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Revista chilena de derecho

versión On-line ISSN 0718-3437

Rev. chil. derecho vol.39 no.2 Santiago ago. 2012 

Revista Chilena de Derecho, vol. 39 Nº 2, pp.277 - 296 [ 2012 ]







Joel González Castillo**

** Pontificia Universidad Católica de Chile, Chile. Correo electrónico: Email:

RESUMEN: Este artículo trata tres cuestiones vinculadas entre sí que son consideradas esenciales para la configuración de un sistema de responsabilidad por productos defectuosos. Primero, categoría de defectos: defectos de fabricación, defectos de diseño y defectos de información. Segundo, cómo determinar si el diseño de un producto es defectuoso habiendo al respecto dos posibilidades: expectativas del consumidor o el análisis riesgo-utilidad. Y, finalmente, si aplicar responsabilidad por culpa u objetiva en casos de daños causados por productos defectuosos.

Palabras claves: Responsabilidad por productos, productos defectuosos, responsabilidad estricta u objetiva, daños

ABSTRACT: This article examines three linked questions which are considered key elements for the configuration of a products liability system. First, defect categories, i.e., manufacturing defects, design defects, and insufficient warnings. Second, how to determine whether the design of a product is defective. Two possibilities become available at this point: consumer expectations test or risk-utility analysis. And, finally, whether to apply negligence or strict liability in cases of damages caused by defective products.

Key words: products liability, defective products, strict liability, damages.



Products liability is a highly controversial issue in the United States due to the striking nature of some cases, the enormous sums awarded by the juries and the difficulty that ordinary citizens encounter when attempting to understand the rationale of rulings in such cases 1. They not only capture the attention of lawyers, judges, scholars, and specialists, but also that of the media in general. Latin America has an extraordinary opportunity to legislate about this matter, avoiding the excesses of the American experience and making the best of the long and rich case law of the United States and Europe in this field.

The central objective of this article is to make a comparative analysis of three fundamental questions concerning this matter in Europe and the United States2.

First, defect types. On the one hand, we have the model of the Restatement (Third) of Torts by the American Law Institute (ALI), which distinguishes between manufacturing defects, design defects, and insufficient warnings. On the other hand, we have the European model, whose Products Liability Directive does not establish distinctions between defect types.

Second, criteria for determining whether a product is defective from the point of view of its design. Broadly speaking, there are two possible approaches: consumer expectations test or risk-utility analysis.

Third, standard of liability: negligence (to impose liability only in cases in which there is fault) or strict liability (to impose liability without regard to fault).

In very general terms, strict liability is applied in Europe and no distinctions are made among defect types. In the United States, the Restatement Second also imposes strict liability without making a distinction, whereas the Restatement Third distinguishes defect categories, and applies strict liability only in case of manufacturing defects and negligence in the other two defect categories. In Europe, the consumer expectations test is prevalent, whereas the United States favors either the risk-utility test, the consumer expectations test, or a combination of both.

The legislative choice on each of these three aspects is important for the configuration of a liability system and its consequences.

For instance, concerning the empirical effects of products liability policy, the debate between professors Whitford and Priest is well-known. In Professor Whitford’s opinion, the policy adopted by courts over the 1960s and 1970s –the expansion of manufacturer liability beyond that undertaken in warranties, that is to say, the application of strict liability– is likely to have reduced the rate of product defects. According to Priest`s investment theory, on the other hand, the expansion of manufacturer liability is likely to have increased the rate of defects and the rate of consumer injuries3.

Professor Epstein acknowledges that the rapid increase in the overall level of products litigation has been matched by a long and steady decline in accidents level, but he observes that “the relationship between the improved accident picture and the changes in tort liability area seems weak at best. The decline in accident rates started before the expansion in tort liability and continued uniformly even as the doctrinal expansion in the field halted around 1990…The simplest explanation appears to be that technological improvements in safety are desired for their own sake, wholly apart from the choice of products liability regimes”4.


In the United States, the Restatement Second of Torts (1965) did not distinguish types of product defects. It was the Restatement Third of Torts (1998) which made the well-known tri-partite distinction. In fact, Section 2 of the latter states that:

“Categories of Product Defects.

A product is defective when, at the time of sale or distribution, it contains a manufacturing defect, is defective in design, or is defective because of inadequate instructions or warnings. A product:

(a) contains a manufacturing defect when the product departs from its intended design even though all possible care was exercised in the preparation and marketing of the product;

(b) is defective in design when the foreseeable risks of harm posed by the product could have been reduced or avoided by the adoption of a reasonable alternative design by the seller or other distributor, or a predecessor in the commercial chain of distribution, and the omission of the alternative design renders the product not reasonably safe;

(c) is defective because of inadequate instructions or warnings when the foreseeable risks of harm posed by the product could have been reduced or avoided by the provision of reasonable instructions or warnings by the seller or other distributor, or a predecessor in the commercial chain of distribution, and the omission of the instructions or warnings renders the product not reasonably safe” 5.

To illustrate, the example of a car can be used. If a specific car is manufactured with defective tires, it is a manufacturing defect; by contrast, if all automobiles of the same brand and model have the same defect, it is a design defect, and, finally, if the damages were caused by an inadequate warning about the usage and characteristics of said tires, it is a case of insufficient warning.

Manufacturing defects are considered relatively minor because they involve individual products only.

Design defects and inadequate warnings cases are economically more important because they affect entire product lines.

In Europe, on the other hand, the European Products Liability Directive6 does not establish distinctions between defect types and applies the same rules to all of them.



The definition of “defect” in the case of a manufacturing problem is not usually difficult; the product is not what it was intended to be.

Most of the problems have been encountered in connection with design defects. Roughly speaking, there are two tests: consumer expectations and risk-utility.

The consumer expectations doctrine states that manufacturers are liable for product-induced harm whenever the product is considered “dangerous to an extent beyond that which would be contemplated by the ordinary consumer who purchases it, with the ordinary knowledge common to the community as to its characteristics”7. Typically, “[w]hether a product is unreasonably dangerous is a question of fact [about which jury members] .... can draw[ ] their own reasonable conclusions as to the expectations of the ordinary consumer and the knowledge common in the community at large”8.

With regard to the risk-utility test courts have employed two primary versions of it: one in which the aggregate costs and benefits of the marketed product design are assessed, and one in which only the marginal costs and benefits of a proposed alternative design are assessed. The former “macro-balancing” approach examines the safety and utility tradeoffs of the product as a whole, while the latter “micro-balancing” approach examines only the tradeoffs posed by a suggested safety improvement or design alteration to the product9.

According to Reimann consumer expectations test prevails in the majority of jurisdictions and “it is codified in art. 6 (2) of the EC Directive”10 and consequently applies in all EU member states as well as in most other European countries. Risk-utility analysis tends to dominate in the United States11 and looks like the trend of the future. Yet, as Reimann aptly says it would be wrong neatly to divide the world into separate geographic spheres governed by different tests. The consumer expectation paradigm is also used in the United States, often in combination with the risk-utility analysis, and the risk-utility analysis is occasionally used in other countries as well, albeit mostly to define negligence in general tort law. Thus the difference is really one of emphasis: on the risk-utility approach in the United States, on the consumer expectation test in the rest of the world12.

The predominance of the consumer expectation test on a worldwide level is not necessarily due to its superior merits. More likely, as Reimann writes, it is mainly a result of timing. In the 1960s and 1970s, it was the state of the art in the United States. Thus, when the Europeans imported American product liability ideas in the 1970s and 1980s, they also imported the consumer expectation test. In the 1980s and 1990s, many other countries around the world adopted the European model in turn and took the consumer expectation test as part of the package, thus helping it to prevail on a worldwide level. Ironically however, the Europeans and others apparently overlooked the fact that by the time they adopted the consumer expectation test, the Americans had come to doubt its adequacy: by the late 1970s, they had either replaced or at least supplemented it with a risk-utility analysis. This sequence of events may have long-term consequences. If the United States continues to move further towards the risk-utility paradigm while other countries stick to the consumer expectation test (which is likely at least where it has been codified), the respective regimes will continue to diverge13.

In the case of the USA, Conk points out that in the Restatement (Third) of Torts, the American Law Institute (ALI) announced a general rule to resolve the problem of the meaning of the word “defect,” a problem that has haunted the law of torts since section 402A of the ALI’s 1965 Restatement (Second) marked the beginning of the era of strict liability for defective products. The new rule14 rejects consumer expectations as a reliable measure of defect and proposes that the key question is whether there existed a feasible alternative safer design, the omission of which was unreasonable15 16.

Conk adds that courts had long grappled with the problem of defining “defect,” drawing on concepts such as warranty and the consumer’s reasonable expectations. But they drew most successfully on risk-utility analysis, a negligence-based approach championed by John Wade, the successor to William Prosser as Reporter for the Restatement (Second) of Torts.

Wade offered a list of factors he deemed significant in applying the “unreasonably dangerous” standard of the Restatement (Second) 17:

(1) The usefulness and desirability of the product -its utility to the user and to the public as a whole.

(2) The safety aspects of the product -the likelihood that it will cause injury, and the probable seriousness of the injury.

(3) The availability of a substitute product which would meet the same need and not be as unsafe.

(4) The manufacturer’s ability to eliminate the unsafe character of the product without impairing its usefulness or making it too expensive to maintain its utility.

(5) The user’s ability to avoid danger by the exercise of care in the use of the product.

(6) The user’s anticipated awareness of the dangers inherent in the product and their avoidability, because of general public knowledge of the obvious condition of the product, or of the existence of suitable warnings or instructions.

(7) The feasibility, on the part of the manufacturer, of spreading the loss by setting the price of the product or carrying liability insurance18.

In Conk’s opinion the “alternative-safer-design” rule of the Restatement (Third) is the vindication of Wade’s view that design-defect litigation should turn on whether the product could have and should have been made safer before it was sold19.


Both tests have been praised and criticized for their advantages and disadvantages.

The most obvious downsides of the consumer expectation test are that it leads to the acceptance of products that are so dangerous that no reasonable person can overlook it, and that it fails when there are no reasonable expectations at all, e.g., because consumers do not know what to expect for lack of experience or expertise20. As Professor Wade has said “in many situations, particularly involving design matters, the consumer would not know what to expect, because he would have no idea how safe the product could be made”21.

The test was rejected by the Model Uniform Product Liability Act, which states that the consumer expectations test “takes subjectivity to its most extreme end. Each trier of fact is likely to have a different understanding of abstract consumer expectations”22.

In Kysar’s words the consumer expectations test for design defectiveness “has become products liability’s version of the rule against perpetuities: a doctrine nearly universally reviled but stubbornly and inexplicably persistent”. Purporting to arise from the venerable section 402A of the Restatement (Second) of Torts, the test actually appears to represent a gross misreading of that section. From this questionable origin, the consumer expectations test rose to prominence during the products liability revolution of the 1960s and 1970s. Even during the doctrine’s heyday, however, academic commentators were expressing reservations about its attempt to rest product design liability on the simple but essentially formless question of whether a product disappointed the safety expectations of an “ordinary consumer”23. Indeed, by the 1980s, a consensus view among products liability scholars emerged that the consumer expectations test was both indefensible in theory and unworkable in practice24. In its stead, scholars advocated the explicit cost-benefit balancing approach of the primary alternative doctrine that courts had developed for determining design defectiveness, the risk-utility test. Finally, as products liability entered its fourth decade of confusion concerning the scope and significance of the consumer expectations test, the American Law Institute appointed Professors Henderson and Twerski, two academic critics of judicial expansion of product manufacturer liability, as co-Reporters of the ALI’s ambitious and important project, the Restatement (Third) of Torts. Kysar concludes that when the ALI eventually adopted the results of the Reporters’ prodigious efforts on May 20, 1997, it endorsed a set of black-letter statements that finally and definitively rejected the consumer expectations test as an independent test for product design defect in favor of the more analytically sound risk-utility test25.

The risk-utility paradigm, in turn, has been criticized because it may accept even gross and hidden dangers simply because they keep a product cheap or otherwise useful, and it may impair consumer autonomy if courts dictate safety devices neither desired by the market nor endorsed by the political process26.

Moreover, it has been said that alternative design requirement (“micro-balancing” version of the risk-utility test) of the Third Restatement places an “undue burden” on plaintiffs by requiring them to use expert evidence in every design defect case. The burden of proof lies with the plaintiff: “To establish a prima facie case of defect, the plaintiff must prove the availability of a technologically feasible and practical alternative design that would have reduced or prevented the plaintiff’s harm”27. (The Restatement (Second) relieved plaintiffs from proving negligence on the part of the manufacturer).


The following states have either expressly accepted the Restatement’s risk-utility analysis or relied on the Restatement (Third) as support for conclusions in design defect cases or required a showing of reasonable alternative design, which is consistent with the Restatement’s risk-utility analysis: California28, Florida29, Georgia30, Iowa31, Michigan32, New Jersey33, Texas34, Washington35, Massachusetts36, Mississippi37, North Carolina38 39. In Connecticut the alternative design requirement received a mixed reception in Potter v. Chicago Pneumatic Tool Co., which took the position that a plaintiff may, but need not, prove an alternative design to prevail40.


According to Professor Epstein the two-pronged Barker formulation seems the dominant norm today41. In this case the court said a product is defective in design “if (1) the plaintiff proves that the product failed to perform as safely as an ordinary consumer would expect when used in an intended or reasonably foreseeable manner, or (2) the plaintiff proves that the product’s design proximately caused injury and the defendant fails to prove, in light of the relevant factors, that on balance the benefits of the challenged design outweigh the risk of danger inherent in such design…” and in evaluating the adequacy of a product’s design pursuant to this latter standard, a jury may consider, among other relevant factors, “the gravity of the danger posed by the challenged design, the likelihood that such danger would occur, the mechanical feasibility of a safer alternative design, the financial cost of an improved design, and the adverse consequences to the product and to the consumer that would result from an alternative design…”. The court noted “this dual standard for design defect assures an injured plaintiff protection from products that either fall bellow ordinary consumer expectations as to safety, or that, on balance, are not as safely designed as they should be. At the same time, the standard permits a manufacturer who has marketed a product which satisfies ordinary consumer expectations to demonstrate the relative complexity of design decisions and the tradeoffs that are frequently required in the adoption of alternative designs. Finally, this test reflects our continued adherence to the principle that, in a product liability action, the trier of fact must focus on the product, not on the manufacturer’s conduct, and that the plaintiff need not prove that the manufacturer acted unreasonably or negligently in order to prevail in such an action…”42.


In connection with design defects an unresolved problem is whether a manufacturer should be liable for dangers unknowable at the time of manufacture, in other words, whether a “state of the art” defense is available.

In Europe, one usually speaks of the “development risk”, though the European Products Liability Directive does not use that expression. The Directive allows this defense43. While it also permits the member states to exclude it44.

In the Unites States, cases on this matter have been inconsistent even within one and the same jurisdiction45. The reason for this is that although statutorily prescribed in many states, there is no uniform meaning of “state of the art”. It either refers to industry custom or to the most advanced technology commercially used, or to scientifically known cutting-edge technology46. Conformance with the third standard will typically preclude liability47, while conformance with the first and second standards rarely, if ever, gives rise to an absolute defense48. Among the few jurisdictions that do recognize this defense – typically based on the second standard of advanced technology – no uniformity exists as to the temporal dimension of state of the art. Some jurisdictions focus on the state of the art at the time the product was designed, while others examine the state of the art at the time the product was placed on the market49. Even though most jurisdictions do not recognize industry custom and commercially used advanced technology as absolute defense, these criteria are relevant when examining the feasibility of an alternative design. In other words, these standards play a role in determining the defectiveness of the product’s design50.



Through most of the twentieth century, products liability law steadily evolved toward protection of consumers, culminating in the 1960s and 1970s with widespread judicial acceptance of section 402A of the Restatement (Second) of Torts, which imposed liability on manufacturers for injuries caused by dangerous products, without regard to fault (“strict liability”).

Section 402A imposed liability even where the manufacturer “exercised all possible care” to avoid harm due to products in a defective condition unreasonably dangerous to the user or consumer. The section reads as follows:

“Special Liability of Seller of Product for Physical Harm to User or Consumer

(1) One who sells any product in a defective condition unreasonably dangerous to the user or consumer or to his property is subject to liability for physical harm thereby caused to the ultimate user or consumer, or to his property, if

(a) the seller is engaged in the business of selling such a product, and

(b) it is expected to and does reach the user or consumer without substantial change in the condition in which it is sold.

(2) The rule stated in Subsection (1) applies although

(a) the seller has exercised all possible care in the preparation and sale of his product, and

(b) the user or consumer has not bought the product from or entered into any contractual relation with the seller”51.

Section 402A ratified a body of product-defect case law emerging from the state courts in the 1960s. The New Jersey Supreme Court in Henningsen v. Bloomfield Motors52 and the California Supreme Court in Greenman v. Yuba Power Products53 inaugurated a new era in the law of products liability. In the tradition of judicial innovation represented by such jurists as Benjamin Cardozo and Louis Brandeis, the New Jersey and California Supreme Courts sought to use tort law as a tool for consumer protection. The ALI’s adoption of section 402A imparted credibility to this effort because of the prestige of the ALI and the strong consensus among its leading voices that strict liability was the proper rule. With the issuance of the Restatement (Second), “the concept of strict liability for defective products became institutionalized”54.

However, as Conk has pointed out Section 402A contained an internal tension: Its declaration that a manufacturer would be liable even if it “exercised all possible care in the preparation and sale of [its] product” was bounded by its application only to products that were “in a defective condition unreasonably dangerous to the user or consumer or to his property”55. Thus, the section’s strict-liability rule was tempered by a negligence-based concept of defect56. Conk adds that Dean Prosser, who served as a Reporter for the Restatement (Second), noted the tension between strict liability and negligence in section 402A: “Since proper design is a matter of reasonable fitness, the strict liability adds little or nothing to negligence [on the part of the manufacturer]; but it becomes more important in the case of a dealer who does not design the product”57. Birnbaum holds a similar view, and has therefore criticized said section as reintroducing negligence elements58.

Section 1 of the Restatement Third, as opposed to Section 402 A of the Restatement Second, points out that:

“Liability of Commercial Seller or Distributor for Harm Caused by Defective Products.

One engaged in the business of selling or otherwise distributing products who sells or distributes a defective product is subject to liability for harm to persons or property caused by the defect”59.

Then, in its section 2, for purposes of determining liability under section 1, distinguishes three categories of product defects.

The writing of these sections is noticeably different from that of Section 402A of Restament Second. It must be observed that the new Restatement imposes liability even though “all possible care was exercised” in the preparation and marketing of the product only in the case of manufacturing defect. Its predecessor, on the other hand, imposed liability even where the manufacturer “exercised all possible care” to any defect.

The change reflects the thought of the American Law Institute Reporters for the Restatement Third James Henderson and Aaron Twerski, who had been harsh critics of the strict-liability movement60. As they clearly wrote in comment a of section 2 “In general, the rationale for imposing strict liability on manufacturers for harm caused by manufacturing defects does not apply in the context of imposing liability for defective design and defects based on inadequate instruction or warning”61. I analyze this later.


The European Products Liability Directive proclaims strict liability directly and indirectly.

It does so directly in the preface. It starts by saying that approximation of the laws of the Member States concerning the liability of the producer for damage caused by the defectiveness of his products is necessary because the existing divergences may distort competition and affect the movement of goods within the common market and entail a differing degree of protection of the consumer against damage caused by a defective product to his health or property; and it concludes that “liability without fault on the part of the producer is the sole means of adequately solving the problem, peculiar to our age of increasing technicality, of a fair apportionment of the risks inherent in modern technological production”62.

The Directive announces strict liability indirectly in its article 4 when it says: “The injured person shall (only) be required to prove the damage, the defect and the causal relationship between defect and damage”63. Note that this article does not require the plaintiff to prove fault.

In his comparative study of products liability regimes, Reimann says that it is true that the European Directive proclaims strict liability but nonetheless implicitly relies on notions of due care in at least two ways. First, it considers a product defective if it is “not as safe as a person is entitled to expect, taking all circumstances into account”64. But, according to Reimann, making (and releasing) such a product “smacks of negligence”. Second, the crucial moment to judge the product’s defectiveness is “the time when it was put into circulation”65; in particular, the defendant can escape liability by showing that the defect was unavoidable given the technical or scientific knowledge at the time66. In other words, if the defendant did everything possible back then, he will not be liable today, even if the product has since turned out to be unreasonably dangerous. Again, liability really turns on blameworthiness. A truly strict regime would judge purely the product, and it would do so purely at the time of the judgment (or, at most, at the time of the accident)67.

Reimann leaves open the question whether these fault-related considerations turn the EC Directive’s approach (and others modeled after it) partially into a camouflaged negligence regime or whether liability is still strict in principle68. Be that as it may, for Reimann, there is no denying that under it, courts cannot decide design and warning cases without applying some kind of reasonableness standard. At the minimum, strict liability is somewhat ameliorated69.


Many authors have written on strict products liability and many explanations have been advanced to justify or criticize it. I have chosen some authors whose thoughts I think properly summarize the vast literature on that subject.

Montgomery and Owen catalogue the rationales behind strict products liability as follow: (1) Manufacturers convey to the public a general sense of product quality through the use of mass advertising and merchandising practices, causing consumers to rely for their protection upon the skill and expertise of the manufacturing community; (2) Consumer no longer have the ability to protect themselves adequately from defective products due to the vast number and complexity of products which must be “consumed” in order to function in modern society; (3) Sellers are often in a better position than consumers to identify the potential product risks, to determine the acceptable levels of such risks, and to confine the risks within those levels; (4) A majority of product accidents not caused by product abuse are probably attributable to the negligent acts or omissions of manufacturers at some stage of the manufacturing or marketing process, yet the difficulties of discovering and proving this negligence are often practicably insurmountable; (5) Negligence liability is generally insufficient to induce manufacturers to market adequately safe products; (6) Sellers almost invariably are in a better position than consumers to absorb or spread the costs of product accidents, and (7) The costs of injuries flowing from typical risks inherent in products can fairly be put upon the enterprises marketing the products as a cost of their doing business, thus assuring that these enterprises will fully “pay their way” in the society from which they derive their profits70.

Glenn, in turn, wonders why does a legal order resort to what is known as strict liability? According to this author, wherever a legal tradition is said to be developed, that is to say, capable of responding in a reasonably articulate fashion to the full range of modern dilemmas, there will be a similar tendency to burden the manufacturer with a larger compensatory role. This is not only because of the sympathy necessarily engendered by physical injury; it is also, and more importantly, because of the larger role played by the manufacturer. Manufacturing has itself been with us for millennia, but more recently that which has been made by the hand (manufactura) has been replaced by the product of the machine. Machine production is systemic production; systemic production requires both systemic design and systemic distribution. The notion of system implies structure and interdependence, and arguments for the internalization of social costs of production are the natural outgrowth of the process of systematization which has already taken place in the manufacturing process itself. Such costs are part of the larger universe of manufacturing; since they are part of it they must be internalized by it. Arguments for stricter forms of liability will emerge therefore in any legal tradition sufficiently developed to recognize what is occurring about it in the industrial and technological world71.

For Priest “the true foundation for the strict liability standard was... the accumulated effect of thirty years of scholarship that had created a consensus about the relatively inferior bargaining power of consumers, the importance of internalizing costs to manufacturers, and the benefits of spreading risks broadly through manufacturer insurance. These propositions at the time were uncontroversial, and strict liability follows inescapably from them”72.

Comment c of section 402A of the Restatement (Second) makes clear that the ALI’s preference for the expanded standard was motivated by all of these considerations. The drafters of section 402A explained that “On whatever theory, the justification for the strict liability has been said to be that the seller, by marketing his product for use and consumption, has undertaken and assumed a special responsability toward any member of the consuming public who may be injured by it; that the public has the right to and does expect, in the case of products which it needs and for which it is forced to rely upon the seller, that reputable sellers will stand behind their goods; that public policy demands that the burden of accidental injuries caused by products intended for consumption be placed upon those who market them, and be treated as a cost of production against which liability insurance can be obtained; and that the consumer of such products is entitled to the maximum of protection at the hands of someone, and the proper persons to afford it are those who market the products”73.

Another of the public policy rationales for the rule of strict products liability is the information imbalance between manufacturers and consumers. In the real world the parties are never perfectly informed; nor are they equally well informed. Producers generally are much better informed about product risks and the likelihood of liability than are consumers. This is so for at least four reasons. First, a producer obtains important information about the nature of its products in the course of designing and manufacturing them74. Second, a producer has a much greater stake in obtaining additional information, because it is potentially affected by all accident costs, rather than by the portion that will be visited upon a single accident victim (discounted by the probability of injury to a particular consumer)75. Third, consumers lack the means to acquire information about latent product risks76. Fourth, much of consumers’ limited information about products (especially new products) is derived from producers who have an incentive to downplay risk (as long as they expect to bear less than the full cost of resulting accidents)77 78.

More recently, Zekoll has said that some arguments in support of strict liability derive from fairness concerns for victims, such as providing compensation for the injured plaintiff79 and alleviating his difficulties in proving manufacturer negligence80. Others dwell on consumer expectations in the safety and integrity of the product81. However, according to Zekoll, most salient for the doctrinal development of strict liability, and its recent decline in design and warning cases, have been two welfare economics arguments that inhere in enterprise liability theory. The first rationale rests on the assumption that manufacturers are in the best position to spread risks by purchasing liability insurance and by passing these costs on to the public through increased prices82. The second argument stresses deterrence, the role of strict liability as an incentive for manufacturers to increase their investment in product safety, to make its products safer83.

Section 2, comment a of the Restatement (Third) highlights deterrence as a primary tort objective: “The emphasis is on creating incentives for manufacturers to achieve optimal levels of safety in designing and marketing products. Society does not benefit from products that are excessively safe –for example, automobiles designed with maximum speeds of 20 miles per hour– any more than it benefits from products that are too risky. Society benefits most when right, or optimal, amount of product safety is achieved”84.

Finally, it has been said that strict liability likely reduces litigation costs, because a plaintiff need only prove causation, not negligence. When it is clear that the product caused the plaintiff’s harm, parties under a strict liability regime are prone to settle out of court, because only damages are in dispute.

Critics charge that strict liability incentivizes product misuse (particularly in jurisdictions where this may not be a defense) and creates a moral hazard problem on the part of potential buyers. Reasoning that consumers will recover regardless of the amount of care they take in using the product, critics assert that consumers will underinvest in care even when they are the least-cost avoiders, thus leading to a lower aggregate level of care than under a negligence standard.

While proponents assert that the producer can build the cost into the price as insurance, critics argue that this assertion is ignorant of economics and only holds true in inelastic regions of the demand curve. As a result of strict liability for their products, manufacturers may not produce the socially optimal level of goods. Particularly within elastic regions of the demand curve, where consumers are very price-sensitive, the manufacturer by definition cannot pass on the economic costs to the consumers as a form of insurance without pricing many of those consumers out of the market for that good. However, because consumers are not willing to pay for this insurance, proponents of strict liability would argue that this is evidence of a product whose harm outweighs its good, in which case it should be removed from the market.

Critics also argue that applying strict liability to products results in substantially higher transaction costs. One example of these transaction costs is the creation of maintenance of legal disclaimers on products that would be unnecessary to the reasonable person – such as the ubiquitous instructions “not for human consumption” labeling on an inordinate number of non-food items. This results in a waste of time and resources for the producers who have to create these warnings, decreasing the producer surplus from trade. This also lowers the consumer surplus from these transactions, as all reasonably diligent consumers will read the unnecessary instructions, whereas the consumers likely to misuse the product are unlikely to be sufficiently diligent to read the instructions.


Some believe that the most adequate solution to decide which liability regime should be applied –negligence or strict liability– is to make a distinction between the different defect categories. Different types of defects necessitate different standards of liability.

As Zekoll aptly summarizes, manufacturing defect entails true strict liability because manufacturers cannot exonerate themselves by proving that they exercised all possible care in the production and marketing of the product. The imposition of strict liability under this concept has met with general approval. The reasons range from efficiency rationales, such as creating greater incentives to safety, to fairness considerations favoring the plaintiff’s expectations about the absence of hidden defects85.

Regarding design defects, most states have adopted some form of a risk-utility balancing test to determine whether a product’s design is defective. The inquiry under this test often focuses on whether a reasonable alternative design existed and whether the alternative would provide greater safety at reasonable cost without unduly impairing the utility of the product. Thus, rather than examining the product in light of consumer expectations, this test evaluates the defendant’s decision to choose one design over another. This conduct-oriented approach necessitates considerations that are akin to if not identical with those employed in negligence cases. The ultimate question in both categories is whether the defendant’s choice comports with that of a reasonable person86.

The third defect category, the failure to issue adequate warnings or instructions, also remains largely rooted in traditional negligence principles. According to the Restatement Third the test is whether “foreseeable risks of harm posed by the product could have been reduced or avoided by the provision of reasonable instructions or warnings”. Obviously, the notions of foreseeability and reasonableness are core ingredients of the negligence action, and most courts continue to impose a fault-based standard on the plaintiff who must prove that the defendant knew or should have known of the risks that caused damages to the plaintiff87 88.

Zekoll adds that the broad application of strict liability rules during the 1960s and 1970s has been criticized as providing inappropriate solutions in design defect and failure-to-warn cases. While this criticism has many facets, its core consists of the observation that design choices and warnings cannot be perfect, but can at best minimize knowable risks without compromising the utility of the product89. Based, furthermore, on the assumption that liability for unknowable risks not only fails to advance accident prevention, but also results in undesirable insurance effects90, critics conclude that the imposition of strict liability is neither fair (in the moral sense91) nor efficient (both from deterrence and risk-spreading perspectives92). These critics argue that applying negligence rules in design and warnings contexts advances fairness objectives and creates a superior incentive structure that includes the responsibility of consumers to use products in a prudent fashion93 94.

Henderson, one of the Reporters for the Restatement Third, also distinguishes defect categories to determine the liability regime: accepts “strict liability” for manufacturing defects because liability in such cases is determined narrowly and objectively, by reference to the manufacturer’s own standards95. He rejects strict liability in design and warning defect cases because without an objective standard courts will inappropriately second-guess product decisions96.

The Restatement Third says that in contrast to manufacturing defects (strict liability), design defects and defects based on inadequate instructions or warnings are predicated on a different concept of responsibility.

In the first place, such defects cannot be determined by reference to the manufacturer’s own design or marketing standards because those standards are the very ones that plaintiffs attack as unreasonable. Some sort of independent assessment of advantages and disadvantages, to which some attach the label “risk-utility balancing,” is necessary. Products are not generically defective merely because they are dangerous. Many product-related accident costs can be eliminated only by excessively sacrificing product features that make products useful and desirable. Thus, the various trade-offs need to be considered in determining whether accidents costs are more fairly and efficiently borne by accident victims, on the one hand, or, on the other hand, by consumers generally through the mechanism of higher product prices attributable to liability costs imposed by courts on product sellers.

Moreover, consumer expectations as to proper product design or warning are typically more difficult to discern than in the case of a manufacturing defect.

Finally, the element of deliberation in setting appropriate levels of design safety is not directly analogous to the setting of levels of quality control by the manufacturer. When a manufacturer sets its quality control at a certain level, it is aware that a given number of products may leave the assembly line in a defective condition and cause injury to innocent victims who can generally do nothing to avoid injury. The implications of deliberately drawing lines with respect to product design safety are different. A reasonably designed product still carries with it elements of risk that must be protected against by the user or consumer since some risks cannot be designed out of the product at reasonable cost97.


In 2003, Reimann wrote that it is unlikely that liability for faulty products will become substantively stricter than it is today. In Europe, there are no signs of that. In recent years, the European Commission has considered a long list of changes to the EC Directive favoring plaintiffs98. But, with the exception of including unprocessed agricultural products, no action was taken and the Directive will probably remain as it is in the foreseeable future. Nor are individual countries likely to move towards stricter standards. In the orbit of the European model, the development towards strict liability seems to have peaked and leveled off. In the United States, it has actually begun to turn back. Rather than continuing on the expansive course of the 1960s and 1970s, American product liability law has become distinctly more cautious in the 1980s and 1990s. Particularly in design and warning cases, the pendulum has swung from a rhetoric of strictness back to a standard reminiscent of negligence. Seven years ago, the Third Restatement openly acknowledged and supported this trend when it announced that liability in such cases turns on the foreseeability of risks and the reasonableness of precautions99. What is more, courts have become significantly more conservative as well100. In the last two decades or so, most of them have refused to expand liability further, and some have in fact retreated to earlier positions101 102.

According to Zekoll the often posed question whether strict liability prevailed over negligence can be summarized as follows: Strict liability prevails in manufacturing defect cases, while negligence principles have gained the upper hand in design defect and failure-to-warn disputes103. In general, the trend over the past twenty-five years has been to roll back some of the judicial innovations that benefited plaintiffs in the 1960s and 1970s104.


* This paper was prepared by the author in the framework of the Project: “Products Liability in Latin America” in his attendance as Visiting Researcher at the Hauser Global Law School Program of New York University.

** Civil Law Professor, Pontificia Universidad Católica de Chile.

1 Liebeck v. McDonald’s Restaurants, also known as the “McDonald’s coffee case,” is an emblematic one. It’s a 1994 product liability lawsuit that became a flashpoint in the debate in the U.S. over tort reform after a jury awarded $2.86 million to a woman who burned herself with hot coffee. The trial judge reduced the total award to $640,000, and the parties settled for a confidential amount before an appeal was decided. The case entered popular understanding as an example of frivolous litigation; ABC News calls the case “the poster child of excessive lawsuits”. On February 27, 1992, Stella Liebeck, a 79-year-old woman from Albuquerque, New Mexico, ordered a 49¢ cup of coffee from the drive-through window of a local McDonald’s restaurant. Liebeck was in the passenger’s seat of her Ford Probe, and her grandson Chris parked the car so that Liebeck could add cream and sugar to her coffee. She placed the coffee cup between her knees and pulled the far side of the lid toward her to remove it. In the process, she spilled the entire cup of coffee on her lap. Liebeck was wearing cotton sweatpants; they absorbed the coffee and held it against her skin as she sat in the puddle of hot liquid for over 90 seconds, scalding her thighs, buttocks, and groin. Liebeck was taken to the hospital, where it was determined that she had suffered third-degree burns on six percent of her skin and lesser burns over sixteen percent. She remained in the hospital for eight days while she underwent skin grafting. Two years of treatment followed.

2 For a comparative discussion of American law and the European Products Liability Directive, see, e.g., Culhane (1995); Howells (2000); Howells&Mildred (1998); Reimann (2003); Thieffry, Van Doorn&Lowe (1989).

3 The arguments of each author can be viewed in Priest (1981); Priest (1982); Whitford (1982).

4 Epstein (2008) p. 728.

5 American Law Institute, Restatement (Third) of Torts (1998) § 2 [HereinafterRestatement (Third)].

6 Council Directive 85/374 of 25 July 1985 on the Approximation of the Laws, Regulations, and Administrative Provisions of the Members States Concerning Liability for Defective Products.Official Journal L 210, 07/08/1985 (Hereinafter European Directive). Available at

7 American Law Institute, Restatement (Second) of Torts (1965) § 402A comment i [HereinafterRestatement (Second)].

8 Giglio v. Conn. Light & Power Co., 429 A.2d 486, 489 (Conn. 1980).

9 SeeOwen (1997) pp. 1661, 1664, 1670-86.

10 I do not agree with this statement, since said article only provides that “A product shall not be considered defective for the sole reason that a better product is subsequently put into circulation”. As a result, some authors hold that in fact the Directive is silent on these consumer-expectation or risk-utility standards.

11 Restatement (Third), supra note 5, § 2, especially subsec. (a) and (b) and comment a. See also Louisiana Products Liability Act § 2800.56 (for design defects).

12 SeeReimann (2003) pp. 768-769. The previous quotation in this paragraph comes from this source.

13 Reimann (2003) p. 769, n. 78.

14 Section 2 of the Restatement (Third) states that a product: “(b) is defective in design when the foreseeable risks of harm posed by the product could have been reduced or avoided by the adoption of a reasonable alternative design…, and the omission of the alternative design renders the product not reasonably safe” (emphasis added).

15 SeeRestatement (Third) § 2 cmt. d: “Assessment of a product design in most instances requires a comparison between an alternative design and the product design that caused the injury, undertaken from the viewpoint of a reasonable person. That approach is also used in administering the traditional reasonableness standard in negligence… The policy reasons that support use of a reasonable-person perspective in connection with the general negligence standard also support its use in the products liability contexts”.

16 SeeConk (2000) p. 1087.

17 Section 402A of the Restatement (Second) says: “(1) One who sells any product in a defective condition unreasonably dangerous to the user or consumer or to his property is subject to liability…” (emphasis added).

18 SeeWade (1973) pp. 837-38. Many courts, including those in New Jersey and California, have derived their risk-utility tests from Wade. See, e.g., Barker v. Lull Eng’g Co., 573 P.2d 443, 455 (Cal. 1978) (adopting the following five factors in its design-defect analysis: the gravity of the danger posed by the challenged design, the likelihood that such danger would occur, the mechanical feasibility of a safer alternative design, the financial cost of an improved design, and the adverse consequences to the product and to the consumer that would result from an alternative design); Cepeda v. Cumberland Eng’g Co., 386 A.2d 816, 826-27 (N.J. 1978) (citing Wade’s factors in its design-defect analysis). But seeHenderson&Twerski (1991) p. 1267 n. 9 (criticizing Wade as the intellectual precursor of the “liability without defect” trend).

19 SeeConk (2000) p. 1088.

20 Reimann (2003) p. 769, n. 79.

21 Wade (1973) p. 829.

22 Uniform Product Liability Act § 104(B) (1979).

23 See, e.g., Keeton (1979) pp. 310, 312-13; Schwartz (1979) pp. 475 n. 237, 476 n. 241; see also Todd v. Societe Bic, S.A., 21 F.3d 1402, 1406, 1409 (7th Cir. 1994) (“Under the Restatement, the consumer [expectations] test was the only standard authorized to determine whether a product was unreasonably dangerous. But tort commentators soon began to express dissatisfaction with the test’s restrictions on manufacturer liability”).

24 SeeKeeton, Dobbs, Keeton&Owen (1984) p. 699 (criticizing consumer expectations test); Birnbaum (1980) pp. 611-18 (warning that consumer expectations test might lead to “confused, divergent, and unjust decisions”); see also Henderson (1998) p. 20 (“If you look at the scholarship prior to 1992... major players in this products liability field almost without exception... said consumer expectations will not work as a mainstream test. It’s got to be some form of risk-utility”).

25 See Kysar (2003) pp. 1701-1702. The quotations in this paragraph all come from this source.

26 Reimann (2003) p. 769, n. 79.

27 Restatement (Third), supra note 5, § 2, cmt.f(emphasis added).

28 Morson v. Superior Court, 109 Cal. Rptr. 2d 343 (Cal. App Dep’t Super. Ct. 2001); Boeken v. Philip Morris, Inc., 2001 WL 1894403 (Cal. App. Dep’t Super.Ct. 2001)

29 Brassell v. K-Mart Corp., 765 So.2d 235 (Fla. Dist. Ct. App. 2000)

30 Jones v. Nordictrack, Inc., 550 S.E.2d 101 (Ga. 2001)

31 Wright v. Brooke Group Ltd., 652 N.W.2d 159 (Iowa 2002).

32 Smrekar v. Jeep Corp., 2001 WL 792476 (Mich. Ct. App. 2001); Grostic v. Agco Corp., 2003 WL 124309 (Mich. Ct. App. 2003).

33 Cavanaugh v. Skil Corp., 751 A.2d 518 (N.J. 2000); Saldana v. Michael Weinig, Inc., 766 A.2d 304 (N.J. Super. Ct. App. Div. 2001).

34 Hernandez v Tokai Corp., 2 S.W.3d 251 (Tex. 1999).

35 Ruiz-Guzman v. Amvac Chemical Corp., 7 P.3d 795 (Wash. 2000).

36 Sampson v. Shaw’s Supermarket, Inc., 2000 WL 426207 (Mass. App. Ct. 2000).

37 Wolf v. Stanley Works, 757 So.2d 316 (Miss. Ct. App. 2000).

38 Dewitt v. Eveready Battery Co., Inc., 550 S.E.2d 511 (N.C. Ct. App. 2001); Evans v. Evans, 569 S.E.2d 303 (N.C. Ct. App. 2002).

39 See Perkins (2004). The previous quotations in this paragraph all come from this source.

40 Potter v. Chicago Pneumatic Tool Co., 694 A.2d, 1319 (Conn. 1997).

41 Epstein (2008) p. 792.

42 Barker v. Lull Engineering Co., 573 P.2d 443 (Cal. 1978)

43 European Directive, supra note 6, art. 7 (e) “The producer shall not be liable as a result of this Directive if he proves: that the state of scientific and technical knowledge at the time when he put the product into circulation was not such as to enable the existence of the defect to be discovered”.

44 European Directive, supra note 6, art. 15 (1)(b) “Each Member State may: by way of derogation from Article 7 (e), maintain or…, provide in their legislation that the producer shall be liable even if he proves that the state of scientific and technical knowledge at the time when he put the product into circulation was not such as to enable the existence of a defect to be discovered”.

45 CompareBeshada v. Johns-Manville Prods. Corp., 90 N.J. 191, 447 A.2d 539 (1982) with Feldman v. Lederle Laboratories, 97 N.J. 429, 479 A.2d 374 (1984).

46 Restatement (Third), supra note 5, § 2, cmt.d.

47 Most statutes prescribe this result. See Dobbs (2000) p. 1032.

48 Restatement (Third), supra note 5, § 2, cmt.d, Reporters’ Note IV.B.

49 See id.

50 SeeZekoll (2002). The quotations in this paragraph all come from this source, except the number 45.

51 Restatement (Second), supra note 7, § 402A.

52 161 A.2d 69, 77 (N.J. 1960) (recognizing the general principle that a manufacturer’s duty runs directly to the consumer when the manufacturer markets its products directly to the consumer).

53 377 P.2d 897, 900 (Cal. 1963) (“A manufacturer is strictly liable in tort when an article he places on the market, knowing that it is to be used without inspection for defects, proves to have a defect that causes injury to a human being”).

54 SeeConk (2000) pp. 1091-1092.The quotations in this paragraph all come from this source.

55 Restatement (Second), supra note 7, § 402A (1).

56 See Conk (2000) p. 1092.

57 See Prosser (1971) p. 659 n. 72

58 SeeBirnbaum (1980).

59 Restatement (Third), supra note 5, § 1.

60 See Henderson, Jr. &Twerski (1991) pp. 1286-92.

61 Restatement (Third), supra note 5, § 2 comment a.

62 European Directive, supra note 6, foreword (emphasis added).

63 European Directive, art. 4.

64 European Directive, art. 6 (1).

65 European Directive, art. 6 (1)(c).

66 European Directive, art. 7 (e).

67 Reimann (2003) pp. 776-777.

68 For negligence, Howells (1993) p. 97; Stapleton (1999) p. 60; Zekoll (1989).For strict liability, Taschner (1986), pp. 27-28.

69 Reimann (2003) p. 777. The previous quotation in this paragraph comes from this source.

70 See Montgomery & Owen (1976) pp. 809-810.

71 SeeGlenn (1990) pp. 556-557.

72 See Priest (1985) p. 517.

73 Restatement (Second), supra note 7, § 402 A, cmt. c

74 SeeWagner (1997) pp. 800-801.

75 SeeCroley &Hanson (1993) p. 770; Epstein (1982) p. 1744.

76 SeeVandall (1997) pp. 264, 270 nn. 16 and 22.

77 See Croley&Hanson (1993) p. 770 n. 356; Vandall (1997) p. 264 n. 22.

78 Harvard Law Review (Note) (1998) p. 2376.The quotations in this paragraph all come from this source.

79 See, e.g., Owen (1990) p. 68.

80 Powers, Jr. (1991) p. 648.

81 See, e.g., Shapo (1995) p. 666; Little (1994) pp. 1203-1204.

82 See, e.g., Escola v. Coca-Cola Bottling Co. of Fresno, 150 P.2d 436 (Cal. 1944) (Traynor, J., concurring).

83 SeeZekoll (2002) p. 140. The quotations in this paragraph all come from this source.

84 Restatement (Third), supra note 5, § 2 comment a.

85 SeeZekoll (2002) p. 123.

86 Zekoll (2002) p. 124.

87 Vassallo v. Baxter Healthcare Corp., 696 N.E.2d 909 (1998).

88 SeeZekoll (2002) p. 124. The previous quotation in this paragraph come from this source.

89 See generally Henderson, Jr. &Twerski (1991).

90 See, e.g., Priest (1987) pp. 30-31.

91 Owen (1993).

92 SeePriest (1987) p. 10.

93 See generally Owen (1993).

94 SeeZekoll (2002) p. 141. The quotations in this paragraph all come from this source.

95 See Henderson Jr.&Twerski (1992) p. 1516.

96 See Henderson Jr. (1983) pp. 845 n. 2- 847.

97 Restatement (Third), supra note 5, § 2 comment a.

98 They have ranged from reversing the burden of proof for defectiveness and eliminating the development risk defense to abolishing liability limits and changing prescription periods.

99 Arguably, this change in theory is mainly a (belated) recognition that in practice, liability was rarely truly strict to begin with in design and warning cases, see Stapleton (1999) p. 50.

100 SeeHenderson Jr.&Eisenberg (1990).

101 A striking example is Brown v. Superior Court (Abbott Laboratories), 751 P. 2d 470 (Cal. 1988); in this case, the California Supreme Court, which had been at the forefront of products liability law in the 1960s and 1970s, essentially abolished strict liability for prescription drugs in favor of a negligence approach.

102 SeeReimann (2003) pp. 801-802. The quotations in this paragraph all come from this source.

103 For an early account on this development, see Birnbaum (1980).

104 SeeZekoll (2002) p. 139. The previous quotation in this paragraph comes from this source.


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