The Trouble with Torts
The liability system in New York State is not governed by a single written “tort law” adopted by the Legislature, but by an elaborate framework of different statutes and judicial precedents.
Both the cost and the volume of tort litigation in New York are influenced by what happens in the relatively small number of liability cases that go to trial every year. Trial outcomes are reflected in jury awards, in bench verdicts, and in settlements agreed to by the parties to lawsuits that are resolved before they go to trial.
A legal hodge-podge
As a leading casebook on the subject puts it, “the present-day hodge-podge of judicially created tort law and statutory tort law is not always easy to comprehend, and certainly is not reconcilable along philosophical, logical or practical lines. New York law of torts has become increasingly more complicated and difficult to understand and apply.”(2)
The impact of this confusion can vary, depending on the activity and sector of the economy involved.
In the area of product liability, for example, there is no clear-cut statutory framework, only a long string of court cases that have steadily expanded the ways in which manufacturers can be sued.
For the construction industry, on the other hand, at least one rule is all too clear. Notwithstanding the Workers' Compensation Law (which generally limits lawsuits over workplace injuries), contractors and site owners can be successfully sued by virtually any worker who is injured in a fall on a building site--even if the injury was the worker's own fault.
Meanwhile, in the one area of liability that touches the largest number of New Yorkers, as drivers, a statute designed to minimize litigation appears to be fraying around the edges.
Enacted in 1973, New York State's no-fault automobile insurance law restricts lawsuits and requires insurers to reimburse economic losses resulting from injuries suffered in car crashes. However, as explained in this section, plaintiffs' lawyers have been finding room for a sharply rising number of motor vehicle tort claims under the law's “serious injury” exceptions--despite a drop in personal injury accidents.
The law of "contorts"
One of New York State's pre-eminent 20th century jurists, Benjamin Cardozo, was among those who shaped the foundations of tort law for America's modern consumer economy. In the 1916 case of MacPherson v. Buick, Cardozo wrote the state Court of Appeals opinion explaining that a car manufacturer could be held liable for an accident caused by a defective wheel--even though there was no direct contractual relationship between the manufacturer and the purchaser of the car.
While it marked a significant precedent for its time, MacPherson and cases like it did not stray far from the well-established presumption that negligence had to be proven before a defendant could be held liable for damages. For you to be held responsible for injuring someone else, it had to be clear that you had failed to use prudent care in the situation.
Over the last 40 years, however, the law of torts has evolved into what's been called a law of ”contorts"--a system focused less on rights and wrongs than on finding a source of compensation for any injury, regardless of fault. Along the way, in many areas of the law, negligence seems to have become almost irrelevant.
Although our system of tort law is supposed to deter hazardous practices, “judges and juries [are], for the most part, committed to running a generous sort of charity," says Peter Huber, a leading critic of prevailing tort laws. ”If the new tort system cannot find a careless defendant after an accident, it will often settle for a merely wealthy one. But the wealthy defendant [a manufacturer or municipality, for example] is more often part of the safety solution rather than the safety problem."(3)
Taken at an individual case level, such an attitude is entirely human and easy to understand--as countless jury verdicts have demonstrated. Here is a (perhaps pitiably injured) plaintiff who could really use some money. Here is a defendant that looks like it (or he or she) could ”afford" to pay a lot--a big company, a big city, or somebody with a lot of insurance coverage. OK, so the defendant really hasn't been negligent, really hasn't done anything wrong--but hey, the plaintiff needs money, and the defendant has got money, so why not?
Viewed in terms of the impact on the whole system, unfortunately, this attitude corrodes the idea of justice; undermines incentives for safe products, safe operations and safe conduct; and drives up costs for everyone. As lawsuits are decided on the basis of who can afford to pay rather than on the basis of whose conduct has been faulty, respect for the idea of justice declines, and the legal-lottery mentality only becomes more pervasive. When lawsuits are decided on the basis of sympathy rather than on the merits, the incentives for people to follow safe practices and for industry to make safe products are reduced. And if juries think that a big city or a big company or a well-insured defendant can "afford" to pay a big damage award, they are forgetting that in the end everyone pays for such awards, through higher taxes, higher prices, higher insurance premiums.
This point was made more than a decade ago by the Advisory Commission on Liability Insurance, chaired by former Court of Appeals Judge Jones.
"To the extent that the primary purpose of the system becomes to leave no seriously injured person uncompensated, regardless of the defendant's fault or responsibility, the selectivity required to discourage negligence erodes and the cost of compensation rises," the Jones Commission said in its final report.(4)
"I'm afraid you might sue me"
Every new frontier of liability charted under existing tort law brings with it higher costs and new restrictions on the range of services, activities and products available to the average citizen.
Fear of lawsuits has made its perverse effects felt in many areas of everyday life. Municipalities restrict recreational activities and avoid opening more parks. Small businesses refrain from lending or donating surplus materials to charity. Your PTA cancels after-school sports programs. Churches and civic groups curtail the use of their facilities, even by members. Groups that organize sports and other activities for children find that they have trouble recruiting leaders, after reports in the newspapers about lawsuits attacking volunteer leaders personally over matters as trivial as who got to play on which team. The high-school swim team sends home two releases to be signed before your child can participate in the state championships. And colleges consider ending study-abroad programs, lest they be held liable for attacks on the students they sponsor overseas.
Even clergy are not immune from the threat of lawsuits. Priests and ministers around the country are reported to be in a state of "anxious paralysis" over litigation, leading them to limit counseling sessions. The message to troubled parishioners, says one minister, is, "I'd like to see you, but I'm afraid you might sue me."(5)
The economic damages sought by injured plaintiffs--lost wages and medical benefits--are only part of the liability equation. The real wild-card in New York's game of lawsuit lottery is the "non-economic" category, where there are literally no limits on awards for such highly subjective injuries as emotional trauma, loss of companionship, and pain and suffering.
The "increased propensity to compensate regardless of fault and the tendency to assign larger but highly variable values to non-economic injury" were cited by the Jones Commission in 1986 as key reasons that liability court cases have become "more costly, less effective as a deterrent to negligence and less predictable in outcome and money dimension--and therefore less insurable."
Employer references: Mum's the word
Few areas illustrate the bizarre extremes of liability more vividly than the growing body of case precedents affecting employment references. Employers have learned they can be sued for providing unflattering references about former workers, even when the references are demonstrably true in every respect. But employers also know they might be slapped with a tort suit if they fail to provide a bad reference about a worker who deserves one.
Walter Olson of the Manhattan Institute cites the example of the Exxon Valdez oil spill, which gave rise to a $20 billion lawsuit accusing the oil company of taking a "callous, cold-hearted business risk" in allowing a captain with a history of alcoholism to command the ship. "At the very same time, Exxon was being sued by numerous other employees who had been moved from sensitive positions due to alcohol or substance abuse," Olson writes:
"It became a standing joke: after the lawyers were done suing you up one side of the street, they'd sue you down the other. They would sue when you gave a bad reference, then sue for a failure to warn--in other words, failing to give a bad references--when your employee committed some atrocity in his new job. They would sue when you turned away a job applicant with a violent of criminal past, or sue if you did take himand he hurt someone."(6)
In a recent New York State "negligent hiring" case, a supermarket in Westchester County was ordered to pay half of a $1.15 million damage award to a former employee who had been stabbed by a co-worker in the store's parking lot. The knife-wielding employee, it was subsequently learned, had a record of violent criminal behavior in another state. Although the supermarket did not know of the assailant's criminal past when it hired him, it somehow should have known or found out about it, the plaintiff argued. (Naturally, it was no defense that it is illegal in New York for an employer to deny employment to someone solely because of a criminal record.)
Trial lawyers and the "consumer" groups they underwrite insist that current practices and court precedents must be maintained to promote safety and discourage risky behavior, and to punish those whose negligent or irresponsible conduct harms others.
The advocates argue that tort laws like New York's actually deserve a large share of the credit for the fact that consumer products are safer than ever, and that life itself is both longer and healthier than it has ever been. By this analysis, tort taxes are simply the price we must all pay for these advances.
But the available evidence suggests that these claims are overblown, to say the least. When targeted by liability suits, many companies have had to reduce innovation--including innovations that could have improved safety--and to introduce fewer new products.(7) Such behavior is both predictable and understandable when product improvements can be cited as evidence that older products were defective, as is the case in New York State.
In a 1990 survey of New York manufacturers conducted for Prof. Henry Mark Holzer of Brooklyn Law School, 54 percent of the firms previously involved in a product liability lawsuit said they had chosen not to introduce some new product because of liability concerns. Even among firms never involved in a lawsuit, 26 percent had chosen not to introduce a new product due to liability concerns.
"The data suggest that businesses that introduce new products have been the most common targets of liability lawsuits, and they are responding to this burden by reducing the number of new products being brought to market," Holzer wrote. And, he warned, "as more of these firms are exposed to liability lawsuits, the number of products being withheld from the market is likely to increase further."(8)
Smaller firms have the most to lose from gambling on a new product, since one liability award--or even a flurry of unsuccessful claims--could spell disaster. The mere filing of a lawsuit, regardless of merit, can have very harmful consequences for a small firm's ability to raise capital. Several executives have told of being refused bank loans after the bankers learned that the firms were facing unpredictable lawsuits that could jeopardize their ability to pay.
You can fight--but there's a price if you do. Take the case of Hannay Reels, Inc., a small manufacturer in Albany County. The company's products include state-of-the-art reels used to store hose on fire engines at airports, large cities and so on; the world is a demonstrably safer place because of Hannay Reels. But that hasn't kept the lawsuits away--it seems only to have encouraged them. The company has been sued 18 times. Company President Roger Hannay fights every suit--and has won every time. But the cost of defending the company is sometimes greater than what it would have cost to settle the case, he says.(9)
Impeding the sources of progress
In every way that we can measure, Americans are healthier and live longer than ever before in human history. The benefits of progress--progress produced largely by our private-sector economy and our major corporations--enable more Americans to earn a more comfortable living than was possible even a generation ago, in jobs that are safer than even a generation ago, buying products that are safer than even a generation ago, getting medical treatment and pharmaceuticals that are more advanced than even a generation ago, in an ecosystem that is cleaner than even a generation ago.
Yet trial lawyers continue to argue that wildly expensive and expansive definitions of tort law are necessary to "protect" consumers from the same industries and professionals whose products and services have been largely responsible for improving the quality of life.
The chilling effects of liability lawsuits and mushrooming insurance costs have been especially dramatic in the pharmaceutical field. For example, the number of firms producing vaccines for five serious childhood diseases plummeted from 13 to three, and the cost of the vaccines skyrocketed, during the 1980s. And only a handful of firms are researching new contraceptive devices--leading the National Academy of Sciences to recommend that pharmaceutical firms somehow be shielded from the costs of product liability lawsuits.
Merit and safety often become moot issues in the ongoing liability drama. When Bendectin, the popular and effective morning sickness drug, was withdrawn from the market by Marrion Merrell Dow Pharmaceuticals, it was not because the product had proven unsafe. It was because Bendectin sales barely covered the annual costs of legal fees and insurance--although the company had never lost a product liability case, and claims against the product were proven to be unfounded.
Liability has been a significant and well-documented factor in health-care costs--adding $600 to the bill for a baby's delivery in New York, for example.(10) But patients also suffer from reduced quality of care when health-care professionals avoid specialties seen as risky or when physicians "think legally, not clinically" by practicing defensive medicine.
The best available evidence--including a Harvard study commissioned by then New York State Health Commissioner Dr. David Axelrod in the late 1980s--indicates that malpractice suits have done little to actually reduce injuries caused through medical negligence. As one researcher observed in a 1991 compilation of liability studies by the Brookings Institute:
"Over the past two decades there has been no basic change in the level of adverse (medical) events, and larger numbers of patients injured through negligence have gone uncompensated, all despite the increase in the number of suits, awards and premium payments. Neither the prevention of adverse outcomes nor payment to those injured by them seems furthered by the present system." [emphasis added](11)
In a closed economic system, the stifling impact of strict liability on product and service innovation would arguably be reason enough to demand reforms. But in today's truly global economy, tort costs also can leave New York companies and workers priced out of the international market.
This concern was reflected in the results of a 1991 survey by the Public Policy Institute. Half of the respondents said the state's product liability system had a "strongly negative" or "negative" effect on their company's ability to compete with foreign and domestic firms.
In Holzer's study, 69 percent of those surveyed felt New York's product liability laws put them at a competitive disadvantage with foreign firms (almost none of whom face a litigious atmosphere in their home markets remotely comparable to that prevailing in New York). Given the work and money New York State invests in attracting business, the system is clearly contradictory and counterproductive.
And New York State's competitive disadvantage is getting worse. In the last five years, significant tort reforms have been enacted in at least 20 states, including Ohio, Illinois, California and Texas--all of which also happen to be major industrial competitors of the Empire State.
The latest survey of business in New York--conducted by The Business Council of New York State, Inc., among more than 100 companies in late 1997--found that 69 percent of respondents felt the liability system in New York has either a "negative" or "very negative" impact on their business. An overwhelming 72 percent said the threat of litigation either "significantly" or "somewhat" stifles innovation and product development.
The taxpayers' “deep pockets"
High local taxes are another crucial competitiveness factor for New York. And taxes are pushed higher when the state's prevailing liability standards are combined with a prevailing view among jurors that local governments can easily afford big damage awards.
On a national basis, litigation costs incurred by local governments escalated markedly in the 1990s.(12)
No municipality in the United States foots a bigger tort bill than the city of New York, whose annual liability costs of more than $260 million exceed its expenditures on parks and libraries combined. In the slip-and-fall category alone, suing the city has given rise to a legal cottage industry--the Big Apple Pothole and Sidewalk Protection Corporation. Hard to believe though it may be, this is an actual corporation established by trial lawyers to catalog holes, uneven slabs and other sidewalk irregularities for which the city can be held liable.
Mayor Rudolph Giuliani calls it a system in which "reason has given way to chaos."
"A criminal, a subway mugger preying on the elderly, becomes a multimillionaire thanks to a Manhattan jury which awards him $4.3 million for being shot as he attempts to flee from the scene of his crime. One Bronx jury votes to give $500,000 to a woman who breaks her toe in a pothole, and another awards $6 million to the family of a drunk who fell in front of a subway train, finding him wholly without blame. The height of absurdity is reached when the jury in a medical malpractice case awards $27 million to the injured patient, and another $6 million to the members of his family, who hadn't even sued."
Highway accidents are another major category of litigation against the city. One of the more extreme examples cited by Mayor Giuliani involved a $650,000 jury verdict against the city in the case of a drunk driver, who collided with another car while speeding northbound in the southbound lanes of the Hutchison River Parkway.
"Because the drunk was also killed, the jury was forced to speculate where from among at least three possibilities he had entered [the highway], and that he must have been confused by one or another of the posted 'WRONG WAY' signs. Nevertheless, although no one could show a single previous instance of a car actually traveling in the wrong direction on the Hutchison River Parkway, a Bronx jury took very little time to find (the drunk driver) less culpable than the City's traffic engineers."(13)
What's really going on in such cases, legal observers agree, is the apparent belief by juries--especially in the Bronx and Brooklyn--that the city's pockets are not only deep but bottomless. That's why Mayor Giuliani and other local officials are seeking a law that would require damage suits against municipalities to be filed in the non-jury Court of Claims, where cases against state government are now heard.
While big cities make the biggest targets, smaller municipalities are by no means immune--as the Saratoga County town of Greenfield learned in 1996, when a jury found it liable for $3.7 million in medical bills and "pain and suffering" damages to a man who fractured his spine while riding a toboggan down a town-owned hill. The verdict was more than the entire town budget--and more than three times the town's insurance coverage.
Thanks to the doctrine of joint and several liability, municipalities (like other defendants) can be forced to shoulder an entire damage award even when they are minimally responsible. That's what happened in 1989 to the city of Schenectady, which was ordered to pay every penny of the $980,000 in damages awarded by a jury in connection with a motor vehicle accident for which the city's contributory negligence was assessed at only 10 percent.(14)
The city had to take out a loan to raise the money.
The "Safe Place to Sue" law
Sections 240 and 241 of the state Labor Law were enacted in the 1800s to provide workers with some legal recourse for on-the-job injuries. After the state Workers' Compensation Law was enacted in the early 1900s, guaranteeing payment of employee injury claims while banning most lawsuits over workplace injuries, the 240 and 241 provisions lay dormant and were presumed obsolete--until the 1970s, when trial lawyers began exploiting them as territory for litigation against contractors and property owners.
While the provisions in question are known to their proponents as the "Safe Place to Work Law," it would be more accurate to describe them as a "Safe Place to Sue Law"--because Sections 240 and 241 permit a victory for the plaintiff regardless of a defendant's efforts to enhance job site safety.
For all practical purposes, a construction contractor or construction site owner in New York faces an "absolute liability" standard under Section 240 and 241. The standard applies regardless of an employee's own negligence--even if the worker is injured after disregarding a safety warning, or after consuming alcohol or using drugs.
No-fault? No problem!
New York is one of 13 states with a no-fault auto insurance law designed to minimize litigation by ensuring the automatic reimbursement of property and personal injury damages arising from the vast majority of accidents. Under New York's statute (Section 5101 of the Insurance Law), a driver's auto insurance policy will cover up to $50,000 of economic losses--defined to include both medical expenses and lost wages--if he or she is injured in a car crash, regardless of who was at fault.
In exchange for this guarantee of coverage, policyholders are not allowed to sue another driver for damages except in cases of "serious injury," which is defined by law to include death, dismemberment, significant disfigurement, a bone fracture, loss of a fetus, "permanent loss of use of a body organ, member, function or system," "permanent consequential limitation of use of a body organ or member," and "significant limitation of use of a body function or system."
Serious injuries under the no-fault law also are defined to include "a medically determined injury or impairment of a non-permanent nature which prevents the injured person from performing substantially all of the material acts which constitute such person's usual and customary daily activities for not less than ninety days during the one hundred eighty days immediately following the occurrence of the injury or impairment."
On the surface, the language sounds very restrictive. But in recent years, plaintiff's lawyers appear to be exploiting more and more exceptions to the no-fault bar on tort suits.
For example, New York courts have found that a medical diagnosis of a "herniated, desiccated or bulging disk" resulting from a car crash can constitute grounds for a serious injury claim under the no-fault law--despite recent medical research showing that two-thirds of the adult population have the same disk abnormalities with no back pain at all.(15) Courts have also allowed auto accident lawsuits based on "serious injuries" as minor as a sprained ankle and scars on one knee (Savage v. Delacruz, 474 NYS2d 850).
Since the no-fault law itself has not changed since the late 1970s, the loosening of the serious injury standard would appear to be the most plausible explanation for a significant jump in motor vehicle tort suits between 1988 and 1996, as reported in Section 3.
Structured awards: 2+2 = 8?
As if the tort laws were not already tilted too strongly in favor of uncertainty and unpredictability, a well-intentioned "reform" in New York actually made expenses worse.
At the heart of the issue is the economic concept known as present value (what a promise of future payments stretched out over a period of time is worth today, given the effect of interest and inflation on the time value of money).
Prior to 1985, defendants had to make lump sum payments to plaintiffs for the full, undiscounted value of damages awarded by juries. When big awards were involved, that approach had two problems--it put a huge financial strain on even the most deep-pocketed defendants, and it presented plaintiffs and their families with an often irresistible temptation to squander large sums that were intended to last them for decades.
To address the problem, the Legislature in 1985 adopted Article 50-A of the Civil Practice Law & Rules (CPLR) allowing "structured payments" of jury awards in medical malpractice cases. In 1986, the Legislature adopted Article 50-B, extending the same approach to general liability cases.
The new laws said the first $250,000 of any award must be paid in a lump sum, but the remaining amount over $250,000 could be turned into an annual annuity contract. Juries would decide the payment period--usually a function of actuarial testimony based on the plaintiff's age and projected working life--but annuity contracts for "pain and suffering" awards would in all cases be limited to ten years.
Article 50-A and 50-B also included this directive to judges: "The annual payment for the first year shall be calculated by dividing the remaining amount of future damages [after the $250,00 lump sum] by the number of years over which such payments shall be made and the payment due in each succeeding year shall be computed by adding four percent to the previous year's payment. "
But another revision, contained in CPLR Section 4111(d), stipulated that juries "shall be instructed to award the full amount of future damages, as calculated, without reduction to present value." [emphasis added].
In other words, juries are to assess damages in undiscounted terms, adding in inflation as well as amounts attributed to lost productivity and wage gains. (Attorney fees in structured award cases are based on the lump sum plus the annuity's present value.)
Oskar Harmon, a University of Connecticut economics professor who has written extensively on the issue, says the combination of the 4 percent rule for judges in 50-A/50-B and the requirement for undiscounted damage awards by juries in Section 4111(d) creates a mathematical "plaintiff bias" in New York law--because, in effect, it gives plaintiffs double compensation for the time value of money.
The error did not pass unnoticed by defense attorneys, and it was challenged in Ursini v. Sussman (143 Misc2d 72), one of the first major malpractice claims initiated after the law took effect.
In the Ursini case, which involved injuries to a child, the jury's verdict included an award of $2 million for future lost earnings, reflecting discounted value calculations including projected inflation and lost productivity over a period of 44 years. The trial judge, carefully applying the 50-A/50-B statute as written, inflated the $2 million award into $5.2 million in annual annuity payments. The double-counting interpretation of the new statute was upheld on appeal.
The impact of the 1985-86 changes is difficult to quantify, but there is evidence that the cost is considerable in the long run.
In a 1995 study, Dr. Harmon and Professor James Lambrinos of Union College illustrated how the Article 50-A/50-B structured payment formula "systematically overvalues the jury award" in tort cases. They produced detailed tables showing nine different examples of hypothetical economic damages that the statutory language would inflate by 31 percent to 102 percent over the undiscounted value, depending on the age and projected remaining work life of the plaintiff.(16)
Similar findings were reported in a separate study of the same provisions by economists Michael J. Wolkoff and Eric A. Hanushek of the University of Rochester, who concluded the structured award provisions "greatly inflate the value of compensation paid to plaintiffs (as well as to plaintiff's attorneys)."(17)
What the Jones Commission found
Liability cost pressures had been building for at least 20 years before the issue burst into public view in the mid-1980s. By 1985, insurance premiums had begun rising so steeply and precipitously that the impact was being felt throughout the private and public sectors.
As the crisis mounted, businesses and municipalities joined the medical profession in pleading with the Legislature for tort reforms. But opponents of reform, led by trial lawyers, insisted the problem was really price-gouging and anti-competitive tactics by the insurance industry. Their claims were reflected in the name then Governor Mario Cuomo assigned to the blue-ribbon panel appointed to study the problem: "The Advisory Commission on Liability Insurance."
But after more than a year of exhaustive study, the Jones Commission found that the issue wasn't really "insurance," it was lawsuits. It concluded that reform advocates had been right about the underlying causes of the crisis.
"The tort law is the fundamental determinant of the underwriting cost base of the property/casualty insurance industry," the Commission said. "It is a surge in this base that has driven the long-term surge in insurance prices, as well as the periodic constrictions of insurance availability."
The Commission said it would be difficult to predict "the precise size and timing of the impact on insurance market behavior that will be generated by any particular change or set of changes in the tort law." But that uncertainty was not seen as sufficient reason to delay action on reform.
"The question is whether public policy is better served by acting now or by deferring action because it is impossible to construct a geometric proof that the available knowledge is not misleading. The Commission believes that the responsible choice is to act now. The uncertainties that remain are no greater than the doubts that frequently attend public policy choice."(18)
Anticipating the Commission's final report, the Legislature in 1986 enacted a reform package that:
- Required courts to award the successful party court costs and attorney fees, up to $10,000, in cases involving frivolous claims.
- Mandated that courts offset any liability award by whatever other insurance coverage an accident victim may receive.
- Permitted a defendant who is less than 50 percent at fault for an accident to escape joint and several liability for non-economic losses.
These changes were less sweeping than they may have appeared on the surface. For example, the limitation on joint and several liability does not apply to toxic substance cases, construction cases, motor vehicles cases, contract cases and a variety of other circumstances.
And, in subsequent years, the Legislature failed to take up the Jones Commission's recommendations for reform in a number of areas, including the Section 240 and 241 provisions. The Commission said the Labor Law should be amended to impose liability only on contractors and site owners found to be negligent, and to reduce all verdicts by the amount of the employee's own culpable conduct.
Liability reforms on the table
While siding firmly with proponents of product liability reform, the Commission also said in 1986 that it would be preferable for such issues to be addressed on the federal level. It took 10 years, but Congress finally passed a sweeping product liability reform law in 1996--only to see it vetoed by President Clinton, who said among other things that tort law should be determined by the states.
With the reform ball now back in the Legislature's corner, the Jones Commission's liability recommendations still waiting for action include adoption of:
- A statute of repose, reducing the exposure of defendants to lawsuits over alleged defects or maintenance that occurred far in the past.
- A "state-of-the-art defense" creating a presumption that a product is reasonably safe if the design conformed with the state of the art in the industry at time of manufacture.
- A prohibition on using changes in manufacturing techniques, or new wording of product safety warnings, as evidence that a product was defective.
- A statute providing that non-manufacturing sellers cannot be held liable for injuries caused by products in cases where they could not have known about the defect.
One or more of these product liability reform provisions already have been adopted in at least nine states--including such major industrial competitors as Illinois, Indiana, Michigan, Ohio, Texas and New Jersey.
2. West's New York Practice Series, Vol. 15, "New York Law of Torts," by Lee S. Kriendler, Blanca I. Rodriguez, David Beekman, and David C. Cook, p. viii, St. Paul, Minn. West Group, 1997
3. Peter Huber, Liability: The Legal Revolution and Its Consequences, Basic Books, New York, 1988, p. 12. Explication in brackets added.
4. Insuring Our Future: Report of the Governor's Advisory Commission on Liability Insurance, Vol. II, July 1986, p. 191-192.
5. "Malpractice Suits Lead Many Pastors to Offer Parishioners Less Counseling," Wall Street Journal, Feb. 5, 1998, at B1.
6. The Excuse Factory: How Employment Law is Paralyzing the American Workplace, The Free Press, 1997, p. 268.
7. Weber, N. "Product Liability: The Corporate Response." Research report 893, the Conference Board. See also There Ought to be a Law, Public Policy Institute, 1991.
8. Henry Mark Holzer, "Product Liability Law: The Impact on New York Businesses," 1990.
9. This is a classic example of the potential usefulness of a "loser pays" provision, under which plaintiffs might have to pay a defendant's legal costs if the defendant won. Trial lawyers hoping for contingency-fee business would think twice about taking on a company that had already repeatedly won the court cases brought against it.
10. The American College of Gynecology and Obstetrics calculated the add-on in New York at $607, based on 1989 data. See Peter Huber and Robert E. Litan, The Liability Maze: The Impact of Liability Law on Safety and Innovation, The Brookings Institution, Washington, DC, 1991, p. 239.
11. Ibid., p. 246.
12. "The Impact of Litigation on Municipalities," paper presented by Susan A. MacManus to the Conference on Municipal Liability, Government Law Center, Albany Law School, May 25, 1993.
13. Both quotations from "The City's Case for Tort Reform," Office of the Mayor, 1994.
14. "Municipalities Rich Targets for Lawsuits in Car Accidents," Albany Times Union, October 2, 1994, at D5.
15. "Study Raises Serious Doubts About Commonly Used Methods of Treating Back Pain," New York Times, July 14, 1994, at A16.
16. Lambrinos and Harmon, "Plaintiff Bias in the CPLR 50-A/50-B Statutes," Albany Law Review, Volume 59, No. 2.
17. Wolkoff and Hanushek, "The Economics of Structured Judgments Under CPLR Article 50-B," Buffalo Law Review, Vol. 43, No. 2.
18. Insuring Our Future: Report of the Governor's Advisory Commission on Liability Insurance, Vol. II, July 1986, p. 69.
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