May 1, 1995 CONGRESSIONAL RECORD — SENATE S5859

provides for lawyer’s fees for the economic damages suffered. So a lawyer

can recover either 33 percent of the

first $150,000 and 25 percent of everything thereafter with no limit for the

economic damages. So you can have a

very large attorney fee just for the economic damage component of a lawsuit.

Then you have the noneconomic

damage component. This is the pain

and suffering that is supposed to go to

the person who suffered the pain and

suffering. All we say in my amendment

is that the lawyer would be entitled to

no more than 25 percent of the first

$250,000 of that pain and suffering. So

that is an additional up to $60,000-plus

in attorney’s fees for the pain and suffering component of the suit.

Then, if it is a suit in which punitive

damages are sought and the lawyer believes that he should be entitled to a

percentage of that as well, he may petition the court to have a percentage of

the punitive damage award. The court

would have to make that award based

on what is reasonable and ethical. It

should be based upon the amount of

time the attorney put in; 25 percent

would be presumed to be a reasonable

fee but all of this is up to the court.

So you see, this is a limitation but it

is a limitation which will enable attorneys to receive multithousands and

tens of thousands and even hundreds of

thousands of dollars in fees for the

kind of case that would warrant it. So

there is no question there would be an

incentive for anybody who has a

claim—be it a little claim or a larger

claim—to have that case brought to

trial because a lawyer would have an

incentive to do so. But what it provides

is a cap so the lawyer does not have a

lottery here, so the lawyer does not

have an incentive to bring these cases

just to see if that lawyer can hit the

jackpot and earn literally hundreds

and hundreds of thousands of dollars or

millions of dollars in attorney’s fees

when we think that money should go to

the plaintiff or the claimant, the victim in the case. That is what it is all

about. We are going to be voting on

that shortly after 11 o’clock tomorrow

morning.

I just urge all of my colleagues to

view this issue in the light of what is

best for the claimant, for the plaintiff,

the injured party, and to view it in the

light of what is best for the American

people, who are paying a very large

sum of money so that a lot of lawyers

can get very rich. As I say, some people

criticize this as not being tough

enough on the lawyers. That is not

what we are here for. We are not here

to bash lawyers, but to put a cap on the

big bonanza kind of recovery that we

have all been reading about.

Finally, I want to take a minute to

say that at shortly after noon, I will be

offering a second amendment. This is

an amendment which will put a cap on

the noneconomic damages—so-called

pain and suffering—in these medical

malpractice cases. It will put a cap of

$500,000 on these medical malpractice

cases.

A lot of our colleagues have said the

cap discussed earlier—a quarter of a

million dollars—is just not quite big

enough for that really exceptional

case. In response to that, I think a lot

of people have said, ‘‘OK. We will provide for up to half a million dollars.’’

Bear in mind that this is after the economic damages—after all of the bills

have been paid, after all of the economic losses have been accounted for—

there is the pain and suffering part of

it. It does not relate to the punitive

damages. There will be a different kind

of treatment for that. This is just to

say with respect to that noneconomic

damage component, there will be a cap

of half a million dollars.

So I will be proposing that amendment and asking support from my colleagues for that amendment, as well.

Mr. President, I yield the floor.

EXHIBIT 1

[From the Los Angeles Times, Apr. 27, 1995

IGNORE THE LAWYERS, HELP THE PEOPLE

(By Bob Dole)

During the current Senate debate over

legal reform, you will hear from the trial

lawyers and their allies that legal reform is

nothing more than a boost to big business.

But the facts suggest otherwise. Who is

hurt by lawsuit abuse? It’s the little guy, according to recent surveys by the National

Federation of Independent Businesses in

Texas and Tennessee, which found that onethird to one-half of small businesses have

been sued or been threatened with suit for

punitive damages. Because of this kind of

lawsuit abuse, the Washington-area Girl

Scout council must sell 87,000 boxes of cookies each year just to pay for liability insurance, and the average local Little League’s

liability insurance jumped 1,000% in a recent

five-year period. These are just a few examples of a problem that is big and getting bigger.

Who profits from lawsuit abuse? The trial

lawyers.

As the Senate considers legislation to reform lawsuit abuses, the buzzing sound you

hear is the trial lawyers swarming to the defense of their hive of honey: The lawsuit lottery.

This picture, needless to say, is not the one

trial lawyers would paint. According to

them, they are the best (perhaps only)

friends of the poor, consumers and women.

They have one of the most effective publicrelations efforts going. It is a costly exercise, characterized by millions in contributions to politicians and judges. Now they are

mounting a $20-million campaign to stop

lawsuit reform in the U.S. Senate.

Why? Lost in the fog of propaganda is a

fact well-understood by most Americans: Our

legal system costs too much for everybody

(except the trial lawyers) and has turned

into a lottery where even the threat of outrageous damages with little or no connection

to fault extorts money and time from charitable organizations, small businesses, blood

banks and volunteer groups. But, like any effective gambling operation, the house always

wins. And the house in this case is the trial

lawyers and the system they so ardently defend.

We need a system that ensures that those

harmed by someone else’s wrongful conduct

are compensated fully. And we need to ensure that the system is not twisted in ways

that deter folks from engaging in activities

that we ought to encourage. That’s why I

have offered an amendment that would extend the protections against outrageous punitive damages now being considered for

manufacturers to include volunteer and

charitable organizations, small businesses

and local governments.

These reforms are an attempt to restore

fairness and integrity to a system that has

gone awry. But, given the distortions from

the trial-lawyer lobby, it is clearly time to

confront a few of their most cherished

myths.

Myth No. 1: Trial lawyers protect consumers.

The California Trial Layers Assn. recently

changed its name to the Consumer Attorneys

of California. Some consumer Attorneys of

California. Some consumer champions.

Across the nation, abusive lawsuits drive up

the costs of all kinds of goods. As noted by

the American Tort Reform Assn., half of the

cost of a $200 football helmet goes to lawsuitdriven liability insurance.

Myth No. 2: Trial lawyers protect workers and

the poor. The current system victimizes no

group more than the working poor and the

disadvantaged. Lawsuit add a $1,200 litigation tax on every consumer in America.

Meanwhile, some trial lawyers through

contingency fees effectively earn $300,000 per

hour.

The poor also pay in jobs. A RAND Corp.

study estimates that wrongful termination

suits have reduced the hiring levels in just

one state by as many as 650,000 jobs.

Myth No. 3: Trial lawyers are champions of

safety. Personal injury lawyers put out literature informing us that Americans live in

the safest society in the world because of our

civil justice system. The reality is that our

legal system long ago crossed a critical

threshold: It often makes our daily lives less

safe. Lawsuits not only stop pharmaceutical

research and new drugs. They cause industrial engineers to avoid safety improvements

for fear that current designs, by comparison,

will be interpreted as defective. They make

all organizations fearful of the new—because

in the hands of personal injury lawyers,

‘‘new and improved’’ has come to mean ‘‘new

and open season for lawsuits.’’

Part of our heritage as a free people is a

legal system where justice, not the search

for a windfall, is the goal. Over the past 40

years, we have strayed from that path. The

powerful trial-lawyer lobby must not be allowed to kill reform with a campaign of

disinformation, distortion and delay. I am

determined that this is the year that civiljustice reform will pass the Senate.

Mr. GRAMS addressed the Chair.

The PRESIDING OFFICER. Under

the previous order, the Senator from

Minnesota [Mr. GRAMS] is recognized to

speak for up to 15 minutes.

The Senator from Minnesota is recognized.

Mr. GRAMS. Thank you very much,

Mr. President.

MEDICAL MALPRACTICE REFORM

PRODUCT LIABILITY AND

fMr. GRAMS. Mr. President, I think

most Senators would agree that health

care reform was the most important

piece of legislation we debated during

the 103d Congress.

Throughout the health care debate,

we heard from people here in Washington and across the Nation, and we

learned what they valued most about

our Nation’s health care system. We
S5860 CONGRESSIONAL RECORD — SENATE May 1, 1995

also heard their suggestions as to how

the current system should be changed.

Fortunately, we also learned that the

majority of Americans did not agree

with the President’s plan to turn the

entire health care system over to the

Federal Government.

But, while most Americans adamantly rejected his radical approach to

health care reform, we also found tremendous support for reasonable and

sensible reforms which will immediately improve our health care system.

In particular, we learned that the

American people overwhelmingly believe we need to dramatically reshape

our Nation’s medical malpractice system.

Recent polls continue to show strong

support for liability reform.

Eighty-three percent of Americans

believe that the present liability system has problems and should be improved.

Eighty-nine percent believe that too

many lawsuits are being filed in America today; and

Sixty-seven percent of American voters agree with the statement that ‘‘I

am afraid that one day I, or someone in

my family, will be the victim of a lawsuit.’’

Some of my colleagues might ask,

why we are discussing medical malpractice reform during the product liability debate? Simple: many of the

same problems facing American manufacturers also affect our doctors and

health care providers.

During the last two decades, there

has been an explosion of litigation that

has saddled the health care industry

with substantial costs wholly unrelated to providing medical care and

services.

While I stand behind the right of

every individual to right a wrong

through the judicial system, this litigation bonanza does nothing to improve patient care or improve service

delivery. It simply encourages frivolous lawsuits by creating an environment which is weighted in favor of the

plaintiff’s bar and against the world’s

best health care system.

Second, this ever-increasing tide of

litigation has forced a large number of

physicians to practice defensive medicine to protect themselves from lawsuits. This practice passes along greater costs to patients and insurers.

Lewin-VHI conducted a study in 1993,

and discovered that the U.S. health

care delivery system could save up to

$76.2 billion over 5 years by eliminating

defensive medicine practices.

Taxpayers also feel the pain of defensive medicine in their checkbooks

since the physicians who treat America’s poor and elderly are forced to practice defensive medicine which increases

the costs of the Medicare and Medicaid

Programs.

Defensive medicine is a drain on our

Federal budget, and one we cannot afford.

In 1991, medical liability premiums

for hospitals and physicians totaled

$9.2 billion.

The current system has had a

chilling effect on the ability of patients to access their doctors—especially those who live in rural areas.

For example, 70 percent of all obgyns will be sued during their careers.

Many have decided to no longer offer

obstetric services to their patients for

fear of lawsuits. And obstetricians continue to pay the highest premiums of

all health care providers.

From the standpoint of the victims,

even when a lawsuit is justified and

reasonable, they are often forced to

wait up to 5 years between the time

their injury occurred and the time they

are compensated, under our current

system.

More often than not, attorneys will

only litigate cases with high award potentials, which tends to discourage attorneys from settling the cases early.

Finally, and perhaps most troubling,

the medical malpractice system has

placed a wedge between doctors and

their patients; it undermines the mutual trust which is essential to the doctor-patient relationship.

Last year, after the relevant House

committees failed to address medical

malpractice reform, I introduced legislation very similar to the amendment

offered today by Senators MCCONNELL,

KASSEBAUM, and LIEBERMAN.

With this amendment, the Senate has

the opportunity to do what the American people want—reform the system.

This amendment would do that by:

Ensuring full recovery for economic

and noneconomic damages including

lost wages, as well as compensation for

pain and suffering;

Providing alternative dispute resolution;

Establishing the use of the collateral

source rule;

Abolishing joint liability; and

Requiring periodic payment of future

damage awards.

These reforms are the first steps toward addressing the failure of our medical malpractice system.

I came to the floor today to reaffirm

my support for sensible improvements

to our badly broken medical malpractice system. As many of my colleagues have noted—Democrats and

Republicans alike—our current system

is costly, slow, inequitable, and unpredictable. Our system has failed hospitals, doctors, and ultimately, it has

failed its patients. The American people deserve better.

While this amendment has my full

support and I recognize the many hours

of hard work my colleagues spent on

this legislation, I believe we should go

further.

I strongly encourage the Senate to

include the $250,000 cap on noneconomic damages.

In addition, we should extend protection to the manufacturers of medical

devices by eliminating punitive damage awards if the device has received

FDA approval.

According to Medical Alley, a coalition of Minnesota’s entire health care

industry, ‘‘the current liability system

has a negative effect on health care

product innovation.’’

They cite the fact that innovative

products are not being developed,

which has reduced our ability to compete in worldwide markets.

I urge my colleagues to ensure that

significant changes are implemented.

However, if the Congress and the President fail to secure fundamental reforms to our liability system, I will

move forward and introduce legislation

which will address the concerns of so

many American doctors, consumers,

and patients alike.

Mr. President, our medical malpractice system is in critical condition,

but it is not too late to save it. The

American people are demanding reform

and the Senate must deliver.

We need a system that meets the

needs of all Americans, not just the

plaintiffs’ bar. I believe this amendment is the prescription we have been

looking for to cure this problem.

Thank you, and I yield the floor.

I suggest the absence of a quorum.

The PRESIDING OFFICER. The

clerk will call the roll.

The assistant legislative clerk proceeded to call the roll.

Mr. GORTON. Mr. President, I ask

unanimous consent that the order for

the quorum call be rescinded.

The PRESIDING OFFICER. Without

objection, it is so ordered.

fTAIWAN

Mr. THOMAS. Mr. President, as the

chairman of the Subcommittee on East

Asian and Pacific Affairs, I would like

to share with my colleagues some developments concerning Taiwan which

arose over the April recess.

As my friends are well aware, the

State Department has for several years

now prohibited the President of the Republic of China on Taiwan, Dr. Lee

Teng-hui, from entering the United

States. This prohibition extends not

only to visits in his capacity as President, but to any visit even as a private

citizen. The official rationale for this

is that such a visit would offend the

sensitivities of the Government of the

People’s Republic of China, which lays

claim to Taiwan as a renegade province.

This stance is troublesome to me and

many other Senators for several reasons. First, Taiwan has been our close

friend and ally for several decades, and

is presently our fifth largest trading

partner. It is a moldel emerging democracy in an area not particularly

known for strong democratic traditions. Regardless of these facts, however, we reward the Government of

Taiwan by denying its elected officials

even the most basic right to visit our

country. The State Department policy

has previously even been raised to the