The US Senate has passed the Class Action Fairness Act, which diverts large, multi-state class action lawsuits from state courts into federal courts.

That’s a relief to insurers, because US lawyers have been using the lack of uniformity in state laws to find generous state judges and juries known for awarding huge verdicts.

One jurisdiction – Madison County – reported a raft of such lawsuits filed in recent months as the legislation appeared likely to pass into law.

President George W Bush lobbied the Senate on this bill to reduce the number of frivolous lawsuits that clog courts and also damage the economy. Such lawsuits have driven the cost of America’s tort system to more than $US240 billion a year.