Our analyses show that the issue is more complex than indicated by the policy debate about whether there is either "too much" or "too little" product liability.
In the early 1990s, the ICJ's study of the economic effects of product liability in the pharmaceutical and medical devices industries described how product liability could have detrimental effects such as discouraging innovation and compromising safety. It also suggested reforms that could limit such effects without endangering consumer safety. This work helped focus the national debate about product liability on systematic evidence, rather than on anecdotes and assertions.
The ICJ has continued its efforts to understand the tangible economic effects of product liability suits by studying effects on product sales, stock prices, and media coverage in the automobile industry. This research has revealed that, although product liability verdicts generate substantial press coverage, particularly when juries award punitive damages, verdicts do not typically dampen sales. Furthermore, verdicts against manufacturers appear to affect stock prices only when the case is one of several similar pending cases or when award amounts are very large.
These analyses establish that the issue is more complex than indicated by the policy debate about whether there is either "too much or "too little" product liability. Most important, it suggests that a guiding principle for reform should be to aim for a system that sends clear and reliable signals to companies about acceptable and unacceptable behavior.
Economic Effects of Product Liability and Other Litigation Involving the Safety and Effectiveness of Pharmaceuticals — 2013
Liability effects on the economic performance of the pharmaceutical industry play a prominent role in the debate about the economic effects of product liability in the United States. The author analyzes incentive effects on company decisions, implications for economic outcomes such as drug safety and effectiveness, and suggests how public policy changes could mitigate liability-based sources of inefficient decisions of pharmaceutical companies.
Asbestos bankruptcy trusts play an important role in compensating asbestos injuries. This monograph examines how state tort laws address compensation paid by trusts and the evidence submitted in trust claim forms, how court proceedings take this evidence and compensation into account, and how the establishment of the trusts potentially affects compensation.
For product liability verdicts during 1983 to 1996 involving automobile manufacturers, the authors examine the amount of coverage in several dozen newspapers.
In this paper, the authors attempt to develop information about a narrow but important piece of a very complex puzzle -- the sketchy economic effects of product liability.
This article aims to help readers think systematically about the economic effects of product liability and punitive damages.
The real world of tort litigation
Estimating Liability Risks with the Media as Your Guide: A Content Analysis of Media Coverage of Tort Litigation — 1996
A content analysis of 249 articles from Time, Newsweek, Fortune, Forbes, and Business Week during 1980-1990 examined the representativeness of popular media coverage of tort litigation.
Can Reform Improve the Economic Effects of Product Liability? Evidence From the Pharmaceutical and Medical Device Industries — 1993
This research brief summarizes the economic effects of product liability in the drug and medical device industries, how the system produces those effects, and what kinds of reforms could increase the system's benefits while reducing its costs.
The civil justice system has not responded well to the challenge of handling mass torts, and many innovations have been proposed to improve processing of these cases.
An edited transcript of written testimony delivered in September 1991 to the Consumer Subcommittee of the United States Senate Commerce Committee. The author covers five topics: trends in product liability; the nature and extent of product-associated...
In the last decade, U.S. corporations have faced growing legal liabilities. Peter Reuter tests a framework for analyzing how these liabilities might affect corporations economically, and offers evidence of liability’s influence on corporate behavior.
Presents a framework for analyzing how expanded liability might affect such outcomes as productivity and international competitiveness and offers some preliminary evidence on the impact of expanded liabilities on the behavior of corporations.
This paper is an edited transcript of written testimony delivered in October 1986 to the United States Senate Judiciary Committee.
This paper was originally presented as testimony before the Consumer Subcommittee of the Senate Committee on Commerce, Science, and Transportation in February 1986. It presents results of research conducted by the Institute for Civil Justice relevant...
Analyzes ways in which firms have responded to recent changes in pressures to design safer products, based on interviews with product safety officials in major manufacturers and extensive analysis of legal and scholarly literature.