Tennessee is best known for its barbeque and country music, but the state is home to much more than that. To make sure that the state remains a friendly place for businesses to start and grow, the Tennessee Chamber of Commerce works to keep Elvis, not litigation, king.
The lawsuit climate of a state is a factor for businesses when making decisions about where to operate, and new state laws creating more lawsuits play into this climate. We interviewed the Tennessee Chamber of Commerce to find out more about their efforts to improve the state’s business climate and what legislation is on tap this year.
The Tennessee Chamber of Commerce represents the interests of thousands of businesses. What are some of the measures you take to improve the state’s litigation environment?
We are always engaged to ensure the state maintains a fair judicial system where costs for businesses are predictable and awards are fair for all parties. The Chamber has led a number of efforts to ensure this philosophy, including enacting comprehensive tort reform in 2011. We also work to ensure that some of the biggest litigation concerns for businesses do not become a reality. The Tennessee Chamber each year fights back efforts to change our system of an appointed Supreme Court and Attorney General. We also fight against legislation each year on a number of fronts that propose creating new causes of action against business.
A growing threat to the justice system is lawsuit lending, where lenders provide cash to plaintiffs to cover the costs of pursuing litigation. These loans often come with sky-high interest rates and fees. The lending industry says these aren’t traditional ‘loans’ since plaintiffs who lose their case don’t have to repay. Why is it important for the legislature to affirm that lawsuit loans be regulated like all other loans?
Tennessee was one of the first states in the nation to enact a comprehensive regulatory framework for lawsuit lenders. We believe this framework protects the integrity of our legal system for business and our citizens. Since the enactment of the Tennessee Litigation Financing Consumer Protection Act, lawsuit lenders, like all other lenders in our state now have regulations that they must comply with to operate in Tennessee, including interest rate caps and maximum yearly fees. We recommend that all other states who strive to ensure a strong judicial environment for both business and their citizens look at the act we passed here. Prior to enacting reforms, there is little doubt that a completely unregulated lawsuit lending industry hindered our business climate in raising litigation and settlement costs.
Since the 1980’s, suits related to asbestos exposure have been a huge driver of litigation. Federal trust funds formed from companies bankrupt by asbestos litigation have provided victims with compensation, but these trusts are plagued with fraud and abuse. Plaintiffs’ lawyers will file claims of asbestos exposure with several trusts in order to receive multiple payouts and file suits against companies for exposure in addition to making a fraudulent claim with a trust. How will the Tennessee Asbestos Bankruptcy Trust Claims Transparency Act prevent these “double dip” claims?
Governor Haslam signed the Tennessee Asbestos Bankruptcy Trust Claims Transparency Act into law on March 23rd. This legislation was included in the Tennessee Chamber’s annual agenda and we have worked diligently toward its passage. The new law will insure that all asbestos claims and trust funding requests are disclosed to jurors so an appropriate award can be determined. Overall the legislation will stop “double dipping” abuses and will ensure that claimants receive just compensation while the long-term financial solvency of asbestos exposure trusts is maintained for future victims.
Arbitration is an effective alternative to costly and time-consuming lawsuits which primarily benefit the lawyers. A bill before the Tennessee Legislature this year sought to prohibit the enforcement of arbitration agreements in contracts. What is the status of this bill and what are the potential consequences for Tennessee businesses?
The Tennessee Chamber was surprised to see legislation proposed here that would outright prohibit arbitration agreements between businesses and consumers. Undoubtedly, this legislation would have benefited trial lawyers and their efforts to file class action lawsuits against a vast number of Tennessee businesses.
Immediately we leapt to action and formed a broad coalition of business to coordinate and oppose the legislation. The legislation was removed from consideration without a hearing. With help from ILR experts, we were able to provide accurate research to our legislature that showed the devastating impacts the legislation would have on our business climate if enacted. Despite our victory, the business community must remain vigilant in opposing these types of proposals across the nation.