Product Liability and Innovation Managing Risk in an Uncertain Environment (1994) / Chapter Skim
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Junk Science in the Courtroom: The Impact on Innovation
Junk Science in the Courtroom: The Impact on Innovation
Pages 138-150
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From page 138... ...
The result has been a sharp increase in demand for liability insurance, but a marked decline in supply. The most dramatic adjustment came in the early 1980s, with an insurance crisis eerily reminiscent of the endless gas lines during the Arab oil embargo.
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From page 139... ...
A reasonably predictable and quick clock on insurance claims also allows the insurer to identify better and worse risks. It will not do to sell liability insurance at a flat price to all comers for 20 years, and only then discover that some in the group are careful and others (as finally judged by the tort system)
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From page 140... ...
might be causing 25 cases a year of serious brain damage.2 American lawyers responded with an avalanche of litigation, blaming the vaccine for brain damage, unexplained coma, Reye's syndrome, epilepsy, sudden infant death, and countless other afflictions.3 Horrified pharmaceutical companies bailed out, and at one point it appeared that the last U.S. manufacturer of the product would be leaving the market.4 More solid scientific evidence slowly accumulated.5 Then, in March 1990, a report of a huge study of 230,000 children and 713,000 immunizations concluded that the vaccine had caused no serious neurological complications of any kind, and no deaths.6 "It is time for the myth of pertussis vaccine encephalopathy to end," declared an editorial in the Journal of the American Medical Association.
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From page 141... ...
was not equipped with a radio, Judge Learned Hand sonorously declared that "in most cases, reasonable prudence is in fact common prudence; but strictly it is never its measure."~° A court may thus require tugboat operators or doctors to surpass even accepted industry standards and consensus norms of the profession. From 1923 until the mid-1970s, the Frye rule made some attempt to hold expert witnesses to similar standards (Frye v.
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From page 142... ...
and is willing to mumble some magic words about "reasonable medical certainty." Malpractice by mouth from the witness stand is thus not subject to any control at all. Any old resume qualifies someone to be a witness, but only those who comply with the mainstream standards of professional medicine are good enough to escape liability.
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From page 143... ...
The availability of insurance in particular industries, and for particular products that have proved most attractive to litigants, has declined, and prices have increased, as the courts have adopted rules that discourage rational underwriting and systematic selection and differentiation of risks. At the same time, U.S.
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From page 144... ...
The Court linked reliability directly to scientific validity, and stated that trial judges must make a preliminary determination that expert scientific testimony reflects "scientific knowledge." The two dissenting Justices reproached the majority for setting up judges in the role of "amateur scientists." To be sure, Daubert wild not immediately put an end to bad science in federal court. The Supreme Court emphasized the trial courts' "flexibility" in screening scientific evidence and did not designate failure to meet any particular criterion as automatically dispositive.
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From page 145... ...
The Court also directed judges' attention to determining the known or potential rate of error of the technique in question, as well as the existence and maintenance of standards controlling the technique's operation. Moreover, general acceptance of the methods and theories at issue bear on the inquiry: the Court noted that "widespread acceptance can be an important factor in ruling particular evidence admissible." Most judges applying these factors will dismiss junk science claims before they reach trial.
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From page 146... ...
government carefully insisted on trial by judge, not jury, forbade punitive damages, and denied liability for any "discretionary function," the government equivalent of the judgment calls that a private company routinely makes in designing a new product. More recently, and much less fruitfully, have been attempts to expand supply or curtail the cost of insurance by direct legislative decree.
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From page 147... ...
Many states have placed limits of one sort or another on joint liability, to reduce the increasingly magnetic properties of insurance, which otherwise cause the best insured to attract the most lawsuits. In addition to the 1993 Daubert ruling, there have been various other efforts to improve the quality of scientific testimony in the courts, so that factually unfounded claims cannot be used for their speculative value before a jury that may not understand the science in question.
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From page 148... ...
When the legal rules are such that insurance itself attracts litigation, when the rules change too quickly for actuarial assessment, and when systematic biases creep in against new technologies and innovative undertakings, insurance will rise in price and narrow in coverage. No other country in the world has gone through liability insurance shocks like those experienced in the United States.
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From page 149... ...
1, p. 18; Boffey, Vaccine Liability Threatens Supplies, New York Times, June 26, 1984, sec.
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From page 150... ...
U.S. libel law likewise sets standards of liability so as to minimize the chilling effect of tort litigation on the press, and requires close review of jury verdicts by appellate courts.
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