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What Is Product Liability Reform?



Product sellers and manufacturers alike have claimed that the transition in the law from the caveat emptor standard ("let the buyer beware") to the stringent modern standard of strict liability makes these parties in the supply chain exposed like sitting ducks to attacks from consumers. This includes even consumers with the flimsiest and most creative of claims, if not also those with dishonest and disingenuous claims. These product makers have shared their concerns with legislators and lawmakers on Capitol Hill. In response, some states have enacted legislation to protect product sellers and makers from liability—or at least, to partially limit their liability exposure in some instances.

What Are Some of the Reform Measures Recently Put Into Place?

One reform law that has been put into place allows product manufacturers to defend themselves against consumer claims by proving that when they made their products originally, the products met all safety standards at the time that were generally accepted in the industry. The defense is called the state-of-the-art defense. The defense excuses a manufacturer from having to satisfy and meet the nearly implausible standard of manufacturing a product that is without defect and perfect. When a manufacturer uses this defense, a plaintiff consumer cannot establish a case of liability on the part of the manufacturer by claiming the product would be safer if the maker had included safety measures that were adopted after the product's manufacture date.

Product makers also sometimes advance the argument that the increase in product liability litigation is more costly on everyone in the marketplace, from the maker defendants to the plaintiff consumers. For example, consumers have to spend more money because the costs of products are raised by makers to cover their rising litigation costs.

What Is the Significance or Impact of the Punitive Damages Award Cap?

Companies and businesses have lobbied their state and federal legislators for reforms in other areas of product liability law, as well. One of those areas is in the creation of maximum threshold amounts that plaintiffs can receive as punitive damage awards. Some states, in response, have passed laws that specifically cap punitive damages at set amounts. President Clinton, in 1996, used his presidential veto for a federal bill that would have capped punitive damages at the greater of $250,000 or a figure that represented twice the sum of economic and non-economic damages. Then-President Clinton claimed that he believed punitive damage caps would deprive American families of the possibility of receiving a full recovery for any harm, damage, or injury they may have received as a result of defective products.

What Are Consumer Protection Advocates on the Other End of the Debate Saying About Product Liability Reform?

Consumer protection advocates have mounted some opposition to product liability reform legislation. They have done so because they construe some of the reform efforts as allowing product manufacturers to escape liability for their actions or products. Consumer advocates believe that recent reform legislation dissuades manufacturers from instituting innovations. They also believe that manufacturers are not encouraged to set high safety standards in the wake of recent reform efforts.