Some small-business owners say they fear that a lawsuit against them will put them out of business.
A bipartisan bill introduced in the House of Representatives Monday by Reps. Steve Chabot, an Ohio Republican, and Ken Lucas, a Northern Kentucky Democrat, is intended to reduce their potential liability in such suits.
The three parts of the Small Business Liability Reform Act include:
• A cap on punitive damages for businesses with fewer than 25 employees. The cap would be the lesser of three times compensatory damages or $250,000. The legislation would encourage businesses to go to court because damages would be restricted.
• Abolishing joint liability for non-economic damages for businesses with fewer than 25 employees. The reform act would allow small-business owners to be responsible only for their share of the fault.
• Protection of non-manufacturing-product sellers from liability when the manufacturer is at fault for the harm.
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The legislation has critics, who say relieving liability for small businesses leaves them no incentive to protect consumers.
"The law imposes responsibilities on sellers of dangerous products. All companies involved need to be held responsible so consumers are not purchasing things that could hurt their families," Joanne Doroshow, executive director of a New York consumer rights group, the Center for Justice and Democracy, said.
"If they've engaged in reckless behavior, they need to be held accountable like anybody else."
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