A federal law governing injured railroad employees cost American railroads $600 million in one year, yet does not benefit workers fairly and should be changed or dropped, says Union Pacific Railroad Chairman Michael H. Walsh.

Walsh said the law is archaic and causes suffering both for injured workers and railroads."Only the lawyers are sure winners under the . . . system," said Walsh, who labeled the law "fundamentally wrong."

He said the Federal Employees Liability Act of 1908 requires railroad workers injured on the job to sue their employers and show negligence to receive any compensation.

"Unlike the rest of American workers, our people are not covered by no-fault state workers' compensation," Walsh said.

He said the $600 million cost of the liability act in 1986 was equal to 80 percent of the $747 million in total profits by the nation's railroads in 1986.

Railroads are not having too many accidents, he said. Between 1981 and 1986, the number of employees injured dropped by 53 percent, partly because rail employment declined by 35 percent.

As a result, federal liability claims per 100 employees dropped by 21 percent during that time, he said.

"Yet the number of FELA cases resolved through lawsuits more than doubled, and the payout under FELA went from $400 million to $600 million," Walsh said.

The law is still on the books because it is a source of revenue for lawyers, said Walsh, a law school graduate.

Walsh said an employee who loses a leg in a railroad accident "is thrown into a virtual lottery system. In one court, he may receive millions . . . in another, nothing."

By requiring blame in accidents, FELA encourages each side to accuse the other rather than helping the injured worker and preventing similar accidents, Walsh said.