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By Stephen Presser, Professor, Northwestern University School of Law, 02-2002

The following is taken from the executive summary for a paper authored by Professor Stephen Presser for the Manhattan Institute Center for Legal Policy, How should the Law of Products Liability be Harmonized? What Americans Can Learn from Europeans, Manhattan Institute Global Liability Issues 2 (2002):

Even though the European Community recently altered its tort doctrines from a pure fault-based system to strict products liability, there are features of the European legal system that lessen the effects of even strict liability. Consequently, European courts are much less likely to hand out unpredictable and disproportionate damage judgments-unlike American courts, where ruinous verdicts are a potential in too many lawsuits. Europe has escaped an American style litigation explosion by erecting barriers to excessive litigation. Such barriers include:

 · Absence of contingent fees
 · Loser pays winner's attorney fees
 · Discouragement of massive discovery filings
 · Lower damage judgments
 · Absence of punitive damages
 · Non-use of juries in civil cases
 · Lower expectations of damages

Unless similar barriers to excessive litigation are created in the U.S., American companies face an ongoing competitive disadvantage relative to European manufacturers who operate in a more predictable, less costly, and less litigious legal environment. In one case, probably typical, Dow Chemical Corporation estimates that it spends 100 times as much on litigation costs in the U.S. as opposed to Europe.

America prides itself on being the world's pre-eminent economic superpower, but if American economic preeminence is to survive in a highly competitive global marketplace, there must be changes in the American legal system. We should seek to reproduce here some of the features of the European system of litigation. It is time, in short, to give American firms the same legal protections that European firms enjoy, rather than waiting for Europeans to harmonize their legal systems with their aberrant American cousins.

In the course of our efforts to reshape the way Americans think about product liability law it will be necessary to examine, question, and eventually correct the way in which American courts have-over the last thirty years-usurped the law-making function of American legislatures. Achieving these changes will not be easy. However, critical reflection on the legal culture of the United States should begin with a global perspective on products liability law. Much work remains to be done in this vein: in particular there is a great need for empirical research and outreach education to American consumers, investors, and workers about the actual nature of the American Civil Justice System and its deficiencies compared to those found in other parts of the globe, particularly in Europe.

Harmonization of the American Civil Justice system with the European model must be achieved, however, if American manufacturers are going to be able to compete effectively in the global marketplace and if American consumers are going to continue to enjoy the benefits of technological innovation.



Published by the Manhattan Institute

The Manhattan Insitute's Center for Legal Policy.