The 2016 legislative session brought positive changes to general corporate and liability law.

A bill that updates the state's limited liability company act consistent with the Uniform Limited Liability Act passed, as did a measure specifying the conditions under which fiduciaries have the right to access digital assets.

HB 5259: Connecticut Uniform Limited Liability Act

Passed by both the Senate and the House, HB 5259 now awaits the Governor's signature.

The bill makes Connecticut's limited liability company statute—unchanged since 1993consistent with the federal Uniform Limited Liability Act.

The ULLCA is more modern, comprehensive, and well written than Connecticut's LLC act and represents a significant advancement in this area of law.

Adoption of the ULLCA streamlines administration, reducing costs and providing decisive and predictable consistency across jurisdictions.

In addition, HB 5259 clarifies the rights and obligations of the members of LLCs while adopting a more user-friendly format and language that is accessible to entrepreneurs.

The bill provides a centralized operating agreement provision and establishes clear default rules for internal governance.
The new act operates as a set of default rules for LLCs formed without the aid of counsel, and without a written operating agreement.

Adoption of the bill allows courts to benefit from the experience of courts in other uniform jurisdictions.

The bill provides a centralized operating agreement provision, establishes clear default rules for the internal governance of a LLC, and changes the way in which a member or manager can bind a LLC based on his or her actions.

HB 5606: Revised Uniform Fiduciary Access to Digital Assets Act

HB 5606 extends a fiduciary's existing authority over a represented person's tangible assets to include the person's digital assets.

The bill, which passed both chambers and awaits the Governor's signature, specifies the conditions under which fiduciaries have the right to access electronic records and strikes the appropriate balance between protection of privacy and access.

Several measures with a negative impact on the business community failed.

HB 5561: AAC Fairness in Consumer Contracts

This bill included several provisions that profoundly changing certain business contracts, including allowing consumers to reform and alter contracts they've legally entered into with businesses and redefining the meaning and scope of "unconscionability" to make contract interpretations subjective.

HB 5561 defined substantively unconscionable if a consumer contract included a requirement that resolution of legal claims take place in an "inconvenient venue"—defined as a place other than the judicial district where the consumer resides or where the transaction occurred.

The bill also interfered with and arguably nullified the arbitration process by stating a contract is unconscionable if it waived a consumer's right to assert claims or seek remedies provided by state or federal law.

HB 5561 would have a chilling effect on the ability of businesses to continue offering products or services in Connecticut.
By nullifying arbitration clauses in consumer contracts, HB 5561 contradicted federal law and recent United States Supreme Court decisions.

The bill, which died in the House, also included provisions that would have opened businesses to untold penalties by making it a violation of the Connecticut Unfair Trade Practices Act.

If passed, the bill would have a chilling effect on the ability and desire of businesses to continue offering products or services in Connecticut.

SB 247: AAC Loss of Parental Consortium

This bill, which died in the House, greatly increased the damages that could be awarded in wrongful death actions.

Liability insurance premiums in Connecticut, especially for medical professionals, are already among the highest in the country and higher damage payouts will increase insurance premiums in the state.

SB 247 was a response to the decision in the Connecticut Supreme Court case of Campos v. Coleman.

Last year, in a controversial 4-3 decision, the high court overturned decades of precedent and greatly expanded the damages available to plaintiffs by recognizing a new cause of action for loss of parental consortium.

Loss of consortium is a form of third-party liability in which a tortfeasor is held responsible for indirect emotional harms suffered by a person with a close relationship to an injured or deceased party.

Although the Supreme Court overturned precedent, it did include several important restrictions that were not included in SB 247.


For more information, contact CBIA’s Louise DiCocco (203.589.6515) | @LouiseDiCocco