The basic legal and economic mechanisms of the product liability system are reviewed, as well as the relationship of that system to product safety. The topics discussed include negligence, contributory negligence, strict liability, and comparative negligence. Features of products liability are examined which are most often criticized in practice: jury trials, pain and suffering damages, contingent fees (comparison of British and American practices), collateral sources of compensation (insurance or welfare), contractual provisions ("hold harmless" clauses, contractual indemnity or disclaimer), state-of-the-art defense, and product safety standards and/or requirements. It is concluded that the tort law of products liability is likely to play a strong and potentially positive role in the evolving regulation of automobile safety, but that changes in substantive and procedural laws would enhance their effectiveness in regulating product safety. Comparative negligence law is considered a promising change. Changes are recommended in the contingent fee system. A system is recommended which provides adequate compensation for accident victims without destroying their accident avoidance incentives, and which does not attract litigation by the prospect of recovering damages far in excess of actual losses. The focus of products liability should be on developing and enforcing legal incentives for users and producers that lead to a socially efficient level of product safety.

  • Supplemental Notes:
    • Also published in HS-028 918, "Government, Technology, and the Future of the Automobile," New York, 1980 p 96-110. Presented at Harvard Business School Symposium on Government, Technology, and the Automotive Future, Boston, 19-20 October 1978.
  • Corporate Authors:

    McGraw-Hill, Incorporated

    330 West 42nd Street
    New York, NY  United States  10036
  • Authors:
    • KASPER, D M
  • Publication Date: 1980

Media Info

  • Features: References;
  • Pagination: 15 p.

Subject/Index Terms

Filing Info

  • Accession Number: 00392309
  • Record Type: Publication
  • Source Agency: National Highway Traffic Safety Administration
  • Report/Paper Numbers: HS-028 925
  • Files: HSL, USDOT
  • Created Date: Feb 28 1985 12:00AM