Secrecy in the Courts

April 30, 2007

Currently, there is an effort by pro-consumer interests in California to push for new legislation that would prohibit (or at least limit) “secret” or “confidential” settlements of certain types of legal cases. Those supporting such legislation believe that secrecy in the courts permits wrong-doers to quietly resolve meritorious cases, with no fear of negative publicity; and to continue undeterred in committing wrongful acts while placing profit over consumer rights and/or safety. The most highly publicized use of this tactic in recent years involved the attempted cover-up of the Ford Firestone tires situation. Several early cases involving this defect were settled then “sealed”—thereby delaying public awareness of this problem by several years–and several lives.

Opponents of the proposed legislation disingenuously argue that curbing “secret settlements” will produce an increase in “frivolous lawsuits.” In truth, however, they, of course, know that curbing secrecy in certain types of cases will reveal that the lawsuits were in fact meritorious; and that the public will react by requiring the wrongdoing defendants to change their behavior and act responsibly.

Insurance companies have long crusaded about the perceived “litigation explosion” and the associated problem of too many “frivolous” lawsuits. They want to publicize the “frivolous” lawsuits — to bolster their argument that pro-consumer legislation should not be passed into law. They do not, however, want you to know that the number of injury related lawsuit filings statewide in California are down — way down! (One recent study has indicated injury related filings are down 50% since 1990). And most importantly, they do not want you to know that the cases they are secretly settling with victims have merit.

The Law Offices of Aitken * Aitken * Cohn encounters confidentiality demands from settling Defendants and insurance carriers all too frequently. The best interests of our clients are often served by agreeing to confidentiality in exchange for an acceptable settlement amount in each individual case. However, the greater public good seemingly suffers each time we are forced to agree to resolve a case secretly, where publicity of the result might ultimately curb the future conduct of the wrongdoers. We will continue to keep you abreast of developments on this interesting and complicated issue. Please consider contacting your state representatives to voice your support of the proposed “anti-secrecy” legislation. (These are referred to as SB11 and AB36.)