Are they the 'tough' or 'terrible' 200s?
by Erik Sanjurjo
As in every election year, there are a few contentious propositions this year. In a primary where the candidates for both parties have already been decided, these propositions receive even greater focus than they would were it a close race.
This year's equivalent to
1994's Prop. 187 are the 200s: 200, 201 and 202. They have been hailed in
advertisements as "the tough 200s" by supporters and slammed as "the
terrible 200s" by critics. According to the Los Angeles Times, $20
million has been spent on advertising for these three initiatives alone.
The 200s aim at curtailing
litigation in car accidents and class-action securities litigation, and
reducing the cut lawyers get from legal settlements. Like all new pieces of
legislation, the 200s need to be looked at closely and the highly complex
text needs to be read in order to decide how we'll vote on them.
Unfortunately, most voters decide how they're going to vote based on the
barrage of 30-second ads that run on television and radio the weeks leading
up to the vote. The ballot pamphlet put together by the state and sent to
registered voters, who number only one-half of the eligible voters this
year, is extremely informative on the issues without getting complex and at
the same time is fair in its treatment of the positions of both sides. Prop. 200 is for "No-Fault
Motor Vehicle Insurance." Governor Pete Wilson and the California Chamber
of Commerce both support the measure. It would set up a system in which
insurance companies were forced to pay benefits regardless of who was at
fault in a motor vehicle accident. Each driver would have to take out
$50,000 and up to $1,000,000 in vehicular-owner insurance for personal
injury protection. Lawsuits would be
prohibited except in the case of drunk driving. This means that regardless
of who was at fault, you pay for your own injuries. Currently, the
proponents claim, injury claims are filed in 67 percent of car accidents.
The national average is just 29 percent. We are sue happy in this state,
they say. Lawyers pocket $2.5 billion out of what we pay in auto premiums
in California, they state. Systems similar to 200
exist in Canada, as well as Michigan. The critics of Prop. 200 claim that
similar measures have passed and been repealed in Connecticut, Georgia,
Nevada and the District of Columbia. One prominent benefits of
the proposed law would be universal auto insurance coverage. Since only
insured drivers could be registered by the DMV, there would be fewer
uninsured drivers, who under the current system pay nothing if that they
cause an accident. These drivers, along with hit and run drivers, cause up
to half of California's car accidents.Insurance companies would
have to pay from their own pockets to cover payments to pedestrians and
children of uninsured drivers. There would also be a time
deadline for payments of claims. If the company does not pay up in 30 days
an interest charge of 24 percent would be added onto the payment. Finally, if you were not at
fault in an accident, your insurance would be prohibited by law from going
up. In the current system, your insurance goes up no matter what. You are
penalized for having bad luck.The adversaries of Prop.
200, which include consumer advocate and presidential candidate Ralph
Nader, lawyers and various consumer groups, portray the measure as a
lose-lose situation for consumers. Under a no-fault system, they argue,
good drivers pay for bad ones. It also eliminates the driver's right to sue
in the event of the death of their child, they say. The second proposition,
201, seeks to stop lawsuits against corporations in shareholder actions and
in class actions based on securities law violations. This would happen
because the losing party would be forced to pay the wining party's attorney
fees. In some cases, where both sides had justified reasons, the loser
would not have to pay. According to current law,
stockholders may sue a company when they believe there has been misconduct
by company officials which violates laws protecting stockholders. The
backers of Prop. 201, mostly businessmen--especially in the technology
industry where lawsuits are rampant--wish to end the majority of these
energy consuming lawsuits.One sectionin the
proposition would virtually do away with suits by small investors.
Plaintiffs must post a bond to ensure the payment of the defendant should
they lose their case. Only the rich could afford to take such a large risk.
Small investors with legitimate claims would be unlikely to risk such a
large amount of money unless they were part of a class action, where the
fees could be split.Opponents, whoinclude the
Congress of California Seniors, the state branch of the AFL-CIO, Nader, the
Consumer's Union and attorneys, argue that the proposal would strip
investors of their only defense against fraudulent claims by companies.
Big investors and
corporations would be the only beneficiaries from Prop. 201, they say. They
list five companies convicted of fraud who have contributed money to the
proposition. All in all, $11 million has been paid to the campaign by
corporations.The third proposition, 202,
seeks to limit the attorney cut of settlements to 15 percent in personal
injury, wrongful death and property loss cases. This would only apply to
cases in which the defendant made a prompt offer to settle the claim. Proponents of Prop. 202,
which include Wilson, various law professors and the Chamber of Commerce,
say that California lawyers pocketed $16.3 billion in fees in 1992. They
say less phony lawsuits would be filed under the proposed system. Faster
settlements would also result, they claim. Those against Prop. 202,
the same who oppose 201, say contingent fee attorneys are usually the ones
fighting against fraud and corruption. Unlike other lawyers, they only get
paid if they win. Lawyers who get paid up front would not be effected by
the proposal, they say. The financial ramifications
of all three propositions are unknown. All could potentially cost and save
taxpayers money. Polls show Prop. 200 trailing and Prop. 202 ahead by a
margin of 45 to 35 percent. I would tell you my
preferences, but that would defeat the whole purpose of voting, wouldn't
it? Read the information printed in the ballot pamphlet, which is extensive
but simple to understand and decide for yourself. Erik Sanjurjo is a junior majoring in international relations and print journalism. If you care to hear his opinion of the 200s, e-mail him at
sanjurjo@usc.edu.
