Statute of Repose Bill: Threat for North Carolina Businesses

Bills have been introduced in the North Carolina House and Senate that would more than double the amount of time during which products liability actions can be brought against manufacturers, as well as distributors and everyone else along the product chain from manufacturer to consumer.

Senate Bill 969, sponsored by Senator Janet Cowell, and House Bill 1343 sponsored by Reps. Glazier and Love, would severely damage North Carolina's competitive position as it would become one of three states with the longest period for filing product liability claims. Such a dramatic and unnecessary change would not only deter businesses from staying here, but would also serve as a disincentive for new businesses in deciding whether to come to our state.

Statutes of repose prevent manufacturers and others from being sued for something that was built, designed, or manufactured many years ago. A statute of repose recognizes that as products age, the responsibility for their operation should shift to those who exercise control over them, the consumers. It is unfair and unreasonable to hold a manufacturer liable for long-term use of a product as users should have an equal responsibility to ensure that the products and tools they use are safe and effective. Moreover, with reasonable limits on liability manufacturers will be able to devote more money to research and development to produce superior products instead of spending resources on lawsuit defense and insurance.

The North Carolina Chamber is committed to fighting this piece of legislation on behalf of North Carolina businesses of all sizes and sectors. To join our state Chamber in the fight against more than doubling the time period during which North Carolina manufacturers and other types of businesses can be sued for products liability, click here and join our legal reform coalition.

Background:
A statute of repose establishes a time period after which the producer of a good can no longer be held liable for the performance of a product. This statute is a legal recognition that products will eventually fail to perform as well as they did when they were new. The statute establishes that the owner of the product bears the responsibility for upkeep and routine maintenance.

North Carolina has benefited from one of the best statute of repose laws in the nation, allowing employers the confidence to produce and sell goods while also giving consumers ample opportunity to sue for harm caused by defective products. Currently, the law provides that all products liability actions must be brought within 6 years from the date of purchase, but now that legal standard is under attack. This bill would more than double the time period to 15 years, plus it would apply retroactively to cover purchases made since 1992.

The NC Academy of Trial Lawyers, the strongest supporter of these bills claim: "The statute of repose for products liability claims in North Carolina is only six years, the shortest in the country." This is untrue as Kentucky has a statute of repose of 5 years, measuring from the date of purchase, the same measurement as North Carolina's statute of repose. North Carolina companies benefit from the liability protection that our current pro-business statute of repose law provides and it creates incentives for businesses to choose North Carolina to manufacture their goods. The proposed bill would make North Carolina one of three states with the longest statute of repose in the country and it would give one of the longest in the southeast.

This bill is part of the growing national trend of increase in liability of employers. Nationwide tort liability has expanded over the past 30 years and the opportunity for lawsuits has increased, particularly in the area of product liability. While the tort system is needed to protect and compensate injured parties, the system in some respects has gone beyond its underlying purpose. The increase in lawsuits has caused businesses to be hit with excessive costs that lead to higher prices for consumers. As the Freedom Works organization stated: "While mailings clog mailboxes across the country, lawsuits pile up in courtroom dockets and consumers are faced with higher prices and fewer products in the marketplace. Lawsuits can destroy whole industries or keep vital products from making it to the market."

Our Chamber will continue its advocacy efforts to protect businesses from increased liability. We will fight legislation which will prevent us from making North Carolina the best place in the country to do business.