The so-called "reform" bills would wipe
200 years of state laws on products liability off the books. They would
make it harder for injured consumers to hold wrongdoers accountable and
would cap punitive damages for the most egregious misconduct. The proposed
federal scheme on products liability is an assault on state sovereignty
and the very principle that fortifies our justice system and democracy --
accountability.
Products liability cases account for only 4 percent
of all tort cases in state courts, according to the National Center for
State Courts.
Non-asbestos products liability cases in federal
courts declined by 40 percent between 1985 and 1991, reports law professor
Marc Galanter of the University of Wisconsin.
The real increase in litigation these past few
years has been in businesses suing each other over contracts, not consumers
seeking redress through products liability. The Wall Street Journal
has reported that businesses suing each other comprised nearly half of
all federal cases filed between 1985 and 1991. These legal revisions would
not limit the rights of business and industry, but only those belonging
to individuals.
Products liability awards are closely related
to the severity of consumer injury, while punitive damages are rare and
thus have little impact on the majority of businesses, according to a U.S.
General Accounting Office (GAO) study.
The most comprehensive study ever of punitive
damages in products liability cases found only 355 punitive awards between
1965 and 1990. The study, by law professor Michael Rustad of Suffolk University
in Boston, found that in nearly 80 percent of those cases the manufacturer
took some subsequent safety measure in the wake of punitive damages.
A 1995 U.S. Department of Justice study analyzing
civil jury cases in the nation's 75 most populous counties found that juries
disposed of about 360 product liability cases during the 12-month study
period. Plaintiffs won 41 percent of these case. Of the 142 winning cases,
just three resulted in punitive damage awards. The total punitive damages
awarded in these three cases was $40,000.
Products liability insurance only costs American
consumers 26 cents out of a purchase of $100, according to a 1995 report
by the Consumer Federation of America. The study also found that products
liability premiums dropped 45 percent between 1987 and 1993.
The GAO has found that liability insurance costs
large businesses about six-tenths of 1 percent of annual gross receipts
and costs small businesses about 1 percent. The National Insurance Consumer
Organization found that liability insurance premiums in 1991 accounted
for only fourteen one-hundredths of 1 percent of product retail sales.
