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AICPA endorses Civil Justice Reform Act.


The American Institute of CPAs has endorsed the Civil Justice Reform Act of 1990, now before the Senate and House as bills S 2027 and HR 3898. The legislation would require each federal district court to develop a comprehensive plan for reducing costs and delays in bringing a case to trial. Each plan would include developing case tracking systems, setting early trial dates, limiting the time for discovery and developing alternative programs for dispute resolution.

Because accountants are often perceived as having "deep pockets," an increasing number of lawsuits is being brought against them, particularly when they are the only survivors after the failure of a client company.

The legislation has received bipartisan support. S 2027 was introduced by both the chairman and ranking minority member of the Senate Judiciary Committee, Senator Joseph Biden, Jr. (D-Del.), and Senator Strom Thurmond (R-S.C.). They were joined by Senator Howell Heflin (D-Ala.), chairman of the Courts Subcommittee.

The companion bill, HR 3898, was introduced by the chairman and ranking minority member of the House Judiciary Committee, Congressman Jack Brooks (D-Tex.) and Congressman Hamilton Fish (R-N.Y.). They were joined by Congressman Robert Kastenmeier (D-Wisc.) and Congressman Carlos Moorhead (R-Calif.), who are, respectively, the chairman and the ranking minority member of the Subcommittee on Courts, Intellectual Property and the Administration of Justice.

Abolishing joint and several liability. The AICPA also supports the Lawsuit Reform Act of 1989 (S 1100), introduced by Senator Mitch McConnell (R-Ky.). This bill would abolish joint and several liability in civil actions brought in federal and state courts and based on any cause of action, including economic loss. Under the joint and several liability standard, auditors have been required to pay for losses caused by actions of bankrupt codefendants.

An AICPA task force and other business, professional and public service groups worked with Senator McConnell's staff in developing S 1100.
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Publication:Journal of Accountancy
Date:Apr 1, 1990
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