The General Aviation Revitalization Act of 1994: An Overview of Tort Reform

The aviation industry, not yet a century old, has developed into one of the most robust, visible, and analyzed industries in the world today. Despite its youth, aviation is a sizable industry, employing an estimated nearly 2.5 million people (NewMyer, Kaps & Sharp, 1997), and generating $75 billion of economic activity in the United States (Kane, 1996). Its size, its importance in our society, and, unfortunately, the occasional mishap that occurs in aviation, cause the industry to be constantly in the public eye. One can hardly watch the evening news or read a newspaper and not be exposed to a story involving aviation. Ever present media coverage includes such topics as mergers, rightsizing, bankruptcy, new aircraft and technologies, economic news, crashes, near misses, and legal actions. The latter of these, legal actions, are not unique to the aviation industry, but one type of legal action, product liability claims against manufacturers, were having a crippling effect on an important segment of aviation -- general aviation, according to Jack Olcott, president of the National Business Aircraft Association ( Statement of John W. Olcott, 1993). To address this phenomenon, the General Aviation Revitalization Act of 1994 (GARA) was signed into law on August 17, 1994. GARA is a federal statute of repose designed to protect aircraft manufacturers from the uncertainties and costs associated with what has been termed long tail liability (Darwin, 1996). This paper will attempt to define the key terms, provide some background of the general aviation industry and the problem the law was designed to correct, explain the specifics of the law -- what it does and does not do, and consider the effect of the law since its passage nearly four years ago