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Should "Relative Safety" Be a Test of Product Liability?

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  • Boyd, James
  • Ingberman, Daniel E

Abstract

Case and statutory law often condition liability on the safety of the defendant's product relative to competing products. This article explores the safety and welfare implications of commonly observed "technological advancement: and "customary practice" tests of productive liability. We find that, in general, the technological advancement test yields excessive safety expenditures, while the customary practice test leads to inadequate safety. In addition, we show that characteristics of the law vary across jurisdictions and in ways that can significantly affect the tests' desirability. Two particularly important characteristics are the degree to which the tests are conclusive and whether or not compliance with government standards is used as an external complement to relative safety evidence. Jurisdictions can mitigate the worst tendencies of relative safety tests by not allowing them to be conclusive and by allowing for reference to government or other external standards. Copyright 1997 by the University of Chicago.

Suggested Citation

  • Boyd, James & Ingberman, Daniel E, 1997. "Should "Relative Safety" Be a Test of Product Liability?," The Journal of Legal Studies, University of Chicago Press, vol. 26(2), pages 433-473, June.
    • Handle: RePEc:ucp:jlstud:v:26:y:1997:i:2:p:433-73
    DOI: 10.1086/468003
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    Cited by:

    1. Robert Innes & Dennis Cory, 2001. "The Economics of Safe Drinking Water," Land Economics, University of Wisconsin Press, vol. 77(1), pages 94-117.
    2. Deffains, Bruno & Demougin, Dominique, 2008. "Customary versus technological advancement tests," International Review of Law and Economics, Elsevier, vol. 28(2), pages 106-112, June.

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