Can Absolute Manufacturer Liability be Defended?

Abstract

Professor George L. Priest's writings have asserted over the years that expanded products liability law forces manufacturers to sell insurance contracts in conjunction with goods and services, making consumer purchases more expensive than they are worth and reducing consumer welfare. In the last volume of this Journal, Steven P. Croley and Jon D. Hanson critically analyzed Professor Priest's work of recent years and argued that the expansion of tort liability has benefitted consumers even where it has forced the withdrawal of products and services from the market. Here, Professor Priest questions the conceptual and empirical claims behind Croley and Hanson's call for absolute liability. He presents an analysis of general aviation, a prominent product market heavily affected by the expansion of liability, to underscore the authors' contrasting conceptions of efficiency in tort. In order to demonstrate the destructive effects of contemporary tort law, he adduces statistics that show a dramatic decline in general aircraft production despite a concurrent decline in the product accident rate. He suggests that significant analytical and empirical issues need to be addressed before Croley and Hanson's recommendation of absolute manufacturer liability can be adopted.