House Approves Restrictions On Personal Injury Lawsuits Limitations On Damages Part Of Gop’s ‘Contract With America”

Easily overcoming opposition by trial lawyers and consumer groups, the House on Friday approved a landmark legal reform bill that sets the first national rules for personal injury cases and promises to give businesses significant relief from costly litigation.

By a 265-161 vote, the House endorsed the third and final element of the package of legal reforms contained in the GOP’s “Contract With America” legislative agenda. The measure now goes to the Senate, where many - but not all - of its provisions are likely to gain passage.

The personal injury measure is the most sweeping bill in the package, and House Speaker Newt Gingrich had predicted it would encounter the fiercest opposition of any measure the Republicans intend to debate during the first 100 days of the current session.

If enacted, the bill would limit all punitive damage awards to $250,000, or three times a victim’s monetary losses, whichever is greater. Plaintiffs who are injured by a doctor’s negligence or by an unsafe drug or medical device would be allowed to recover no more than $250,000 for their pain and suffering.

Advocates say the limits are needed to address an escalating caseload of personal injury suits that are clogging the nation’s civil courts and, in some cases, forcing businesses and professionals to pay damages that are far in excess of the tangible losses incurred by plaintiffs.

President Clinton has not yet said whether he would veto the bill in its current form. But the his legal advisers characterized it as an “unfair” initiative that “tilts the legal playing field dramatically to the disadvantage of consumers and middle-class citizens.”

Consumer advocates and trial lawyers contend that ordinary Americans will be adversely affected by the legislation if they are gravely injured by a product but find themselves unable to win adequate compensation in court.

Friday’s vote culminates a decade-long drive by business advocates to rein in the excesses of the U.S. civil litigation system. From manufacturers to retailers, from accountants to insurers, similar horror stories are repeated time and again. Reform advocates say a flood of lawsuits - and the threat of huge damage verdicts - has driven up their costs and changed the way they do business.

New products, from contraceptives to heart valves, have been kept off the market because of potentially bankrupting damage verdicts, the bill’s supporters say, while some older products, such as small airplanes, are no longer even produced in the United States because of high litigation costs.

In the wake of the bill’s passage, consumer advocates say they intend to focus their attack on the medical malpractice provision.

“Suppose you have a child who has been braindamaged or disfigured for life because of an unsafe drug. For that child and her parents, $250,000 for pain and suffering doesn’t go a long way,” said Mary Griffin, insurance counsel for the Consumers Union.

The House bill’s key provisions include the following:

The size of punitive damage awards would be strictly limited. In most nonmedical cases, injured persons would still be allowed to gain the full amount needed to cover their actual losses, such as medical costs and missed wages, and the more subjective “noneconomic” damages, such as an amount for pain and suffering or emotional distress.

Punitive damages give jurors to power to punish wrongdoing.

Makers of drugs and medical devices would be shielded entirely from punitive damages if their products were tested and approved by the Food and Drug Administration. Proponents say this change will encourage the development of new and better health care products. Critics said it could encourage the marketing of dangerous drugs.

Doctors, hospitals and other health care providers would have to pay injured persons no more than $250,000 for their pain and suffering.

Retailers and distributors would be shielded from most damage suits involving products unless they negligently handled the item.

Manufacturers could not be sued if a product malfunctions after it has been in use for more than 15 years. This is an important change for makers of everything from airplanes to elevators.

Settlements of lawsuits would be encouraged by requiring “losers” to pay the legal costs of the winners if they had turned down an earlier and better offer before the trial.

Companies or persons would have to pay only their share of the liability.

Companies could not be sued for a drop in their stock prices unless investors could show that officials knowingly deceived them about the company’s condition or its prospects.