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LIABILITY LAWS STILL NEED REFORM

By failing to cut off a filibuster, a Senate vote Thursday in effect killed legislation seeking to reform America's tangle of product liability laws. The failure is a major disappointment and means that the liability problem will continue to be a serious drag on the U.S. economy.

American industry has complained for years that the growing practice of filing a lawsuit every time somebody gets hurt while using a product has driven up prices, discouraged new products, cost jobs and made it harder for the United States to compete in world markets.The Senate bill sought to limit jury awards, limit punitive damages to cases of clear and convincing evidence of a flagrant indifference to safety, prohibit punitive damages where a product has been approved by the Food and Drug Administration and other federal regulators, restructure the contingency fee system, encourage arbitration instead of lawsuits, and offer incentives to out-of-court settlements.

The proposed legislation also would have sharply restricted the "several liability" principle, which allows a plaintiff to collect all of the damages in a jury award from a single company - the one with the most money - even though that company may have been among a number of defendants and had only a minor association with the product.

The proposed reforms would have taken preference over a patchwork of wildly divergent state laws.

People who get hurt through their own carelessness, failure to follow instructions and even behavior that flies in the face of minimal common sense are able to file lawsuits - and win awards - from manufacturers. On occasion, the product user has been found to be 99 percent at fault, yet the manufacturer has gotten stuck with huge damages.

Consumer groups and trial lawyers oppose the proposed changes, saying that multimillion-dollar cases make manufacturers more careful and protect the public. That's doubtful in most instances. What it more likely does is raise costs and keep new products off the market.

A survey of company executives found that threats of lawsuits caused nearly half of the companies to drop one or more product lines. One in every three withheld new products from the market for the same reason.

Nobody opposes reasonable compensation for injury or loss suffered because of faulty products. But the financial awards, often multiplied by punitive damages, frequently defy all sense of justice or equity.

While further action this election year is unrealistic, Congress should not let the matter die. There still appears to be significant support for bringing product liability law under control and for replacing the current shambles with an approach that promotes safety, fairness and uniformity.