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Chorus of Reformers Adds New Pitch

Tort critics now focus on limiting damages and establishing clear guidelines for product-liability cases

DAN QUAYLE may be gone from the political scene but one of his favorite issues - reforming the nation's legal system - remains on the front-burner.

Much of the action recently has been on the state level. With King Kong-sized medical-malpractice and product-liability judgments getting wide publicity, most legislatures have passed some form of ``tort reform'' since the late 1980s.

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More than two dozen states have changed ``joint and several liability'' rules, which have been used to force wealthy plaintiffs who were only minimally responsible for some harm to pay almost all of the jury award. Another 21 states have changed the ``collateral source'' rule, which says that juries may not consider evidence that a plaintiff's losses have been compensated from another source.

Since the 1980s, the focus of the tort-reform movement has shifted to other concerns: limiting awards for punitive and noneconomic damages; reining in medical-malpractice judgments; limiting the testimony of ``expert'' witnesses; and establishing clear guidelines for product-liability cases.

Despite stiff opposition from trial lawyers and self-styled consumer groups like Ralph Nader's Public Citizen, the business-backed tort-reform movement persuaded several more states - Arizona, Mississippi, North Dakota, and Texas - to jump on the bandwagon last year.

This year, state legislators in New Jersey are expected to pass a major tort-reform package, while Massachusetts lawmakers appear set to approve a product-liability law. Battles may also be brewing in many other states, including California, one of the biggest centers of personal-injury litigation.

What accounts for the relative success of the tort-reform movement?

Obviously, it received a big boost from former Vice President Quayle, who made lawyer-bashing a big part of the 1992 presidential campaign. But tort reform may actually be seeing more success since Quayle left office, because the issue now carries fewer partisan overtones for Democratic legislators.

Opponents of legal reform credit the business community, led by the American Tort Reform Association (ATRA) in Washington, for mounting a successful public relations campaign across the country to convince most people that the legal system is in need of fundamental repair.

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``They've made a real dent,'' says Barry Nace, president of the Association of Trial Lawyers of America (ATLA). ``If you keep saying something loud enough, sooner or later people will believe you.''

ATRA's message has been boiled down to a slogan - ``Lawsuit Abuse! Guess who picks up the tab?'' - that has appeared on print advertisements, TV commercials, and bumper stickers. The group has even posted its ads aboard buses and subways in several cities, including Philadelphia and Fort Lauderdale, Fla., which, those transit systems say, has led to a drop in claims against them.

Perhaps the most effective tactic of the tort-reform forces has been ``deep lobbying'' - attempts to change the political climate, not to pass specific legislation. Business groups have paid for studies and books outlining the high cost to the economy of runaway litigation. Two of the most successful pro-reform books were written by Peter Huber and Walter Olson, fellows of the free-market Manhattan Institute in New York. Thanks in part to their efforts, public opinion surveys show most Americans now favor overhauling the legal system.

But while the tort-reform movement has enjoyed success at the state level and among the public, it has been stymied in Congress. A major reason why is the political power of ATLA, the trial lawyers' lobby. In the 1991-92 campaign cycle, for instance, ATLA gave a whopping $2.4 million to candidates for federal office, 90 percent going to Democrats.

While that giving pales against the contributions of the business community, ATLA has a key advantage over its adversaries: Large corporations and their trade associations are concerned with a variety of issues. ATLA, by contrast, aims almost all of its firepower against tort reform.

As a result, a comprehensive product-liability bill has been bottled up in Congress for a decade. It has started moving recently, thanks to newfound support from key Democrats, such as Sen. Jay Rockefeller of West Virginia.

A Senate committee passed the product-liability bill on a lopsided vote in November, and a House committee is scheduled to take up the measure this month for the first time in years. William Fay, executive director of the Product Liability Coordinating Committee, predicts that the bill will be signed into law this year.

But Martin Connor, executive director of ATRA, complains that ``there's not much there anymore'' in the product-liability bill. To win the votes of skeptical Democrats, Mr. Fay and other backers of the bill have had to drop such provisions as a cap on punitive damages that many in the business community consider essential.

Fay counters that, while it does not go as far as earlier bills, the product-liability law would still perform a valuable service by establishing a uniform national standard in place of a helter-skelter of state provisions. That, he adds, will make it easier for companies to plan ahead. Public Citizen's Pamela Gilbert replies that the law would keep injured consumers from getting fair compensation.

The fight over the product-liability legislation is one of two major tort-reform battles looming in Congress this year. The other is over health-care reform. Physicians' groups are eager to curb malpractice awards which, they say, have driven insurance premiums through the roof.

The Clinton health plan includes only modest legal reforms, with the most prominent being a provision to force plaintiffs to seek nonbinding arbitration before proceeding with a lawsuit.

Ms. Gilbert criticizes even those provisions as ``grossly unfair,'' but ATRA's Connor says they do not go nearly far enough. His group is supporting alternative health-care plans offered by Republican lawmakers and Rep. Jim Cooper (D) of Tennessee that would incorporate a $250,000 cap on non-economic damages and many other provisions of California's decade-old malpractice law.

While Congress debates such measures, the most important changes in the legal system may be quietly adopted behind closed doors by lawyers themselves. The American Law Institute (ALI), made up of 2,000 leading lawyers, judges, and law professors, is working on the first overhaul since 1965 of its guidelines on defective-product claims. This review, which is in the middle of a lengthy approval process, will tackle many of the issues not addressed by Congress's product-liability bill, such as what constitutes a defective product.

Aaron Twerski, a professor at Brooklyn Law School, who is one of the leaders of the ALI effort, vows that the new guidelines will be ``pro-common sense, not pro-plaintiff or pro-defendant.'' What the group hopes to do, Professor Twerski says, is to ``bring some order to the confusion'' that currently exists among state and federal courts over basic product-liability issues. If ALI's rules are widely adopted, Twerski adds, they will ``streamline'' litigation over product liability.

But Mr. Olson, the tort-reform advocate at the Manhattan Institute, does not hold out much hope that lawyers will be able to reform themselves. As evidence, he points to the recent decision by a federal judiciary panel to water down Rule 11 of the Federal Rules of Civil Procedure, which allows judges to sanction lawyers for bringing frivolous motions or suits. ``It's the worst development in litigation in years and a perfect example of what happens when you leave reform to the legal establishment,'' Olson says.

Olson favors sweeping legal reforms, including the adoption of the ``English rule,'' which would force a suit's loser to pay the winner's legal fees. But he is not optimistic that state or federal lawmakers will adopt such changes anytime soon - despite their popularity with the public.

He attributes this discrepancy to a disconnect between ``popular culture,'' which is skeptical of lawyers, and ``elite culture,'' which is not. ``At some point the slack will be taken up and one side or the other will notice a jerk,'' Olson says.

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