Under the guise of job creation, Wisconsin Governor Scott Walker is promoting some legislation that will, without a doubt, hurt consumers. The evidence that the bills will actually result in job creation is completely lacking.
One of the bills in question affects the amount of interest that plaintiffs receive on payments owed to them after a favorable judgment. For decades, those ordered to pay a court judgment have had to pay 12% in annual interest if they don’t pay up right away. That was the case regardless of whether the plaintiff was an individual or a bank, landlord or credit card company. This strongly encourages defendants to timely pay claims instead of delay.
But the proposed legislation seeks to create a difference between these two groups of plaintiffs. Under the proposed bill, individual plaintiffs who bring a personal injury case or sue under the state’s consumer credit law would only receive the prime interest rate plus 1%. Currently, that would amount to only 4.25% interest. Meanwhile, banks, landlords and credit card companies would continue earning 12% on judgments in their favor.
Proponents of the bill, including its author, Sen. Rich Zipperer (R-City of Pewaukee), claim that the changes would promote job growth and provide more stability to business. While there can be no dispute that the bill will further tip the scales of justice in favor of corporations, there has been no attempt to explain how this is going to create jobs for Wisconsin taxpayers.
In another attempt to limit consumer protections, Zipperer has also proposed a bill that would provide drug-makers and medical device manufacturers immunity from lawsuits if their products were approved by the FDA. There are many examples of drugs and medical products that have been approved by the FDA (which does no independent testing of its own) which were subsequently determined to be defective and unreasonably dangerous. This legislation would eliminate the ability of people injured by these products to seek compensation in the courts. Again, supporters of the bill do not explain how exactly the bill would create jobs here in Wisconsin.
A final bill seeks to establish a cap on attorney fees paid by an opponent to three times the amount of the compensatory award. The stated goal of this bill is to encourage settlements, but the proposed limitation will stop attorneys from taking certain types of cases entirely, such as those in which there are small economic damages. For example, an attorney that proves a consumer fraud case resulting in a $1,000 loss to a plaintiff can, under current law, receive reasonable attorneys fees from the defendant if he wins his case. Attorneys fees can easily exceed the value of the economic damages in such cases. An attorney would not be able to get paid more than $3,000 in this example, regardless of the amount of stonewalling from the defendant and work necessary to prove the case. The rule would nullify the consumer protection laws in such instances because no attorney is going to be able to economically justify pursuing claims like this and consumers will not pay an attorney more than they are likely to recover in the case, if they can afford an attorney at all. While this bill will certainly enable businesses in Wisconsin to get away with fraud in some cases, there has been no demonstration it will spur job growth in any way.
Taken together, these three pieces of proposed legislation constitute an assault on consumer rights in the state of Wisconsin. If passed, the right of individuals to fairly access the civil justice system and seek recovery for damage done to them will be severely hindered and in some cases eliminated altogether, and all under the pretense of job creation. These bills take away the rights of Wisconsin citizens and offer them nothing in return.