[Congressional Record Volume 141, Number 45 (Friday, March 10, 1995)]
[Senate]
[Pages S3767-S3768]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                              TORT REFORM

  Mr. ABRAHAM. Mr. President, I would like to congratulate our 
colleagues in the House for acting this week to bring our tort system 
under control. The bill passed by the House earlier this week imposes 
all attorneys fees on a party who turns down a settlement offer if the 
final judgment is not more favorable to the offeree than that which he 
turned down. It also would eliminate junk science from the courtroom 
and require courts to sanction attorneys who file frivolous claims.
  The House action constitutes an important first step toward reforming 
our civil justice system.
  I also would like to take a few moments to respond to the criticism 
recently leveled at attempts to reform our tort system.
  President Clinton and his Attorney General have called the House 
reform bill ``too extreme.'' His counsel Abner Mikva went even further, 
claiming that the bill would ``tilt the legal playing field 
dramatically to the disadvantage of consumers and middle-class 
Americans.''
  Some of our colleagues and the American Trial Lawyer's Association, 
one of President Clinton's most generous and loyal contributors, would 
like this characterization to take hold.
  Opponents of tort reform would like it if the American people were to 
see changes in our civil justice system as a boon to big corporations 
and the rich rather than a broad-based set of reforms that will help 
consumers, victims, and the general public at the expense only of a 
handful of individuals and lawyers who bring frivolous lawsuits.
  To hear much of the public debate you would think that tort reform is 
a struggle between corporate fat cats who want to injure the public 
with impunity and legal barracudas who seek only to feed on small 
business and the tort victims who must entrust lawyers with their 
claims. But this heated rhetoric in my judgment, helps no one, in fact 
it keeps us from focusing on the issue at hand--making our tort system 
more just and fair.
  I come to this debate, not to attack lawyers, but to help victims and 
consumers. I take exception to the charge that tort reform is anti-
consumer, particularly given the faults in the system as it stands.
  Is it really pro-consumer to have a system like the current one in 
which those who are injured--consumers of legal services--receive only 
43 cents of every dollar in damages awarded?
  Is it really pro-consumer to have a system in which, as reported in a 
recent Conference Board survey, 47 percent of firms withdraw products 
from the marketplace, 25 percent discontinue some form of research, and 
8 percent lay off employees, all out of fear of lawsuits?
  Does it really help consumers and the middle class to have a system 
in which, according to a recent Gallup survey, one out of every five 
small businesses decides not to introduce a new product, or not to 
improve an existing one, out of fear of lawsuits?
  Are we and our children better off when pharmaceutical companies stop 
producing helpful drugs like the DPT vaccine out of fear of lawsuits?
  In this last case, that of DPT, two of the three companies making the 
vaccine stopped production in 1985 because they could not afford to 
deal with all the suits arising from the always highly suspect and now 
clearly disproved theory that it might in very rare instances cause 
brain damage. To conserve the limited supply remaining the Centers for 
Disease Control recommended that doctors no longer vaccinate children 
over age 1, leading to who knows how many illnesses in small children.
  Is it really pro-consumer to have a system in which poor, 
unsophisticated clients in particular must hire lawyers, without fully 
knowing how much they will pay or what their options for legal services 
are?
  Are our communities better off when the parents of Little Leaguers 
are afraid to have their kids play or organize games for fear of being 
sued?
  Legal reform is in everyone's interest. The tort reform bill Senator 
McConnell and I have introduced would lower prices, establish a legal 
consumer's right to know what he or she is purchasing and at what cost, 
promote early settlements, and reduce time and cost to injured parties, 
as well as often innocent defendants.
  Our bill would curb windfall profits in lawsuits--thus reducing the 
price ultimately paid for goods by the consumer--by capping punitive 
damages and eliminating joint and several liability.
  The bill would empower clients in their dealings with lawyers by 
requiring that attorneys disclose in writing, to any client with whom 
they have entered a contingency fee agreement, both the actual services 
performed and the precise number of hours expended on performing them. 
The bill also would require lawyers to tell clients that they may pay a 
percentage of their award or, alternatively, pay an hourly fee.
  Thus we would protect consumers' right to know how much they are 
paying and for what services. We recognize this right to know in all 
other markets and should do so in the legal services market as well.
  Our bill also would reform contingency fees by providing that, if a 
plaintiff receives a settlement offer and still wants to go to trial, 
the lawyer would receive the usual contingency percentage only on the 
portion of the award that is above the original offer.
  Besides preventing lawyer over-reaching, this last contingency fee 
reform also will encourage early settlements, thus saving transaction 
costs 
[[Page S3768]] for plaintiffs and defendants, and ultimately consumers.
  Our bill also would allow defendants, by making an early offer, to 
limit their exposure to certain damages and legal fees.
  If a potential defendant agrees to pay in full for economic losses 
and the plaintiff accepts the offer there obviously would be no 
lawsuit. Under our bill, should the plaintiff not accept the offer, he 
or she still can sue, but can only recover noneconomic damages if they 
prove beyond a reasonable doubt that the defendant intentionally acted 
against the plaintiff's rights.
  Besides discouraging lawyers and litigants from unreasonably holding 
out for more money and higher fees unless it clearly is warranted, this 
reform also would discourage defendants and their insurance companies 
from dragging out litigation in hopes of making plaintiffs give up 
their suits and go away.
  Promoting early settlements, reducing insurance and legal transaction 
costs and thus reducing prices and stimulating production and 
innovation, and protecting the legal consumer's right to know. Those 
are the reforms we seek to institute for the good of all members of the 
American community.
  Which brings me to my final point. Community is one of President 
Clinton's favorite terms. The President even wants a new covenant to 
bind us together as a people. Well I too am a proponent of community. I 
think it is important for Americans to join together in their homes, in 
their churches, and on their neighborhood baseball fields to learn one 
another's needs, form common habits, and see one another more as 
brothers and sisters than as strangers.
  But Americans join together less and less, out of fear that an 
accident on the Little League baseball field will land them in court. 
Accidents happen, we all know that. But in my judgment, if we all spend 
all of our time trying to avoid them, or at any rate avoid paying for 
them in court, we will not have much time or energy left over to form 
the bonds of community that hold our society together.
  Without the bonds formed on our ballfields and in our local civic 
halls we will lose that sense of our duty to be decent and civil to one 
another that maintains our civilization.
  Our current tort system, by turning neighbors into potential 
defendants and/or plaintiffs, discourages us from coming together, and 
that is a major reason why I believe it must be changed. We must reform 
the system to reward the neighborly, who seek to settle disputes 
quickly and so reduce the fear of being sued that hangs over too many 
relationships in our society today.
  As we proceed with legal reform in the Senate, I would urge that we 
consider everyone's needs and interests--victims who should receive 
quick and fair settlements, consumers who should not have to pay higher 
prices or have their product choices and economic opportunity stifled 
by high legal costs, and members of our own communities, whom we should 
not be tearing apart through explosive rhetoric but rather bringing 
together in a spirit of trust and cooperation.
  Mr. President, I yield the floor.
  Mr. GRAHAM addressed the Chair.
  The ACTING PRESIDENT pro tempore. The Senator from Florida.
  Mr. GRAHAM. Mr. President, I believe under the order Senator Kohl was 
to speak at this time. I was to speak after Senator Kohl. I request the 
opportunity to speak at this time.
  The PRESIDING OFFICER (Mr. Gorton). Without objection, it is so 
ordered.

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