The products liability insurance crisis which has plagued Michigan and the rest of the nation is not the result of industry conspiracies, fluctuating interest rates, or a mad desire to sue on the part of the American public.

Rather, its primary cause is a mode of judicial thinking which has placed its emphasis on how to compensate plaintiffs rather than when to compensate them. To achieve desired results, courts have stretched the meaning of causation" beyond all recognition and driven voluntary, contractual agreements on the distribution of risk out of the market. They have stripped away affirmative defenses once available to defendants, and, through joint and several liability, held defendants liable for damages for which they were not at fault. This activity has taken place with little regard for its effects on insurance markets.

The result has been to shatter the predictability on which insurance markets rely, resulting in higher premiums that might be termed an "uncertainty tax". This mode of judicial thought has also eliminated the ability of manufacturers to control the risks they accept and has built in an element of adverse selection in insurance markets. Radically higher premiums, and in some cases a complete breakdown of the supply side of the insurance market, have resulted.

The effects of this judicial trend can be mitigated by efforts to cap non-economic damages and to restrict the application of joint and several liability. Reestablishing neo-contractual affirmative defenses such as product misuse and assumption of risk, and allowing compliance with independently established standards or industry norms to establish non-negligence, hold still greater promise.

A more comprehensive, long range solution, however, will require a change in thinking about the purpose of the tort system, away from compensation at any price and toward individual responsibility and causation. To this end, the courts must restore voluntary contracts to their proper place as delineators of rights and responsibilities, and provide a meaningful definition of causation that focuses responsibility on those actors whose behavior was truly the cause of, and not merely antecedent to, the accident.

In the long run, a system of strict liability, with a proper definition of causation and healthy contractual notions, including an assumption of risk defense, is the system most compatable with a stable, predictable determination of liabilities, affordable, available liability insurance, and a system of individual rights and responsibilities.