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Congress needs prod on product-liability reform.

Congress needs prod on product-liability reform

America continues to be the most litigious society in the world. Not only are consumers suing business and patients suing doctors, but parishioners are suing their clergy and children are even suing their parents. More than 16 million civil suits were filed in 1986, according to the Product Liability Coordinating Committee (PLCC), an umbrella group of several business associations pushing for passage of Senate bill 1400, the Product Liability Reform Act. That was up 23% in two years.

Product-liability lawsuits are growing faster than any other tort litigation. From 1974 to 1988, reports the PLCC, the number of suits grew at an annual rate of 983%. Some 20,000 companies were embroiled in federal suits.

Nobody is denying retribution to those injured due to faulty equipment. But too many cases are ludicrous. The PLCC points to the Biro Manufacturing Co, which was sued for a hand injury caused by a hamburger grinder it originally sold to the Air Force 27 years ago. In commercial use when the accident took place, the machine's guard had been removed. Another case involved the James Hunter Machine Co. It was sued several times for injury on a machine it didn't even build. Rather it was assembled into a make-shift machine by cannibalizing parts from old equipment. Hunter was sued because the frame bore a Hunter label and order number.

Most cases are either dismissed or won by the defendant company. The NMTBA - Association for Manufacturing Technology claims that in 1989, of 104 cases reported, only 12% reached the courtroom, and of those, 92% were won by its members. Even so, the cost is staggering. Mack Truck estimates that its engineers spend an average of 2100 hours a year researching or defending product-liability litigation. The NMTBA claims studies show that, for every $6 paid out to claimants by insurance companies for product liability, another $7 is paid for lawyers and other transaction costs. A 1984 Insurance Services Office study showed US industry spent more on lawyers to defend itself in product-liability cases than it spent to buy new machine tools to improve productivity. Last year, the median machine-tool company spent seven times more on product-liability costs than on basic R&D.

There are other incalculable costs - products that aren't developed or markets that are avoided because of their potential for product-liability problems. A Commerce Dept study concluded that US manufacturers of heavy machinery face liability costs up to 200 times greater than those of foreign competitors.

All that translates into further widening of the competitive edge that foreign producers enjoy in the US market. Our legislators are sitting on a solution. Senate bill 1400 has been wending its way through committees for two years. It's now ready for a floor vote. It's time congress came to grips with this lunacy that too often better serves the lawyers than the plaintiffs. The hesitancy may stem from the fact that there are few business people in congress relative to the number of lawyers - 61 senators and 189 representatives. It's time for industry to equalize the pressure points. Contact your senators today and let them know America needs product-liability reform.
COPYRIGHT 1990 Nelson Publishing
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Copyright 1990 Gale, Cengage Learning. All rights reserved.

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Author:Modic, Stanley J.
Publication:Tooling & Production
Article Type:editorial
Date:Nov 1, 1990
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