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The legislation that passed both houses of Congress would have capped punitive damages and eliminated joint and several liability, which he called “an anachronism.”
Under this doctrine any manufacturer, no matter how remote from the product in question, is still liable, especially if it has deep pockets. The reform seeks more “proportionality” in assessing liability.
“You are on the winning side of the ‘joint and several’ liability question. There is no moral defense of it,” Hutchinson said.
But the President vetoed the proposal, and the current Congress hasn’t resurrected it, choosing instead to lay a “foundation” to get it passed after the election. Lawmakers have been unable to find a compromise with the White House.
Y2K liabilityIn the meantime, broad-based tort reform may get a boost from the more narrowly focused Y2K liability legislation now working its way through the Congress, he said.
The possible turn-of-the-century computer problem could result in a “litigation explosion,” affecting millions of small businesses and potentially bottling up the weekly paychecks of 7 million employees.
The Y2K reform would limit punitive damages to $250,000 or three times actual damages, whichever is greater, and would encourage an “alternative dispute resolution,” with a 90-day pretrial notice that would enable the defendant to fix the problem.
“As a lawyer myself, I believe we need to have reasonable punitive damages, and reasonable caps. I have tried cases both as a defendant and as a plaintiff,” he said.
But even this reform has some problems for businesses and the manufacturing sector, he cautioned. Makers of furnaces who have problems arising from the malfunction of their vendors’ computers may find themselves as plaintiffs — and as defendants.
“You might want to sue your supplier,” Hutchinson said. Pretrial notice might delay a quick resolution of the problem.
One key reform would raise the hurdle for class action litigation, making it more difficult for plaintiff attorneys to round up complainants and “shop” for a favorable state court. Federal courts have higher standards eligibility for class action lawsuits.
Another concern is the attempt to incorporate a “wish list” of elements in any tort reform legislation. He cited a proposal to change the burden of proof standard from the “preponderance of evidence” to “a clear and convincing” standard.