Monday, March 4, 2013

MHC urges legislature to preserve the Contributory Negligence liability standard in lawsuits

Here is what MHC told the House Judiciary Committee about HB 1182, which would establish a commission to study how fault should be allocated between plaintiffs and defendants in negligence cases. (MHC has also supported SB 819 and HB 1156, which would re-instate the Contributory Negligence standard, in the event the courts overturn it.)

Dear Chairman Vallario and members of the House Judiciary Committee:

I am the Vice President of the Maryland Horse Council (MHC).  MHC is comprised of over 30 equestrian organizations in the state of Maryland, representing every interest from racing to breeding to sport and pleasure horses, as well as equine related businesses, farms, charities and foundations, and individual enthusiasts - in other words, MHC is the voice of the over 65,000 members of Maryland’s equestrian community.

Equestrian activity contributes over 28,000 jobs and $1.6 billion in annual impact to the Maryland economy. In addition, Maryland’s equine operations are very important contributors to the preservation of our agricultural heritage and green space, occupying 587,000 acres in the state.

I write to support the passage of HB 1182, establishing a Commission to Study Maryland's Fault Allocation System, which is scheduled for a hearing before you this week.

A reasoned, workable system of fault allocation that takes into account the realities of small business operations is critical to the survival of these businesses. Generations of Maryland small business owners have relied on the Contributory Negligence standard to provide them with predictability and the assurance that they can conduct their operations without fear of being targeted by those who feel no responsibility for their own recklessness or disregard for safety rules, and see business and service providers as “deep pocket” insurers of their safety and well-being.  Among other things, the existence of this standard has enabled these small businesses to develop viable business plans, including essential commercial liability insurance coverage. Any change to the current system should not be undertaken without thorough consideration of all the possible impacts on all those affected.

Equine operators in Maryland already have some difficulty obtaining liability insurance at affordable rates, but it is generally acknowledged that it is largely the continued existence of the Contributory Negligence standard in Maryland that makes insurance accessible at all.  A change in the fault allocation standard could cause the incidence of lawsuits having little or no merit to skyrocket.  And according to our members, the mere filing of a lawsuit, regardless of merit, can result in the denial of insurance coverage, or renewal offers at prohibitively high rates.  Many equine operators would not be able to continue in business without adequate liability insurance coverage.

In addition, the continued applicability of the Contributory Negligence standard in Maryland has obviated the need for an Equine Limited Liability Law, which the legislatures of 44 states, most of whom apply other fault allocation systems, have found necessary to ensure the continued survival of equine operations in their jurisdictions in the face of the proliferation of meritless claims.

Given the important and widespread public policy impacts of the fault allocation system on the viability and day to day operations of members of our industry and others, MHC believes that the appropriate standard should be decided by the legislature, not the courts. HB1182 would establish a mechanism to allow a reasoned study of the issue.

We strongly urge you to support HB1182.  We stand ready to provide you with whatever additional information you may require.

Jane Seigler
Vice President
Maryland Horse Council

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