On March 6, 2008, the Senate Judiciary Committee approved the Sunshine in Litigation Act of 2007 (the “Act”).  The Act (S. 2449) would amend the federal judicial code and prohibit courts from restricting disclosure of information obtained in discovery, approving settlements restricting the disclosure of such information, or issuing protective orders and sealing court records unless:

    (A) such order would not restrict the disclosure of information that is relevant to the protection of public health or safety; or

    (B)(i) the public interest in the disclosure of potential health or safety hazards is outweighed by a specific and substantial interest in maintaining the confidentiality of the information; and (ii) the requested protective order is no broader than necessary to protect the privacy interest asserted.

The Act also prohibits a party from requesting, as a condition for the production of discovery, another party stipulate to an order that would violate the restrictions under the Act.

Proponents of the Act claim that plaintiffs in product liability cases against large corporations often settle in exchange for not revealing information disclosed during the litigation, and believe that by making such information public, it could potentially save lives or prevent injuries.

The Act now heads to the Senate floor for a full hearing and vote.  If passed by Congress and signed into law, the Act will take effect 30 days after enactment and apply only to orders entered in civil actions or agreements entered into on or after such date.

InsureReinsure.com will continue to monitor this and other related developments.