The tightening of liability laws in the United States in recent decades has had positive and negative effects on those who make new products. “Strict liability” means that if a consumer is injured by a defective product, they can sue the manufacturer even if they bought it from a retailer. An implied warranty moves along the purchasing chain with all consumer products, and the defect in the item proves the manufacturer to be negligent, even if the person wasn’t using the product as intended. It’s probably not surprising that consumers approve of such protection, since defective or badly designed products, such as water purification systems and filters, could result in dire consequences.

One initial result of this stricter legislation, however, was that entire lines of products vanished from the marketplace. Or, choosing a different route, businesses started relying on product liability lawyers to find loopholes that might get them out of complying with the strictest regulations. One argument was that most judgments were made in hindsight, perhaps based on scientific information that wasn’t available when the products were made. Many companies also claimed these liability laws removed any incentive to develop new products. According to Jules L. Coleman in “Risks and Wrongs,” a 1985/86 survey showed that 47% of American manufacturers had removed product lines, and 39% had decided not to introduce anything new.

As a result of the liability pressures on manufacturers of new products, many other companies took what was perhaps a more responsible route. Rather than decreasing or altogether ceasing new product research and innovation, they increased these activities. They actually spent more time researching how to produce better quality products, rather than seeking legal ways to avoid responsibility for producing those of lower quality.

Both manufacturers and retailers may argue that applying strict liability to new products puts no responsibility on the consumer to use products correctly, and it prevents growth in the market. But others might point out that if something protects people from injury due to defective products, then that’s not a bad thing. If strict liability has prevented badly designed or defective items from entering the market, and encouraged companies to produce better products, then strict liability may have resulted in a net gain in society.

Rene Lacape is a well trained insurance broker. He has been handling many kinds of insurances for the past many years. He still does well in his chosen field and is sure to help more people who will need his expert advice. Contact him now.