The Private Securities Litigation Reform Act of 1995 and the U.S. Supreme Court's decision in Central Bank of Denver v. First Interstate Bank of Denver represent major victories in the profession's deliberate stance against unmerited legal liability for public accounting firms. The Act imposes only proportionate liability on peripheral defendants and, although debatable, the Court's decision reduces the securities liability of aiders or abettors. However, one major effort has been less successful: tort reform. In legislation introduced at the state level, a number of stakeholders, including some state societies of CPAs, have introduced tort reform legislation. For example, Arizona Senate Bill 1383 attempted to conform Arizona securities laws to federal laws, and California Bill 1862 attempted to limit punitive awards to no more than three times compensatory damages.

Other industries have sought tort reform as well, including liability limits in the automobile industry and contingency fee limits in the legal profession.

Required: Identify tort reform legislation in the accounting profession or other industries for your state or others. Sources include a state representative or senator, and an article that briefly identifies state initiatives: "Accountants Resume Tort Reform Quest at State Level," Public Accounting Report (February 29, 1996), pp. 2, 7. Draft a report that:

1. Identifies the stakeholders supporting and opposing the legislation, and discusses each stakeholder's interests.

2. Describes the major provisions of the legislation.

3. Lists the status of the legislation.