America's business community has suffered from a growing number of product liability lawsuits - and a move in Congress to put some sensible curbs on this kind of activity is long overdue.
The threat of lawsuits not only hurts individual companies and their profits, but it affects the entire economy by causing firms to avoid the marketing of new products. The possibility of being sued over a new product is greater than with older, established items.The problem of lawsuits is three-fold. First, the number of such suits has risen sharply in recent years. When anything goes wrong, too many people look for somebody to sue. Second, the size of awards keeps growing, and multi-million dollar awards, all out of proportion to realistic compensation, are increasing in number. Third, the courts themselves keep expanding the grounds for lawsuits.
For example, there is a tendency to blame everything on the product, even if it is improperly used or warning labels are ignored. Frequently, no effort is even made to prove negligence or that a product was defective, only that someone has been hurt.
The measure approved recently by the House Energy and Commerce Committee would plug some of those product liability holes without taking away a consumer's right to sue.
Essentially, the bill would impose uniform federal standards, limiting victims to six grounds for lawsuits. Those grounds are negligence, intentional wrongdoing, defective design, defective construction, inadequate warnings, and breach of written warranty.
These seem to provide enough scope to protect users, yet bring some order to a wild mixture of state liability laws.
One proposed change would provide that manufacturers could not be found liable if they did not, or could not, know of the defect, or if there were no alternative, safer design. In other words, they could not be sued if there is nothing they could have done to make a product safer.
All of this means that manufacturers could only be held liable for their own wrongful actions and not simply turned into a no-fault insurer of last resort - someone who has to pay because someone was hurt.
The bill does not cover several other problems of product liability. It sets no caps on damage awards; doesn't change the joint-and-several rules that make every party in a case liable for 100 percent of the damages, even if only 1 percent at fault; and makes no provisions regarding attorney fees.
Despite these shortcomings, the bill is a step in the right direction and should be approved by the full House and the Senate.