ROANOKE TIMES
Copyright (c) 1995, Roanoke Times
DATE: Tuesday, December 5, 1995 TAG: 9512050035
SECTION: EDITORIAL PAGE: A-7 EDITION: METRO
SOURCE: MARK WHERRY
THE NATION'S current product-liability system fails in numerous ways. It does little to protect injured employees, maintain new product innovation or increase jobs.
The only winners under the law today are plaintiffs' lawyers who receive more money than the victims they represent. These lawyers bring a staggering number of bogus cases, causing manufacturers - among others - to spend exorbitant amounts defending themselves against lawsuits that never should have been brought.
Consumers are victims of this flawed system, too: Goods cost more as a result of lawsuits; worse yet, needed products never make it to market.
Here at Owens-Corning in Martinsville, we manufacture residential windows. Companywide, our product-liability filings have doubled since last year. We currently have a backlog of more than 100,000 cases. Just since August 1995, more than 15,000 cases have been filed. The longer Congress takes to pass product-liability legislation, the more time the plaintiffs' lawyers have to file frivolous claims to beat any enactment date.
The system has to change. Otherwise, local, regional, national and international employers, like Owens-Corning, won't be able to pursue long-term growth plans, and the jobs of those already employed will be threatened. In Virginia, we employ 80 people; in the United States, we employ 12,000; worldwide, we employ 17,000.
Over the next few years, we hope to expand our plant operations and increase job opportunities at Owens-Corning here in Martinsville. However, achieving our goals will be almost impossible if the current trend of frivolous law suits and hefty settlement costs are not contained through a unified product-liability law.
The current system is bad news all the way around. Fortunately this year, Congress can do something about it.
Both the Senate and House have passed legal-reform bills. Legal reform is also a part of the House Republican's Contract With America, and it has long received support from Democrats as well. This bipartisan momentum should help a great deal in pushing the legislation first through a conference committee, which will hammer out the differences between the two bills, and then to the president for his signature this year.
Congress must seize this opportunity for change, because our current legal system is out of control. Today's product-liability system contains broad and varying inconsistencies. Because of many loopholes in the present system, manufacturers can be sued in any state, allowing lawyers to "shop around" for the most advantageous and lucrative judicial venue. Unfortunately, victims of product-liability suits collect less than half of all the money awarded. Most of it goes to the lawyers.
The system impedes manufacturers' research and development of new products, and raises the cost of existing products. Further, the current state-by-state patchwork of laws vastly diminishes our industry's competitiveness over foreign manufacturers. In the United States, liability costs are 15 times greater than in Japan and 20 times more than in Europe.
The reform legislation now pending in Congress would address these problems by establishing a fair and balanced national liability law that will place manufacturers, workers and consumers on a level playing field.
Today, manufacturers are sued for products made decades ago that have since been altered or adjusted. The pending legislation would correct these problems by providing for a reduction of a claimant's award if the harm resulted from product misuse or alteration.
Employees and consumers should be adequately protected from faulty or harmful equipment and products. My company is committed to compensating those individuals who can demonstrate that they have been harmed by our products. This legislation would do nothing to prevent this process, but reform is needed to institute some reasonable and rational procedure in determining who is liable for what.
Under the current system, bankrupt companies are protected from paying damages, forcing the recovering solvent company to pay 100 percent of the damages when they have little or no direct involvement with the injury.
Punitive damages are intended to punish wrongdoers, but there are no clear guidelines as to when they should be awarded. The pending legislation would address this by establishing limitations on punitive damages awards, which will help to avoid runaway lawsuits. This would in no way, however, prevent a person's right to seek compensation for his or her injury.
In this country, product-liability costs alone are estimated between $80 and $120 billion per year - and as taxpayers, we all pay the price. Hundreds of thousands of small businesses around the country suffer because they cannot develop new products or technologies or hire new employees because of exorbitant product liability costs.
American businesses want to retain their leadership internationally, and compete effectively domestically while providing economic growth in the areas in which they operate. Congress must aid this process by stepping up to the plate and reforming the legal system as soon as possible.
Mark Wherry is plant manager of Owens-Corning's facility in Martinsville.
LENGTH: Medium: 92 lines ILLUSTRATION: GRAPHIC: Nancy Ohanian/LATimesby CNB