Corporate Immunity

Seventy years ago, Judge Benja­min Cardozo rendered his now famous decision making Buick Motor Company liable for a defective wheel which fell off one MacPherson’s Buick and resulted in MacPherson’s injury.

Since then the court-made law of “products liability” has evolved into a wide array of legal liabilities for manufacturers who design or con­struct defective consumer products that injure users. Compared to the scope of hazardous products and consumer injuries documented by such agencies as the Consumer Product Safety Commis­sion, there are, however, all too few successful product liability settle­ments or verdicts. But even this small dose of justice and deterrent is proving too much for manufacturers and insurance companies which are now demanding curtailments on con­sumer rights against corporate harms.

The Law of products liability is supposed to deter the building of dan­gerous products such as drugs, autos, ovens, power lawnmowers or work­ers’ equipment. A rush of successful suits is supposed to make manufacturers more safety-minded and stop producing products with defects. The reason? Because it becomes cheaper to be safe than to be indifferent to safety. In the past, such deterrence has worked in just this way.

Now comes a mounting counterat­tack by business against the common law system of imposing product li­ability. In a barrage of speeches and statements, the insurance industry and other companies talk vaguely of millions of claims, huge verdicts, and imminent corporate bankruptcies to justify their skyrocketing claims.

But Search as one may, one cannot find any hard data to substan­tiate the alleged “products liability crisis.” T. Lawrence Jones, presi­dent of the American Insurance As­sociation, noted “a good data base is lacking” on claims and losses. He ex­plained this was due historically to the absence of any need by the insur­ance industry for setting rates. Jones pledged a vigorous effort to assemble the information.

In the meantime, Jones and his industry colleagues are not waiting before they recommend some fairly drastic restrictions on consumer rights to bring such suits and to recover adequate compensation after suits are filed.

Here are some samples of what industry intends to get through state legislatures:

1. Shorten the statue of limitations by starting the time period for filing suit from the defective act of the company instead of from the date of the injury.

No liability if the product con­forms to the state of the art at the time of manufacture (even if the state of the art itself is subpar).

Preventing workers from suing manufacturers of dangerous equip­ment by making workers’ compensa­tion law (often called “slot machine justice” by its critics) the sole reme­dy for worker injuries.

Limitation on the dollar amount of liability

S. Non-admissibility in evidence of post accident improvements (even to show that such improvement was feasible and economic before the culpable product was produced).

There are many other changes envisioned in the tort law of hazardous products — all alleviating manufacturers and insurance compa­nies from strenuous preventive safe­ty measures.