Reforming Products Liability

Reforming Products Liability

by W. Kip Viscusi
     
 

ISBN-10: 0674753232

ISBN-13: 9780674753235

Pub. Date: 09/28/1991

Publisher: Harvard

The current products liability crisis is both familiar and puzzling: million-dollar awards for apparently frivolous claims, inadequate settlements for thousands of people with severe injuries, skyrocketing insurance premiums, an overburdened judicial system. The adverse effects of this crisis on product innovation may be particularly detrimental to the extent

Overview

The current products liability crisis is both familiar and puzzling: million-dollar awards for apparently frivolous claims, inadequate settlements for thousands of people with severe injuries, skyrocketing insurance premiums, an overburdened judicial system. The adverse effects of this crisis on product innovation may be particularly detrimental to the extent that they deprive consumers of newer and safer goods.

W. Kip Viscusi offers the first comprehensive and objective analysis of the crisis. He employs extensive, original empirical data to diagnose the causes and to assess the merits of alternative reform policies.

Drawing on both liability insurance trends and litigation patterns, Viscusi shows that the products liability crisis is not simply a phenomenon of the 1980s but has been developing for several decades. He argues that the principal causes have been the expansion of the doctrine of design defect, the emergence of mass toxic torts, and the increase in lawsuits involving hazard warnings. This explanation differs sharply from that of most other scholars, who blame the doctrine of strict liability. Viscusi reformulates the concept of design defect, grounding it in sound economic analysis. He also evaluates public policy regarding hazard warnings and proposes a new national approach.

More generally, the author sketches a comprehensive social risk policy, in which tort liability interacts with government health and safety regulation to foster a coherent set of institutional responses to health and safety risks. Reforming Products Liability will be of special interest to lawyers, judges, policymakers, economists, and all those interested in legal policy and health and safety issues.

Product Details

ISBN-13:
9780674753235
Publisher:
Harvard
Publication date:
09/28/1991
Edition description:
New Edition
Pages:
287
Product dimensions:
6.12(w) x 9.25(h) x (d)

Table of Contents

Preface

1. Diagnosing the Liability Crisis

Perspectives on Liability Reform

Recent Trends in Products Liability

Proposals for Reform

2. The Dimensions of the Liability Crisis

Accident Rates Decline, But Litigation Soars

The Surge in Asbestos Litigation

Insurance Industry Trends

Roots of the Insurance Crisis, 1980-1984

Other Economic Effects of Products Liability

The Design Defect Doctrine and Hazard Warnings

3. The Litigation Process

The Overall Structure of Products Liability Litigation

Court Verdicts

Claims Settled Out of Court

Cases That Are Dropped

Using Economic Models to Assess Reform Proposals

4. The Design Defect Test

A Case Study of Risk-Utility Tradeoffs

Risk-Utility Analysis

The Producer as Insurer

Alternative Risk-Utility Measures

On the Threshold of Marketability

Who Decides?

Proposals for Restructuring the Product Defect Test

5. The Explosive Mathematics of Damages

The Insurance Value and the Deterrence Value of Damages

Inflation and the Increase in Verdict Awards

Noneconomic Damages

Has Voodoo Economics Come to the Courts?

Applying the Value of Life: The Ford Pinto Case

Proposals for Setting Damages

6. Regulation of Product Safety

The Adequacy of Incentives

Regulatory Violations and Products Liability Litigation

Restructuring the Institutional Interactions

7. Hazard Warnings

The Objectives of Hazard Warnings

Assessing the Quality of Warnings

Warnings and the Risk-Utility Test

Regulatory Compliance

Toward a National Warnings Policy

8. Environmental and Mass Toxic Torts

The Market Paradigm and Why It Fails

Products Liability—an Inadequate Remedy

Agent Orange and the Economic Stakes of Mass Toxic Torts

Compensation Funds

Strategies for Mass Toxic Torts

9. Workers' Compensation

Lessons from the Workers' Compensation Experience

Job-Related Products Liability Claims and Workers' Compensation

10. Will Products Liability Reform Matter?

Insurance Availability

Products Liability Definitions

State-of-the-Art Defenses

Statutes of Limitation

Collateral Source Rules and Damage Rules

Effects on Premiums

Conclusion

11. A Strategy for Principled Products Liability Reform

Appendix A: Products Liability Costs in Different Industries

Appendix B: The Litigation of Job-Related Claims

Notes

Bibliography

Index

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