Product Liability and Innovation Managing Risk in an Uncertain Environment (1994) / Chapter Skim
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The Role of the Justice System in the Product Liability Debate
The Role of the Justice System in the Product Liability Debate
Pages 37-44
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From page 37... ...
This can be seen most recently in the way former Soviet bloc countries have studied and replicated many aspects of our justice system. The fall of the Eastern bloc demonstrates that people cannot efficiently design and produce goods with strong government controls and directives such as those that were enforced by the Communist system.
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From page 38... ...
Although the consumer product may not have been the cause, consumer products are involved in an estimated 29,000 deaths-more than die each year from such diseases as prostate cancer or emphysema and 33 million injuries in the United States every year.2 In other industrialized countries, those who are injured generally receive far more benefits from government entitlement programs than their counterparts in the United States. They have, in effect, a governmentfunded social safety net for accidental injuries.
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From page 39... ...
Moreover, only 21 of the 305 cases resulted in compensatory damages of $1 million or more, and all were because the victim was either killed or permanently disabled.7 Recently, the Roscoe Pound Foundation studied punitive damages in state courts from 1965 to 1990. The foundation discovered that during that 25-year period there were only 355 product liability cases nationwide in which punitive damages were awarded.
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From page 40... ...
competitiveness problems go much deeper. Also, foreign manufacturers do not enjoy an unfair advantage when selling their products in the United States they must meet the same product liability stax~dards as American firms.
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From page 41... ...
Managers say products have become safer, manufacturing procedures have been improved, and labels and use instructions have become more explicit." Furthermore, it is most telling that many of the United States' competitors are moving toward a system that is more similar to the American system of product liability. For example, the European Community adopted a directive on product liability that required member nations to enact legislation the result of which would make their systems closer to the American system.~3 OPPORTUNI'l'lES FOR IMPROVEMENT Despite these benefits, the product liability system can and should be improved.
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From page 42... ...
As an example of the third area of change, the ABA helped pioneer a program in the 1970s called the Multi-Door Courthouse, which encourages alternatives such as arbitration, mediation, and conciliation. Today, there are more than 1,200 court-related programs that help solve entire categories of civil suits with such alternative dispute resolution methods.
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From page 43... ...
The other nations mentioned in the same study rely more on government entitlement programs than on their tort system. Although other countries may appear to have quantitatively less litigation and lower overall damage awards than the United States, accident victims receive compensatory benefits through nationalized health care, replacement income programs, and expansive workers' compensation systems, thus making resort to the litigation process less necessary.
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From page 44... ...
. A 1988 article on the Directive notes that it "incorporates many features of product liability law in the United States." The article discusses the dominant trends in the United States as related to the EEC Directive.
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