What Liability Crisis? An Alternative Explanation for Recent Events in Products Liability

Abstract

Increasing premiums and the withdrawal of some kinds of coverage in commercial liability insurance markets are widely believed to have led some manufacturers to raise product prices and to withdraw certain products from the market. These changes have been attributed to the expansion of manufacturer liability for product-caused injuries, and have been seen as evidence that products liability law is in need of fundamental reform. This Article challenges the theoretical and empirical foundations of that well-accepted view through a careful examination of the work of Professor George L. Priest, one of the most influential leaders of the tort reform movement. Croley and Hanson first consider and reject the conventional explanation for the liability "crisis. "They then argue that any expansion toward enterprise liability furthers the deterrence and insurance goals of tort law by forcing consumers to internalize the full pecuniary and nonpecuniary costs of product-caused injuries. Finally, Croley and Hanson argue that recent changes in commercial liability insurance and consumer product markets may well represent the desirable consequences of efficient changes in products liability law. They urge courts and legislatures to continue the expansion toward enterprise liability.