Before a 1996 Supreme Court ruling leads to compensating businesses that lost revenue from changes in the law, Congress should seek a clarification of the decision. The court’s action may cost taxpayers hundreds of billions of dollars.

A plurality of the court held in the Winstar case two years ago that the government in the 1980s first encouraged healthy thrifts to enter into contracts with federal agencies to acquire failed or failing savings associations, then in 1989 changed the rules with the result of rendering the healthy institutions undercapitalized and also vulnerable to failure. Some savings and loans, including the Winstar Corp., the Statesman Group and Glendale Federal, sued over the breach of contract between the banks and the government and won. The U.S. Court of Federal Claims is expected to decide by the end of the year how much they won. Speculation, according to the New York Times, sets the figure between $4 billion and $50 billion, depending on who is doing the speculating.

But that could be small change in the unconcluded savings-and-loan mess, which already has cost taxpayers $165 billion. More than 120 savings associations have cases scheduled over the next several months, and whether they go to court or settle, the government may wind up paying billions of dollars more. Still more disturbing, the Times reports that lawyers representing electric utilities, telecommunications companies and developers of low-income housing have also filed suit for business losses due to changes in federal law. Lawyers for the health-care industry may also sue.

The Winstar case turned on whether something called the unmistakability doctrine applied. That doctrine says the government can’t imply a waiver of sovereign power; it must declare it in a contract in unmistakable terms. Sovereign power allows the government to change laws, and the doctrine says it can do so without compensating all the contractors doing the government’s business. So, a Medicaid overhaul isn’t grounds for all health-care providers to sue.

In the Winstar case, however, the court decided the doctrine did not apply. It held the federal agencies involved had contracted to assume the risk of a loss if the laws changed unfavorably. Congress then reviewed the decision and, without debate, decided taxpayers, not the banking industry, would finance the cost of all judgments. Now, not surprisingly, many businesses that contract with the government want to know if there is money in this for them.

Congress should step into what could become a long and confusing ordeal and clarify when compensation is or is not due. It’s fiddling 15 years ago got the nation into the S&L disaster. It can’t pretend now that this is a matter merely for the court.