Few worries nag design teams more than the specter of devastating product
liability suits. A recent article in American Demographics looked at who is most
likely to sue. Among the key points:
About 9.5 million people a year receive nonfatal injuries in product-related accidents, excluding automobilies, according to a study by Rand, Santa Monica, CA.
Less than five percent of product-related injuries ultimately result in some type of legal action or compensation claim.
Just two percent of people hurt by products outside of work will make any claim for compensation. In contrast, seven percent of injured workers file a claim for compensation, while another four percent go a step further and hire an attorney.
The most likely product-liability claimants are middle-aged, blue-collar men. The classic case: a worker who suffers a hand or arm injury while operating machinery.
Product liability suits filed annually in federal courts increased from about 3,000 in 1975 to nearly 19,000 in 1994. Add to that as many as 90,000 filed in state courts.
Most people who file lawsuits settle their case without a trial; fewer than five percent go to trial.
The chances of manufacturers winning such suits seem to be getting better. Companies won 56 percent of product liability cases in 1994, up from 45 percent in 1989.
The median award in product liability cases last year was $509,000, according to Jury Verdict Research, Horsham, PA. But when such awards are multiplied through mass litigation, as in the silicone breast implant controversy, companies can be driven to bankruptcy.
Today's more conservative political climate has brought the strongest push for product liability relief in 20 years. The light aircraft industry, for example, received an enormous boost last year, when Congress passed the General Aviation Revitalization Act, which protects makers of small aircraft from being sued over accidents involving planes more than 18 years old.
At this writing, Congress is close to passing broad legislation that could ease the product liability bite. As it stands now, companies have had to pay out huge settlements on accidents involving machines built 40 or more years ago. To fight such suits, firms often have to pay out huge sums that could go for R&D and job creation, says Robert Rickert, president of Rexroth Indramat and a long-standing member of industry committees on product liability issues. "We need the help of every engineer," says Rickert. "I urge everyone to write Congress and urge passage of product liability reform."