Don't make it harder to sue

June 24, 1994|By Robert Kuttner

ONE of the epic corporate public relations ploys of our time is now pending before the U.S. Senate. And it could well succeed.

This is the crusade by organized business to make it harder for citizens to win damages when they are maimed by dangerous products or bynegligent doctors.

This crusade calls itself "product liability reform" or "tort reform." Under the common law, a tort is a wrongful act that allows a plaintiff to sue for damages.

For more than a decade, America's biggest businesses have painted a lurid picture of an overlawyered, overlitigated economy. Supposedly, an explosion of lawsuits has rendered American industry less competitive, lined the pockets of trial lawyers and inflated health costs.

Since the early 1980s the business lobbies have been promoting legislation -- this year's version is called the "Product Liability Fairness Act" -- to make it harder for people to collect damages.

But this supposed crisis in product-liability cases is based on several trumped-up claims.

According to promoters of "reform," product liability cases cost American business $100 billion a year. The actual figure, according to the National Association of Insurance Commissioners, is about $4 billion. That includes all insurance premiums paid by business to cover possible damages, all actual damages collected by injured consumers and all legal fees.

To put that figure in perspective, $4 billion is less than what Americans spend annually on dog food. It is one-fifth of 1 percent of retail sales. It is less than corporations spend suing each other for commercial infringements. As for medical malpractice, damage awards account for half of 1 percent of U.S. health outlays.

Supposedly, runaway juries are increasingly siding with consumers. In fact, according to a new authoritative study by Jury Verdict Research of Horsham, Pa., the proportion of personal injury cases won by plaintiffs dropped from 63 percent in 1989 to 52 percent in 1992. The average damage award has hardly changed.

Supposedly too, such cases are clogging the courts. In reality, according to the Conference of Chief Justices (of state courts), product liability suits are just three-tenths of 1 percent of all civil cases.

Former Vice President Dan Quayle is a highly visible spokesman for this crusade. In his speech to the 1992 Republican National Convention, he railed against trial lawyers, darkly insinuating that liberals and Democrats supported consumer protection laws because they were bankrolled by trial lawyers.

In an overheated speech to the American Bar Association, Mr. Quayle asked rhetorically whether America really needed "70 percent of the world's lawyers." No, Dan, we don't, but in fact the U.S. has 9 percent of the world's lawyers.

A handful of lawyers do reap large windfalls from a small number of spectacular damage awards. We might want to limit the percentage that lawyers can take as fees. But to achieve that reform, it's not necessary to undermine the citizen's right to collect damages.

Proponents also argue that it's neither necessary nor fair to expose industry to expensive litigation, since citizens are already protected by regulation. Don't the Food and Drug Administration and the Consumer Product Safety Commission provide adequate seals of approval?

Consumer regulation doubtless prevents a lot of injuries and deaths. But regulatory agencies are not clairvoyant. And the limitations on their budgets and powers are often the result of lobbying by the same industries that oppose consumer litigation.

Some of the most infamous injuries inflicted on consumers were exposed and remedied mainly through lawsuits, not regulatory action. These included the Dalkon Shield, a contraceptive which rendered thousands of women infertile; the Pinto's exploding gas tank; the high absorbency tampons linked to toxic-shock syndrome; the damage to workers exposed to asbestos and innumerable lesser-known cases. The crusade to limit corporate liability is especially ill-timed, given what we are belatedly learning about the tobacco companies.

The Senate is closely divided on this bill. A vote could come as early as next Tuesday. It's all too understandable why large businesses would want to evade responsibility for the injuries they inflict. It's harder to understand why a majority of the Senate would go along.

Robert Kuttner writes a column on economic matters.


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