Balance Risk and Benefits When You Design Products

We’re now ready to look at our third and final theory, product liability, which is the tort of negligence. Remember in an earlier module, we define negligence generally as carelessness. But more specifically negligence arises where there is a breach of a duty of care that causes injury. We have that critical link between the breach of the duty of care and injury which is called causation. There are three areas where negligence is especially important in product liability cases. The first area arises when there’s a claim of defective manufacture of the product. In effect, the question is, was the company careless in manufacturing a product and that produced a defective product that entered the consumer.

Second question, was the company careless in designing the product? In effect what we’re asking here is, did the design make the product defective. And finally, was the product defective because of a lack of warning? Was the company careless in failing to warn the consumer that a product might be dangerous. Let me ask you this question, let’s say that you work for a car company, and you work in the design area.

Is it possible for you to design a car that would eliminate injuries resulting from automobile accidents in the future? Think about that for a second, hit pause, write down your answer.

The answer is probably yes. You probably could design a car that would eliminate injuries from automobile accidents in the future. But the question is, what would that car look like? Probably it would look like an army tank.

Would consumers rush to buy this army tank? Probably not. It’s probably not going to go pretty fast. Probably does not have good gas mileage. It’s probably going to cost hundreds of thousands of dollars. And so in other words, even though you could design a perfectly safe car. The courts would not require you to do that because they try to achieve a balance, between the safety of the product and its utility. On one hand, you could develop a car that is perfectly safe. But the courts aren’t going to require you to do that. They’re going to ask well, how much does this product cost? If it costs hundreds of thousands of dollars, nobody’s going to buy it.

They’re going to ask how desirable is this product? Are people really going to be interested in buying a car with a design that looks like army tank. And how useful is this product? What is the gas mileage? How fast will it go? How easy is the car to park? And so, they try to achieve a balance between the risk created by an unsafe product versus the utility of the product measured in terms of cost, desirability, and usefulness. There are other tests that some courts use as well, and this is illustrated by this advice from a law firm.

Most states use a test that measures the dangers a product poses as designed against the benefits it provides, which is called the risk-utility test. That’s the test we’ve just described. However other states use a test that measures whether the product was unsafe to an extent beyond what would be contemplated by an ordinary consumer. The consumer expectation test. So if you’re involved in designing products for your company, which test would you use? Would you use the test used by most states the risk utility test that we just described or would you use the consumer expectations test that is used by a smaller number of states? Please hit pause and write down your answer.

And the answer should be design your products to meet both tests because in a global economy your product is going to be marketed around the United States and in other countries. And so, whenever possible, as long as the tests don’t conflict, don’t be trapped by going with the majority rule. Try to adapt your product design to tests used in all jurisdictions. So that concludes our look at negligence, and we’re next going to look at how you can control and minimize product liability risk.