Defenders of the status quo in product liability point to the deterrent effect of such liability, and argue that manufacturers would misbehave without such liability. This, of course, assumes that manufacturers care nothing for their reputation in the marketplace, or that the marketplace does not care about safety and quality.
So the recent Medtronic recall of a lead for its defibrillators—undertaken in an abundance of caution despite the lack of statistically significant evidence—will provide an interesting test case for the plaintiffs' bar. As the New York Times reports, Medtronic's quick disclosure and recall contrasts favorably with the slower recall by Guidant three years ago. Will Medtronic be rewarded in the courtroom, or will they face the same degree of liability and litigation expense (or worse) as that of Guidant? And if the latter, where does the supposed incentives of the modern-day product liability system come from? Advertisements in Google keyword searches (see also yesterday) suggest that the plaintiffs' bar is already jumping on this as a mass tort. Of course, individual plaintiffs' attorneys have no incentive to treat a good-behaving corporation differently than a badly-behaving corporation: so long as there is the possibility of finding documents to take out of context to make the former seem like the latter, so long as for-pay experts are willing to testify as to the dastardliness of the defendant, and so long as juries look only at individual cases in isolation from the larger public policy questions, the two types of cases are indistinguishable in likely profitability. Which suggests somewhere else where incentives can be changed.