Chorus of Reformers Adds New Pitch Tort Critics Now Focus on Limiting Damages and Establishing Clear Guidelines for Product-Liability Cases Series: BUSINESS GOES TO COURT. Part One of a 2-Part Series. Second of 5 Articles Appearing Today

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DAN QUAYLE may be gone from the political scene but one of his favorite issues - reforming the nation's legal system - remains on the front-burner.

Much of the action recently has been on the state level. With King Kong-sized medical-malpractice and product-liability judgments getting wide publicity, most legislatures have passed some form of "tort reform" since the late 1980s.

More than two dozen states have changed "joint and several liability" rules, which have been used to force wealthy plaintiffs who were only minimally responsible for some harm to pay almost all of the jury award. Another 21 states have changed the "collateral source" rule, which says that juries may not consider evidence that a plaintiff's losses have been compensated from another source.

Since the 1980s, the focus of the tort-reform movement has shifted to other concerns: limiting awards for punitive and noneconomic damages; reining in medical-malpractice judgments; limiting the testimony of "expert" witnesses; and establishing clear guidelines for product-liability cases.

Despite stiff opposition from trial lawyers and self-styled consumer groups like Ralph Nader's Public Citizen, the business-backed tort-reform movement persuaded several more states - Arizona, Mississippi, North Dakota, and Texas - to jump on the bandwagon last year.

This year, state legislators in New Jersey are expected to pass a major tort-reform package, while Massachusetts lawmakers appear set to approve a product-liability law. Battles may also be brewing in many other states, including California, one of the biggest centers of personal-injury litigation.

What accounts for the relative success of the tort-reform movement?

Obviously, it received a big boost from former Vice President Quayle, who made lawyer-bashing a big part of the 1992 presidential campaign. But tort reform may actually be seeing more success since Quayle left office, because the issue now carries fewer partisan overtones for Democratic legislators.

Opponents of legal reform credit the business community, led by the American Tort Reform Association (ATRA) in Washington, for mounting a successful public relations campaign across the country to convince most people that the legal system is in need of fundamental repair.

"They've made a real dent," says Barry Nace, president of the Association of Trial Lawyers of America (ATLA). "If you keep saying something loud enough, sooner or later people will believe you."

ATRA's message has been boiled down to a slogan - "Lawsuit Abuse! Guess who picks up the tab?" - that has appeared on print advertisements, TV commercials, and bumper stickers. The group has even posted its ads aboard buses and subways in several cities, including Philadelphia and Fort Lauderdale, Fla., which, those transit systems say, has led to a drop in claims against them.

Perhaps the most effective tactic of the tort-reform forces has been "deep lobbying" - attempts to change the political climate, not to pass specific legislation. Business groups have paid for studies and books outlining the high cost to the economy of runaway litigation. Two of the most successful pro-reform books were written by Peter Huber and Walter Olson, fellows of the free-market Manhattan Institute in New York. Thanks in part to their efforts, public opinion surveys show most Americans now favor overhauling the legal system.

But while the tort-reform movement has enjoyed success at the state level and among the public, it has been stymied in Congress. A major reason why is the political power of ATLA, the trial lawyers' lobby. In the 1991-92 campaign cycle, for instance, ATLA gave a whopping $2.4 million to candidates for federal office, 90 percent going to Democrats.

While that giving pales against the contributions of the business community, ATLA has a key advantage over its adversaries: Large corporations and their trade associations are concerned with a variety of issues. …