MADISON, Wis. (Legal Newsline) – Small business leaders are welcoming the passage of a bill in Wisconsin that changes certain civil litigation rules likely to benefit contractors.

The bill, passed March 22 after some back-and-forth between the Senate and Assembly over a last-minute amendment, will now be sent to Gov. Scott Walker's desk for signing. Walker previously expressed his support for the bill in a tweet.

AB 773 was almost derailed over a late-added Senate amendment to remove one provision. It could have run out of time for passage in an emergency session. The bill also went through some changes during committee stages in the Assembly.

Bill Smith, executive director of Wisconsin branch of the National Federation of Independent Business, said that despite the changes, both at the Assembly committee level and last week, he is still happy with its provisions. 

The bill is designed to ease burdens for contractors who face legal action. Among the provisions is one that cut the number of years after construction that a lawsuit can be filed and others dealing with discovery and insurance.

"It is still a good bill, with a lot of positive provisions," Smith told Legal Newsline. "Independent businesses have welcomed its passage."

Smith said there was that late amendment on one provision that would have removed a need to electronically store information. That was taken out of the final bill, though other measures relating to easing discovery rules remain. The Assembly accepted the amendment and the bill passed on voice vote.

State Sen. Van Wanggaard introduced the amendment, arguing that the original bill would encourage parties to destroy information relevant to lawsuits. Supporters of the provision deny this, arguing that it is in line with practice in federal courts and that companies would still have to retain some electronic documents.

The bill's journey through the legislature has not been a smooth one, with most Democrats and some Republicans objecting to all or part. It faced the possibility of failing to pass last week as it shuffled between committee and the floors of the two legislative bodies. It finally passed Thursday after the voice vote in the Assembly. 

Smith said the amendments were added that led to some provisions being deleted because of a difference of opinion within the legal community. 

He added the plaintiff bar has concerns over the provisions curtailing discovery, adding that this is "a political process."

The original bill, according to documents filed with the legislature, included provisions on the discovery of information in court proceedings and procedural requirements relating to class actions.

It also included measures relating to consumer lawsuit lending; the statute of repose for certain civil actions; and others relating to audits and interest rates on overdue insurance claims.

The statute of repose measures remains from the original, though it has been tweaked slightly, down to seven years from 10. The statute of repose shields builders and others involved in construction projects from lawsuits alleging negligent design.

On the overdue insurance claims, the interest charged drops from the current 12 percent to 7.5 percent. The original version of the bill called for the interest rate to be set at prime rate plus 1 percentage point.

The amended bill would also repeal a provision of the new class-action rule adopted by the state Supreme Court in December. It would replace it with language requiring the Court of Appeals to hear appeals of orders granting or denying class-certification if the appeals were filed within 14 days of the orders, Legal Newsline previously reported

The granting of such an appeal would stay all discovery and other proceedings, although courts could still consider any settlements reached by the parties.

Under the amended bill, all references to regulating lawsuit lending are removed. 

A number of states, either through the legislature or judiciary, have ruled lawsuit lending is usury and therefor regulated under payday lending laws. Interest rates are therefore controlled, Legal Newsline previously reported.

While the amendment removed the electronically stored information provision, changes to discovery remain, including provisions that would limit discovery requests to five years before the start of a cause of action.

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National Federation of Independent Business Wisconsin State Senate

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