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Executive Summary

PRODUCT LIABILITY COMPENSATION CLAIM MAY BE EXTENDED TO ANY MFR. of a product identical to the product causing harm under draft legislation prepared by Sen. Danforth's (R-Mo.) Commerce Cmte. Danforth's "Product Liability Voluntary Claims and Uniform Standards Act," released July 15, states that any person seeking to recover for toxic harm caused by a product "may, where it is not possible for such person to identify the mfr., submit a product liability compensation claim. . .to any mfr. of a product that is in all relevant respects identical to the product which caused the claimant toxic harm if that mfr.'s product was available at the time when, and in the market in which, the product which caused the claimant's toxic harm was purchased." Sen. Danforth's bill is an entirely new piece of legislation on product liability that offers a somewhat different approach to the issue than Sen. Kasten's Product Liability Act and amendments by Sens. Dodd (D-Conn.) and Gorton (R-Wash.). Danforth has been active in Senate consideration of product liability reform. At a March hearing on Kasten's bill, he recommended that product liability be tied to a victim compensation system ("The Pink Sheet" April 1, T&G-7). In a press release on his proposal, Danforth stated that "product liability reform requires both uniform federal standards and the establishment of an alternative claim system." He said his draft "combines both elements, but is only a first draft. It is a point of departure, intended to focus attention on the concerns that have been raised about the deficiencies of the existing product liability system, and to promote further discussion and study by all those interested in product liability reform." Under the bill, a mfr. would also be able to share the fault of product injury with another. "Any mfr. who has paid an expedited claim for harm caused by a product. . .may seek and obtain contribution, reimbursement or indemnity on the basis of comparative fault from any other person (other than the claimant's employer or fellow employee) whose failure to exercise reasonable care was a proximate cause of the injury complained of by the claimant," the bill states. The legislation sets a limit for amount of compensatory damages, specifying that the court shall "award exemplary damages in an amount not to exceed twice the amount of the claimant's net economic loss for which the mfr. is liable, or $10,000, whichever is greater." In addition, if, after a mfr. has acknowledged liability or been determined to be liable, the claimant incurs additional net economic loss arising from the same harm, the claimant may submit supplemental expedited claims for net economic loss. With regard to punitive damages, the bill states that they may be awarded "to any claimant who establishes by clear and convincing evidence that the harm suffered was the result of conduct manifesting a mfr.'s or product seller's conscious, flagrant indifference to the safety of those persons who might be harmed by a product." The biil adds that with the exception of a civil action in which the alleged harm to the claimant is death, "punitive damages may not be awarded in the absence of a compensatory award." The legislation also establishes a Natl. Toxic Health Effects Panel to be composed of nine members appointed by the Secty. of HHS from candidates nominated by the Director of the Natl. Science Foundation. The bill states that the panel shall issue guidance in processing claims for toxic harms, determine whether exposure to a product in a particular dose and composition significantly increases the risk of toxic harm, and may review previously determined claims at the request of the claimant.

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