Product Liability: Extent of 'Litigation Explosion' in Federal Courts Questioned

摘要

The recent crisis in the availability and affordability of liability insurance has sparked debate over (1) the nature and extent of growth in product liability cases field in federal courts (in this report, U.S. District Courts) and (2) the significance of that growth for insurers and policymakers. In 1985, property and casualty insurance premiums increased dramatically; commercial general liability insurance, especially the product liability component, was one of the types of property and casualty insurance most affected by cost increases. There were sharp reductions in the amount of available coverage for some product areas, and premium increases were so dramatic (for example, as much as 1,000 percent or more) that some business could no longer afford them. Insurers justified rate increases, in part, as a response to a rapid growth in losses resulting from increases in the number of product liability suits and the size of awards given in those suits. At the request of the Chairman, Subcommittee on Commerce, Consumer Protection and Competitiveness, House Committee on Energy and Commerce, we have examined growth in product liability cases field in federal courts since 1974. The Chairman was especially concerned with (1) the particular types of cases that were increasing in number and (2) the pattern of growth for products other than those that have been the subject of a significant amount of litigation, such as asbestos.