Product Liability and Innovation Managing Risk in an Uncertain Environment (1994) / Chapter Skim
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Product Safety Regulation and the Law of Torts
Product Safety Regulation and the Law of Torts
Pages 151-158
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From page 151... ...
Similarly, the more extreme claims linking product liability suits to lowered levels of research and development appear to have no basis in fact. One study has even found that at low to moderate levels of expected liability, increased liability costs encourage research and development.3 Only at very high liability levels is the effect negative.4 This result is quite plausible since increases in expected liability costs could induce spending on innovations to improve safety.5 Nevertheless, even if the alarm expressed by some observers is overstated, tort law may still be creating inefficient incentives for product innovation.
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From page 152... ...
This paper will address the question of how tort law and regulation by statute should fit together. While some critics contend that the size of jury awards implies that the tort system should be entirely abandoned as a way of regulating product quality, that is an unrealistic proposal.
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From page 153... ...
The federal courts have taken this approach in product and occupational health and safety cases. They have ruled, for example, that the Food, Drug, and Cosmetic Act sets only minima and does not preempt tort suits for damages (Abbot v.
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From page 154... ...
The conflict between torts and regulation would be exacerbated by the existence of punitive damages.9 Labeling law provides an example of how tort law can complement direct regulation. In 1993 two circuit courts ruled on federal preemption of tort claims, one under the pesticide statute and the other under the hazardous substance law.~° The statutes contain very similar language.
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From page 155... ...
Similar proposals exist to pay workers to use protective devices under the Occupational Safety and Health Act and to establish marketable rights for water pollution. How should courts handle claims by defendants that incentive-based regulatory statutes preempt tort actions?
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From page 156... ...
In contrast, if the victims are few in number and their problems are idiosyncratic, the law should either permit private rights of action for damages analogous to those permitted under the Consumer Product Safety Act and the Comprehensive Environmental Response, Compensation, and Liability Act (Superfund) ,~3 or it should allow tort actions under strict liability principles solely as a means of achieving compensation.
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From page 157... ...
Private lawsuits would be permitted under the statute only to compel regulated entities to comply with existing regulatory standards. But in policy areas that have not yet been reformed, a limited role remains for tort law or, at least, for private causes of action embedded in statutory schemes.
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From page 158... ...
8. A study of compliance with Occupational Safety and Health Act standards by the custom woodworking industry found high levels of compliance despite weak agency enforcement.
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