Michael P., a Representative in Congress from the State of Illinois: Opening statement 46 Gilbert, Charles E., Jr., president, Cincinnati Gilbert Machine Tool Co., on behalf of the Association for Manufacturing Technology: Prepared state- ment 49 Head, Patrick J., Esq., vice president and general counsel, FMC Corp.: Pre- pared statement 100 Heineman, Hon. Many believe this patchwork of over 50 separate State product liability laws is simply costing America too much. Thirty-four percent have deductibles or self-retentions averaging ,800.
Insurers know this and factor it into insurance premiums. My company, which has been in business for 101 years, must factor into its prices the risk of Htigation involving thousands of overage machines.
While we almost always "win" these law- suits, the litigation nevertheless results in unnecessarily high legal and transaction costs.
Although they were built decades ago to safety standards of their day and although they are likely to have passed through several owners — each of whom are likely to have made their own modifications to accommo- date their needs — they are sti U the subject of over one-half of our industry's law- suits and all of my company's lawsuits.
The committee met, pursuant to notice, at a.m., in room 2141, Rayburn House Office Building, Hon. But even real victims don't always get the relief they deserve under the current system. Premiums then stabilized and began a downward cycle, culminating 1992's "soft market," ticking up in 19. Ninety percent and more involve other types of cases.
Legal fees and transactional costs make up an esti- mated 50 to 70 percent of every dollar spent on liability litigation. The historical pattern over the last 20 years indicates that premiums swing wildly from year to year — but that each succeeding "valley" is higher than earlier "peaks." This swing syndrome will continue for so long as there is instability in the underly- ing tort law. Chairman, it is widely acknowledged that today's product liability system does not work. Although a U of Cin- cinnati Gilbert's claims involve older machines of lower technology, advances in high-tech products are slowed as a result. And tort cases have remained flat for the last 8 years, ac- tually declined the last 2 years.
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For that reason, I believe it is important that this committee, the House Judiciary Committee, consider this important matter. Only 0.36 of 1 percent of all civil cases, far less than the deaths and the injuries that are attributable to product causes in this country.