Punitive Damages in American Products Liability Litigation

Depicting the American system of products liability in general and punitive damages in particular as bizarre is unlikely to offend anybody. People unable to provide their own anecdotal evidence of exactly how twisted the system is are hard to find. Proponents of it, usually lawyers arguing the plaintiffs' cases, are dismissed as biased and profiting from their quarter cuts in billion dollar awards. This thesis describes the nature of punitive damages in products liability litigation and its position within the broader framework of torts. The emphasis is put on the rules of the state of California. I give a brief introduction of tort law and its three main categories. The products liability section discusses the nature of products, defects and the tests for them, possible parties and finally the theories of recovery. Thereafter, I describe the concept of punitive damages. In general, there exists clear rules governing when and how to award punitive damages. There is a lack of good statistics on the actual awards in this type of litigation. One main conclusion can be made though&semic depending on what point you want to make, you choose the data that fit it. I conclude with a brief analysis of the judicial, ethical and economic dimensions of punitive damages. The main justified criticism of the system in the judicial sense is the unpredictability of the size of the penalty. This weakness should not be overly hard to alleviate. A number of landmark cases Such as Grimshaw v. Ford Motor Company 119 Cal.App.3d 757, 174 Cal. Rptr. 348 (1981) and Hasson v. Ford Motor Company (1982) 32 Cal.3d 388, 138 Cal.Rptr. 705. , primarily involving car manufacturers, do stress the need of external means, e.g. punitive damages, to improve corporate responsibility and ethics. In terms of economics, the innovation of safe and thereby wanted products should not be hindered by punitive damages. One should also note the possibility to, through insurance companies, hedge the risk of punitive damages inherent in all corporate activities