Product Liability

Problem

Product liability laws in some states fail to send clear signals to manufacturers about how to avoid liability, and hold manufacturers liable for failure to adopt certain designs when the manufacturers neither knew, nor could have anticipated, the risk.

ATRA's Position:

ATRA supports legislation that: governs all product liability actions, irrespective of the theory on which they are brought, so that plaintiffs cannot evade the law by inventing new theories of recovery;   permits a plaintiff to recover damages only upon proof that the product was defective and that the defect was the cause of the harm; sets out clear rules for determining when a product is defective; provides clear standards for establishing liability based on manufacturing defects, design defects, and warning defects; provides clear rules requiring proof of causation.

Opposition Opinion:

The personal injury bar’s argument against product liability reform – that a strict liability system encourages accident prevention by holding manufacturers, who are in the best position to reduce or eliminate injuries, fully liable for injuries caused by their products – unfairly holds manufacturers liable for any injury related to their activity regardless of their ability to foresee an imminent injury or the consumer’s ability to prevent it.  As the brunt of responsibility has fallen on manufacturers, product liability insurance premiums have risen twice the rate of inflation in recent years. As a result, many U.S. firms have opted to discontinue product research, cut back on introducing new product lines, and raise prices.  Ultimately, the abuse of product liability laws offers consumers fewer domestic products at higher prices and compromises the competitiveness of U.S. firms in foreign and domestic markets.

Product Liability Reform: SB 2805 (1987).

New Jersey|1987

Provides that a manufacturer or seller of a product is

[…]

Provides that a manufacturer or seller of a product is liable only if the plaintiff proves by a preponderance of the evidence that the product was not suitable or safe because it: (1) deviated from the design specifications or performance standards; (2) failed to contain adequate warnings; or (3) was designed in a defective manner.  Provides that a manufacturer or seller is not liable if at the time the product left the manufacturer’s control there was not available a practical and feasible alternative design that would have prevented the harm.  Provides that a product’s design is not defective if the harm results from an inherent characteristic of the product that is known to the ordinary person who uses or consumes it.  Provides that a manufacturer or seller is not liable for a design defect if the harm results from an unavoidably unsafe aspect of a product and the product was accompanied by an adequate warning.  Provides that the state of the art provision does not apply if the court makes all of the following determinations: (1) that the product is egregiously unsafe; (2) that the user could not be expected to have knowledge of the product’s risk; and (3) that the product has little or no usefulness.  Provides that a manufacturer or seller in a warning‑defect case is not liable if an adequate warning is given.  (An adequate warning is one that a reasonably prudent person in the similar circumstances would have provided.)  Establishes a rebuttable presumption that a government (FDA) warning is adequate.


[hide]