Pain, Suffering Cap on Product Liability Gains

WASHINGTON â€”  A Senate committee, tackling the nation’s skyrocketing product liability costs, on Thursday narrowly approved legislation that would place a highly controversial cap of $250,000 on damages for pain and suffering caused by defective products.

The federal measure, which would preempt state and local jurisdiction and affect such lawsuits nationwide, includes a provision--similar to the “deep pockets� Proposition 51 initiative recently approved by California voters--that would limit recovery on non-economic losses for pain and suffering. It would not apply to economic losses and punitive damages.

“This bill will lower insurance costs, legal costs and ultimately product costs for American consumers,� said Sen. Bob Kasten (R-Wis.), the bill’s sponsor.

The vote was 10 to 7 in the Senate Commerce, Science and Transportation Committee. The bill is expected to be referred to the Judiciary Committee before it goes to the Senate floor.

The House has taken no action on pending parallel legislation. And, with about 40 days left in this congressional session, it is becoming increasingly unlikely that final passage of product liability legislation will occur this year.

Trial Lawyers Critical

“At the very least, I think we’ve got a very good head of steam for early next year,� said Sen. John C. Danforth (R-Mo.), chairman of the Senate Commerce Committee.

The committee action was applauded by business organizations and the insurance industry but sharply criticized by trial lawyers and consumer groups who said it unfairly penalizes those most severely injured.

“We think it’s a very constructive step forward,� said Dirk van Dongen, spokesman for the Product Liability Alliance, a coalition of more than 300 companies and trade associations which has actively pressed for passage of product liability legislation.

But Gene Kimmelman, legislative director of the Consumer Federation of America, criticized the $250,000 cap for pain and suffering awards. “We think the cap is totally unfair to those who have been injured,� he said, because “it unfairly limits their recovery to a figure far below their real monetary loss.�

In the final vote Thursday, several senators indicated that they were uncomfortable voting to include the $250,000 cap in the bill. Sources who asked not to be named said it is likely that some changes will be made to ensure that the bill will not die because of the cap.

Meanwhile, Florida Gov. Bob Graham signed a bill into law Thursday that would roll back all liability insurance rates in that state to 1984 levels, strengthen regulation of the state insurance industry, and change the legal rules for personal injury and wrongful death lawsuits including placing a $450,000 limit on damages for pain and suffering in such cases.