TORT REFORM has been an issue facing contractors, wholesalers and manufacturers since I started covering the plumbing and heating industry about 14 years ago.
If you're keeping score, that translates into a Democrat being in the White House for eight of those years and a Republican for the other six. Republicans have controlled Congress for most of that time.
The closest that a major tort reform bill came to being enacted, as I recall, was during the Clinton administration. The legislation made it through both houses of Congress before Clinton vetoed it, saying that particular bill did not provide enough protection for victims of defective products. Supporters of the bill were not numerous enough to override the veto.
And that's one of two primary reasons why politicians of both parties have difficulty enacting legislation that puts limits on lawsuits which wind up costing businesses big bucks. The sad truth is that across the broad range of U. S. industry, some consumers really are victimized by negligence or faulty products.
The other factor that most troubles lawmakers is much more of a political reality: The number of potential voters among business people who would benefit from liability reform is much smaller than the number of consumers who most likely would not embrace any caps on jury awards. This line of thinking does not account, of course, for the long-term harm to the economy that the proliferation of frivolous lawsuits can bring.
Jo Wagner, president of CTO Inc. in Texas, testified July 22 before Congress to spell out the debilitating effects that such lawsuits have wreaked on plumbing contractors. Litigation alleging negligence, construction defects, mold infestation, defective products and installations have resulted in higher insurance rates, layoffs, lost business opportunities and even bankruptcy among her peers, she told committee members. During her testimony, she related the experiences of fellow contractors.
A cap on attorney's fees could go a long way toward reducing the number of lawsuits.
It's important that Wagner had the opportunity to tell Congress her and their stories. Contractors never can assume-that their representatives know anything about their business. You have to tell them in very specific terms about what they have to do in order for you to be able to support them. That's why we urge you to tell your representatives how these lawsuits affect you.
It's also significant that Wagner had the backing of the Plumbing-Heating-Cooling Contractors - National Association. In addition to gathering examples of unfair litigation such as those just mentioned, PHCC is one of several trade groups to commission an analysis of the negative impact that this kind of litigation has made on the construction industry. Groups such as PHCC, American Supply Association and Gas Appliance Manufacturers Association have been active in the fight for tort reform and have given their members a stronger voice in Washington on this subject.
Through the efforts of individuals and trade groups, legislative solutions must be found that benefit members of the business community without penalizing true victims of business malfeasance. I believe a solution that involves putting a cap on attorney's fees could go a long way toward reducing the amounts awarded by juries as well as decreasing the number of frivolous lawsuits being filed in the first place. Federal legislation is needed to prevent the current patchwork of state laws that encourage jury shopping by some plaintiffs.
We have to add, however, that you must do more than rely on the federal government to protect your business from frivolous lawsuits. Technical and safety training is more critical than ever so that employees are prepared to perform their jobs correctly.
Contractors and manufacturers must work together to make sure that installations are done properly and that no faulty equipment goes unreported. All members of the construction team have to work together to try to prevent any surprises that later end up in court.
An end to frivolous lawsuits that threaten your livelihood has been a long time coming. We urge you to do whatever you can in Washington and in your shop to limit your exposure to risk and to stem the tide of litigation that is hurting the entire industry.