Tom LaSorda, Chrysler Group President and CEO, Appeals to U.S. Business, Government and Consumers to Support Legal Reform

- 'Legal Reform Is Critical for Creating a Competitive Business Environment and for Meeting the Global Business Challenge' - 'Litigation Lottery' System of Justice Costs America $246 Billion a Year - LaSorda Gives Four 'Common Sense' Suggestions On Ways to Fight Non- Value Added Costs of Unwarranted and Frivolous Lawsuits

CHICAGO, Feb. 9 -- Today, Chrysler Group President and CEO, Tom LaSorda said common sense could go a long way to improving the U.S. legal system at both state and federal levels. LaSorda urged U.S. business, government and consumers to support legal reform at The Economic Club of Chicago luncheon.

LaSorda acknowledged that "legal reform is critical for creating a competitive environment for business ... the out-of-control legal environment in which we operate today is a big drag on U.S.-based companies' competitiveness," said LaSorda.

Today's "litigation lottery" system of justice costs America $246 billion a year. According to the President's Council of Economic Advisors, one-half to two-thirds of that $246 billion price tag is a "tort tax" that's approaching nearly $1,000 per every man, woman and child every year. That's 2.23 percent of the nation's GDP, compared to less than one percent in countries like France, Japan and Canada. In efforts to fight meritless lawsuits, LaSorda outlined four "Common Sense" suggestions that would allow business to improve competitiveness and fight non-value added costs of unwarranted or frivolous lawsuits.

"First, in tort cases we need to allow witnesses to tell the full story, so that juries can hear it," said LaSorda. "Product liability laws in the majority of states actually compel witnesses to tell the 'partial truth,' and thus prohibit juries from hearing the 'whole truth.'"

Thirty-two states do not allow jurors to consider a plaintiff's seatbelt use in assessing damages -- even though wearing seat belts is required by law in those states.

"Second, we need to set some reasonable and fair limits on damages in product liability cases," said LaSorda. LaSorda cited a previous legal case in which DaimlerChrysler was hit with more than $50 million in compensatory and punitive damages. A driver of a minivan was killed by blunt force trauma to the back of the head caused by an unbelted rear passenger. The driver of the other vehicle, a seventeen year-old who fell asleep behind the wheel, was not sued.

According to a recent study, only a minority of total costs goes toward compensating the injured plaintiff: 14 percent of the costs go to defending claims, 19 percent are spent on plaintiff attorney fees, 21 percent goes toward administering costs, and only 46 percent of the costs associated with tort liability are given to the plaintiff to compensate them for their injuries. According to LaSorda, "We need a system that first assesses realistic economic damages, and then sets reasonable limits on other damages."

"Third, we must stop punishing responsible companies for meeting or exceeding federal safety and regulatory standards," said LaSorda. "If there is a clear product or safety reason for making changes, we aren't going to back down because of the threat of lawsuits ... But the threat of product liability creates a huge disincentive for the self critical evaluation of the features on current and past vehicles. A promising proposal could also become a nightmare -- if it is taken out of context in a lawsuit."

Fourth, LaSorda called on businesses to pursue legal reform and eradicate what the American Tort Reform Association has called "the judicial hellholes" in this country. Many states including Mississippi, Texas, South Carolina, Georgia, Ohio and Michigan have recognized that legal reform is a critical element in business, and have enacted civil legal reforms to improve their systems.

In closing, LaSorda encouraged business leaders to "exercise some common sense ... do not pay the form of blackmail that settlements too often take. As more and more companies begin to fight back, we can and will make a difference. In the process, we'll regain a competitive advantage."

NOTE TO EDITORS: Additional information and news from DaimlerChrysler is available on the Internet at: http://www.media.daimlerchrysler.com .