This story was originally published by CalMatters. Sign up for their newsletters.
Gov. Gavin Newsom on Thursday signed a bill that came out of a deal between Uber and California lawyers, shaving two competing initiatives that likely would have driven hundreds of millions of dollars in political spending from the November ballot.
The new law will allow Uber to reduce its liability in crashes while subjecting the company to new rules regarding background checks for its drivers.
Uber and the Consumer Attorneys of California had qualified competing measures for the ballot but struck an agreement that lets them avoid an expensive fight — each side had either raised or allocated more than $75 million for their campaigns — over liability around ride-hailing. Uber wanted to limit attorney contingency fees in medical recoveries for all California crashes; the attorney group wanted to increase Uber’s liability for sexual misconduct.
The compromise, Senate Bill 623, notably applies to crashes involving ride-hailing services only — not all crashes on the state’s roads as Uber’s measure had proposed. It won’t cap attorney fees but will limit how much plaintiffs can recover for medical costs for treatment from lien-based providers. Medical liens let crash victims start treatment without paying upfront while their case is pending; the law would also prohibit the sale of such liens. In addition, lawyers will be prohibited from referring clients to medical providers with whom they have close ties.
The deal will require annual criminal background checks for drivers, and expands the types of criminal offenses that precludes them from driving for a company such as Uber.
Uber’s ads had painted its campaign as a battle against unscrupulous lawyers who push crash victims into unnecessary medical treatments. Lawyers had said Uber’s measure would have limited crash victims’ access to lawyers and possible medical care.
Attorneys agreed to the deal because they were willing to “accept and advocate for responsibility,” Doug Saeltzer, president of the Consumer Attorneys of California, told CalMatters. “Hopefully we provided a roadmap to the federal government and other states on how to stand up to corporations who don’t want to take responsibility.”
Uber, which is trying to reduce its liability in several ways, effectively lowers the costs it will incur from medical bills of people hurt in ride-hailing crashes.
“This legislation puts meaningful guardrails in place to better protect accident victims, increase transparency and accountability in the medical lien system and strengthen safety,” said Ramona Prieto, Uber’s head of public policy for the western United States, in an emailed statement.
