terms refer to two of the most the most significant common
law (i.e. judge made law) developments of the 20th Century.
The term product liability refers to the liability of
a manufacturer of a product sold to consumers for injuries
caused by that product. At the beginning of the last
century manufacturers were not liable to consumers for
defectively made or inadequately labeled products because
consumers lacked “privity of contract” with
the manufacturer. Starting in 1918 state courts began
dumping the privity requirement and allowing injured
consumers to sue manufacturers.
second development started about 40 years ago when manufacturers
of consumer products were made strictly liable for any injuries
that their products cause a consumer. In order to understand
the significance of strict liability we need to review four
types or degrees of civil legal culpability that a manufacturer
can have to a consumer. The first type is intentional misconduct.
For example, a food processor sells a product that the processor
knows is adulterated. The second type is called recklessness.
(The law school example of recklessness is firing a gun
into a crowd not knowing for sure whether the bullet will
hit anyone.) In this case a food processor sells a product
which the processor believes may be adulterated but does
not know this for a fact. In essence the processor is shifting
a known risk to its customers. The third type is negligence.
The processor believes that its products are wholesome,
but it fails to adhere to an industry or regulatory standard
when it makes the products and consequently sells an adulterated
product. The fourth type is strict liability. In this case
not only does the processor believe that its products are
wholesome, but it has conformed to industry and regulatory
standards when it made the products. Nevertheless, the products
turn out to be adulterated.
What’s significant about the development of strict
liability? Well, first of all it means that no matter how
careful you are, if you sell an adulterated product that
injures a consumer, you are liable for the consumer’s
damages. In other words, all of the risk of product injury
has been shifted to the processor and the processor’s
insurer. For the plaintiff’s attorney it makes proving
the case much easier. The attorney doesn’t need to
prove the processor’s state of mind or whether the
processor complied with some sort of standard. Most product
liability cases concern whether the product caused the
injury. In most cases this is probably obvious, but in
some it could be an evidentiary puzzle such as the whether
administering of a particular drug caused a medical complication.
are limits on who is subject to the rule of strict liability.
Generally service providers such as doctors, accountants,
engineers, attorneys, restaurants, mechanics etc. are not
subject to strict liability. Of course, they can still be
liable for negligence as well as intentional or reckless
misconduct. Also this rule does not cover non-consumer commodities
such as industrial chemicals unless they are used to make
consumer products, and the injured person must be suing
as a consumer of the subject product and not in some other
capacity (e.g. a victim of a toxic tort caused by the chemical
plant down the street).
final note. The concept of strict liability is also ubiquitous
in the regulatory area although regulators may take into
account your degree of culpability is assessing any penalties.