should be available. Mediation and arbitration
are other tools companies and individuals can use to bring legal
disputes to a faster, less-costly conclusion. All these tools
save court time and taxpayer money.
You won’t be
surprised to know that the same plaintiffs’ lawyers that have
been attacking arbitration for years argued for an end to jury
waivers. Big, expensive trials usually mean more money for
these lawyers. With a “portfolio” of cases, a plaintiffs’
lawyer can afford to wait out the courtroom process until his
opponent is willing to pay more to settle the case or – better
yet – a runaway jury gives him a bigger pot from which to carve
out his contingency fee.
These lawyers were
not altogether happy with the Supreme Court’s decision. It
included a not-too-subtle endorsement of arbitration’s
legitimacy.
It also provided a
road map for the Legislature to reinstate jury waivers.
We can only hope the
Legislature quickly follows this road map and steers around the
barricades the plaintiffs’ lawyers are bound to erect.
John H. Sullivan
President
Civil Justice
Association of California
Co-Chair
Californians to Stop
Shakedown Lawsuits - Yes on Proposition 64
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