Fairness and Utility in Products Liability: Balancing Individual Rights and Social Welfare

This article undertakes a critical analysis of the Restatement (Third) of Torts: Products Liability, to determine if it properly balances the competing goals of protecting individual rights and promoting social welfare. It uses the same contrasting analysis that Professor George Fletcher applied to torts generally in his celebrated 1972 Harvard Law Review article, Fairness and Utility in Tort Theory. While Fletcher’s article is used as a template, his paradigm of reciprocity proves to be unworkable when applied to bargained-for exchanges such as those that occur between manufacturers and consumers in products liability. The “autonomy paradigm” is proposed as a modification that retains reciprocity’s goal of protecting equal liberty but broadens the test of equal freedom to include the express and implied consent to risks in exchange for express and implied benefits. The autonomy paradigm also makes modest utilitarian concessions in order to create a balanced and practical conceptual model that can be applied to the full range of tort law. The contrasting autonomy paradigm and reasonableness paradigm are applied to the three primary categories of product defects as described in the Third Restatement: manufacturing, warning, and design defects. The analysis provides the reader with markedly differing views of the same legal landscape. In doing so it reveals that in most respects individual fairness and social utility are balanced by and embodied in the Third Restatement. This balancing, as in torts generally, is achieved through the use of several tests based upon distinct concerns rather than the application of a single mega theory of liability applied to all cases and claims. Part VI discusses the one area where fairness is unnecessarily sacrificed for utility: claims brought by bystanders (strangers to the product rather than consumers) injured by dangers inherent in useful product design. Finally, it advances several strict liability proposals to restore the balance between fairness and utility with regard to bystanders injured by dangerous but socially useful product designs.