Although hailed by insurance groups, the measure drew fire from a consumer group, which said it would make it more difficult for injury and fraud victims to seek redress.

The president, during a signing ceremony at the White House, said, "By working together over several years, we have agreed on a practical way to begin restoring common sense and balance to America's legal system.

"The Class-Action Fairness Act of 2005 marks a critical step toward ending the lawsuit culture in our country. The bill will ease the needless burden of litigation on every American worker, business and family. By beginning the important work of legal reform, we are meeting our duty to solve problems now, and not to pass them on to future generations."

The newly signed law is designed to prevent abuses in the class action system, such as "venue shopping," by making it easier to remove class action cases to the federal court system. Additionally, the law increases judicial oversight of settlements, most notably "coupon settlements" in which class members receive coupons instead of a monetary settlement.

Mr. Bush said, "The bill requires judges to consider the real monetary value of coupons and discounts, so that victims can count on true compensation for their injuries. It demands settlements and rulings to be explained in plain English, so that class members understand their full rights."

Versions of the bill have been passed by the House several times in recent years, only to fall short in the Senate. Most notably, a motion to limit debate on the bill, and thus prevent a filibuster, fell one vote short during 2004, with several Democrats coming out afterward offering to vote for the bill if their needs were addressed.

Class action tort reform has been a key priority for the insurance industry, which hailed the measure's signing into law.

"President Bush's signature puts class action reform across the finish line, making winners of businesses held hostage by frivolous lawsuits and consumers who have received nothing more than worthless settlement coupons," said Melissa Shelk, vice president of federal affairs for the American Insurance Association.

Others praising the new law and praising Mr. Bush included Wendy Baker, President of Lloyd's America, who said her organization welcomed "passage of this bill. It is an important step in the drive for reform of a tort system that negatively impacts the U.S. economy. This is a positive first step that will help businesses grow and develop without the constant fear of frivolous litigation."

Opponents of the bill, however, continued to object, claiming that it is anti-consumer and will limit access to the justice system.

Rachel Weintraub, assistant general counsel for the Consumer Federation of America, said, "While purporting to curtail 'class action abuses,' S. 5 virtually wipes out state class actions, thereby removing what is sometimes the only venue for redress of injury or fraud for consumers.

"The bill makes it more difficult for consumers to obtain effective and efficient judicial relief for injuries, for example, caused by defective products, fraud in the marketplace, or discrimination. The jurisdictional changes mandated by S. 5 are designed solely to impede class actions, not to make them fairer or more efficient."