Wednesday, February 26, 2003
Copyright © Las Vegas Review-Journal

Task force urges lawsuit reform

Panel targets construction liability rates

CARSON CITY -- A divided task force is recommending lawsuit reform and other changes to lower construction liability insurance rates, Nevada Insurance Commissioner Alice Molasky-Arman told lawmakers Tuesday.

The task force's final report asks lawmakers to allow Nevada contractors to fix construction defects before homeowners sue them.

It also recommends that joint liability -- in which builders can be held liable for the work of subcontractors -- be eliminated.

But Molasky-Arman told a joint Assembly-Senate money subcommittee that the task force was deeply split and asked for further review.

"Our awareness of the marketplace on construction liability is very, very limited," she said. The task force included builders, insurers, developers and trial lawyers.

Molasky-Arman said insurers outside the state have suggested that Nevada implement an alternative dispute resolution process. She directed her staff to research the plan.

Sen. Mike Schneider, D-Las Vegas, plans to introduce a bill tackling the issue. He wants to create a state panel to resolve conflicts between homeowners and builders before a lawsuit is filed, and allow testing of construction defects only when a builder is present.

"People just want their homes fixed," Schneider said, adding that a handful of lawyers are filing numerous expensive construction defect claims.

"It's a scam," he said. "It's just like drug money. It's way too much and way too easy."

Molasky-Arman formed a task force an information clearinghouse after being told that building defect litigation has dried up a pool of insurers.