Tort Reform 1985
A Fort Lauderdale patent attorney is pressing for legislation to protect small computer software companies from excessive liability judgments that can put them out of business. Software development is America's foremost edge in world trade. said Rick Martin. a member of the Oltman and Flynn law firm. But costly lawsuits involving companies too small to pay damages — or premiums for insurance that will are jeopardizing that edge. "A person shouldn't be able to become an investor because he became a victim," said Martin, who thinks there should be a limit to liability awards, perhaps $200,000 as a cap.
As it is today, too many good guys on juries are playing "queen for a day" giving somebody else's money away to the injured party, he says, noting that Proposition 9, a ballot proposal to limit liability awards in certain medical cases was withdrawn before last year's Florida election.
Martin wrote his Nova Law School thesis on the dangers to American entrepreneurs from unrestricted warranty and product liability judgments for the computer software and service industry.
He has corresponded with both the U.S. Senate Subcommittee on Consumer Affairs and the Florida Senate about writing a new law that would declare software programs to be services instead of products.
That would mean a suit could only cite negligence if something goes wrong, rather than the unlimited cash awards a jury could provide under product liability law.
Martin models his proposed legislation on a statute already on the law books of Florida and 43 other states that declares blood a service instead of a product.
Consequently, if someone is injured through receiving a blood transfusion, the issue can only be a question of neglect, not that there may have been something wrong with the blood to begin with, he said.
Last year, Florida's 1969 blood law was amended to add tissue and organs, Martin said.
“We really need a national law about software product liability, but a good start would be for a state like Florida to wake up to the problem," Martin argued.
Recently, California passed a stringent new lawmaking software companies more liable for their products.
Thus it is easier for a software company, such as those small shops proliferating in South Florida, to find itself devastated by enormous cash awards if something goes wrong with a program it creates.
Martin graduated from Nova Law School last year. Before starting his studies there, he worked for years marketing IBM computer equipment, and then started his own business helping software vendors market their work.
Software development is America's foremost technological edge in world trade, he said. Even though your personal computer may be manufactured in Japan, the software making it work was written in America.
And with the increasing sophistication and ease of using computer program languages, today a comparative amateur can take something like dBASE III (a popular database management system) and write a totally new program with it. That sort of initiative was impossible in the days when a person had to be trained to understand, use and write programs with the older computer lan guages such as Cobol.
Consequently more people are writing software and selling it today. But with these small companies in dan ger of devastating lawsuits in view of the growing trend of product liability judgments, something has to be done to protect them, Martin added.
Imagine that Grandma decided to write a software program based on her recipe for cookies, Martin writes in his thesis.
But something goes wrong when it is used and a child is hurt eating a cookie.
The child sues and naturally the jury provides a large award to the innocent victim. But that bankrupts grandma. Do we really want to economically destroy grandma? he asked.
“Let's declare by statute that software is a service,” he recommended.