What is meant by products liability reform?

Sellers and manufacturers have argued that the shift in legal standards from caveat emptor (let the buyer beware) to strict liability makes them vulnerable to even the most suspect claims, and they have taken this concern to their state legislatures and the United States Congress. As a result, some states have passed laws that help shield sellers and manufacturers from liability or limit their liability in certain cases.

One type of reform law permits manufacturers to defend themselves by proving that their products, when manufactured, met generally accepted safety standards. This state-of-the-art defense relieves manufacturers from the almost impossible standard of making a perfect product. When this defense is applied, an injured consumer cannot establish liability by arguing that the product would have been safer if the manufacturer had incorporated safety features that were developed after the product was made.

Businesses have also lobbied for the establishment of maximum amounts that injured consumers can be awarded as punitive damages. Some states have responded by capping these awards. In 1996, however, President Clinton vetoed a bill that would have limited punitive damages to $250,000 or twice the amount of the economic and noneconomic damages, whichever was greater. The President based his decision on his belief that the damage caps would deprive families of the ability to fully recover for injuries caused by defective products.

Consumer advocates, too, have opposed products liability reform laws because they allow manufacturers to avoid liability. The advocates argue that these laws discourage innovation and the setting of higher safety standards. On the other hand, the sellers and manufacturers may argue, the proliferation of products liability law suits costs every consumer money, because the costs of all products have to be increased to cover the expenses of litigation. There are persuasive arguments on both sides of this reform movement, which will undoubtedly continue to be waged for many years to come.