Tort Law and the Products Liability Insurance Crisis

This report examines the theories behind the products liability insurance crisis, including the idea that the crisis is contrived by the insurance industry. Smith argues that the real source of the problem is judicial changes in tort law that undermine the predictability of risk and the independence insurance markets need to adequately measure risk. He recommends steps that governments should take to solve the crisis and bring down consumer and industry costs. 55 pages.

Contents

• Executive Summary
• I. Introduction
• II. Theories of the Crisis
  • Industry Collusion
  • The Underwriting Cycle
  • The New Litigiousness
    • 1. Is there more tort litigation than before?
    • 2. Are Plaintiffs More Likely to Win Verdicts or Large Damage Awards Than in the Past?
  • Insurance and the Changing Tort Law
• III. How Insurance Markets Work
• IV. The Judicial Revolution in Tort Law
  • Causation and the Insurance Rationale
  • Contract and the Endless Warranty
    • 1. Contract and Tort
    • 2. The Abolition of Privity
    • 3. Implied Warranty
  • Products Liability in Michigan – The Insurance Rationale Revisited
  • Joint Tort-Feasors and Risk Prediction
  • Erosion of Affirmative Defenses
    • 1. Contributory Negligence
    • 2. Product Misuse
    • 3. Assumption of Risk
    • 4. The Use of Independent Standards
  • Damages For All
  • Summary – What Hath the Courts Wraught...?
  • ...And Who Pays?
• V. Torts and Insurance – Saving the System
  • Damage Caps
  • Joint Liability
  • Independent Design Standards
  • Putting Meaning Back Into 'Causation'
  • Restoring Contract
    • 1. A Meaningful Warranty
    • 2. Assumption of Risk and Product Misuse
• VI. Conclusion
• VII. Endnotes
• About the Author