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WASHINGTON -- A new law that limits the product liability of biomaterials manufacturers could spur broader reform.
If the Biomaterials Access Assurance Act accomplishes what the 1994 General Aviation Reform Act did, it will prove for a second time "that proponents of tort reform are telling the truth" when they say that product liability reform won't hurt consumers and will promote economic growth, said Victor E. Schwartz, counsel to the Product Liability Coordinating Committee. The Arlington, Va.-based, business-supported PLCC advocates broad-based product liability reform.
GARA, the first federal product liability reform law, limited the liability of manufacturers of light aircraft. The measure, which President Clinton signed in 1994, helped resurrect the general aviation industry without compromising safety, say advocates of additional product liability reform. They predict the biomaterials law, which the president signed last week, could perform a similar function by making raw materials needed for a variety of life-saving devices more readily available.
"I think it will be very beneficial, as has been the case with GARA. We believe that the enactment of the biomaterials bill will have a very positive impact on the economy and show once again that tort reform is a positive for all of society and doesn't carry any of the negatives that the trial lawyers and (Ralph) Nader have suggested over these many years," said James A. Anderson, vp-government relations for the National Assn. of Wholesaler-Distributors in Washington.
Lawrence Finerans, assistant vp-resources, environment and regulation for the National Assn. of Manufacturers in Washington, said that with the enactment of GARA, "Consumer activists said the sky would literally be falling, and it didn't."
"Hopefully, in the long run, people will see that legal reform does not lead to a more unsafe world. In fact, it could actually make the world safer," he added.
The biomaterials bill originally was part of a broader product liability bill that died in the Senate earlier this summer (BI, July 13). The biomaterials measure, which awaits the president's signature after final House passage late last month, would give suppliers of raw materials used to make certain medical devices protection against product liability suits. A supplier still would be liable in cases where the manufacturer of a medical device such as a pacemaker or a brain shunt had gone out of business. In addition, the measure does not cover breast implants.
Mr. Nader wasted little time writing to urge President Clinton to veto the bill. The bill would give "liability protection to some negligent and even intentionally tortious suppliers," Mr. Nader wrote. He charged that the measure would create a "legal maze" for those with legitimate claims against suppliers.
He dismissed suppliers' claims that current product liability law could lead to a shortage of biomaterials. "Supply creates demand, and if some companies are posturing a production strike in order to extort this bill from the federal government, why should you encourage such tactics by signing this legislation? This was an industry bluff that would have been called by competing companies here and abroad which would have made such materials available. Capitulating to this industry's misinformation and threats will only encourage others to act in an equally underhanded manner," wrote Mr. Nader.
But Mr. Schwartz pointed out that one of the similarities between GARA and the biomaterials bill is that the people who used the products -- not the businesses that would be protected by the measures -- pushed for enactment. Pilots and aircraft owners -- "the people who would sue" if aircraft proved to be defective -- supported GARA because they wanted to be able to buy planes, he said. People who need medical devices advocated passage of the biomaterials bill, he said. "People who would be potential plaintiffs were clear and apparent in their support," said Mr. Schwartz.
Industry-by-industry reform may be the shape of product liability in the future, said Anne Allen, director-government relations for the Risk & Insurance Management Society Inc. in New York.
"Following GARA and the biomaterials bill, it will be easier to get industry-specific reforms than a broad bill," she said. That could eventually mean more comprehensive reform "because you will have a few big industries that have been selected out, and there will be everyone else saying, 'Me too, me too,' " said Ms. Allen.
That won't happen in the current Congress, but success of the biomaterials bill could encourage reforms next year.
"It's hard to imagine a scenario where it would come up before the Senate in the 20 or so legislative days that remain. We've got one eye focused on any possible vehicles, but I think we are thinking through what the next Congress will offer us," according to Mr. Anderson