Congress moves to ground the legal eagles

FROM RUPERT CORNWELL

in Washington

Bulldozing aside objections from lawyers, consumer groups and the White House, the Republican-controlled House of Representatives was yesterday set to complete approval of a massive shake-up of US civil law that would curb product liability and punitive damages awards and make losers pay winners' costs in so-called "frivolous" lawsuits.

The third and last of a trio of bills fulfilling another pledge of the Republicans' "Contract with America" is the Common Sense Product Liability and Legal Reform Act, imposing a $250,000 (£150,000) ceiling both on punitive damages in most federal and state civil lawsuits, and on the "pain and suffering" component of medical malpractice suits - a step vainly sought for years by doctors' groups.

And in what consumer advocates claim is a cave-in to big business, the new measure says punitive damages can only be awarded against a company if "clear and convincing evidence" exists of "conscious and flagrant" indifference to the safety of consumers. There is also to be a statute of limitations whereby manufacturers cannot be sued more than 15 years after the launch of a product.

Earlier this week the House endorsed other bills designed to rein in Americans' propensity to litigate. One, passed by a broadly bipartisan majority of 325 to 99 votes, limits the ability of shareholders and investors to sue companies and brokers when they lose money, while the second, approved by a 232-193 vote along party lines, introduces a modified "loser pays" system. Known as the English Rule, this provision is intended by supporters to curb frivolous lawsuits, and encourage earlier and less costly out- of-court settlements. But trial lawyers and consumer groups object, saying it places litigants of modest means at an immense disadvantage and will prevent many worthy cases from being pursued at all.

What happens next is far from clear. The whole issue of legal reform now goes to the Senate, which is far more dilatory in its habits and where the Democrats, who by and large favour the status quo, have the 40 votes needed to mount a filibuster. Whatever does emerge must then be reconciled with this week's House legislation and finally go to President Bill Clinton for signature. He has served notice that he will veto the bill in anything like its present form.

No less formidable an obstacle will be the Trial Lawyers' Association - with strong professional ties to the current administration. Lawyers' groups have been a rich source of political funds for Democratic candidates.

Underlying everything is the ambiguity of the public. Polls place lawyers among the least-loved of professionals but America supports 800,000 of them and they are still widely seen as a path to quick riches.

No area better typifies this contradictory attitude than medical malpractice. Overwhelmingly, Americans believe that malpractice awards are excessive and that malpractice insurance is a main reason why doctors' fees are so high. On the other hand, they insist on their own unfettered right to sue. "Injured and maybe butchered in surgery - the physician could even be drunk - but you are limited to $250,000 for non-economic damages," Henry Waxman, Democratic Congressman from California and an arch-foe of the medical lobby, said in disgust yesterday.