Positive, negative changes made to state’s business liability law

(March 31, 2006) Conflicting actions in the realm of business law and liability gained the approval of the legislature’s Judiciary Committee at its deadline this week.

On the positive side, the committee adopted certain clarifying and beneficial changes to the directors and officers liability provisions of Connecticut’s corporate statutes.

But committee members also wiped away certain reforms, for actions accruing before Oct. 1, 2005, approved last year regarding Connecticut’s offers of compromise and offers of judgment statutes.

CBIA supports SB-547, which as modified will clarify various directors and officers liability provisions as well as create a new statute related to directors’ involvement in business opportunities of their corporation.

The bill’s new business-opportunities provision will be especially helpful for small businesses that may not have individual conflict of interest policies in place.
The measure awaits action by the Senate.

Unfortunately, while the committee made strides in the liability area, it then undercut some of the tort reforms achieved last year under the 2005 medical malpractice legislation.

Specifically, SB-593 makes Public Act 05-275, concerning offers of compromise and offers of judgment, inapplicable to claims that accrued before Oct. 1, 2005. This undermines the tort reforms passed last year.

CBIA will work with the committee chairs to address these issues and restore the tort reforms achieved in 2005.

For more information, contact CBIA’s Eric George at 860-244-1900 or georgee@cbia.com.