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Product Liability Issues in the U.S. and Associated Risk
Management576
26.1 Introduction
Autonomous vehicles (AVs) hold the promise of saving tens of thousands of lives each year
in the U.S., and many more worldwide, reducing traffic, saving energy, and providing
mobility to those who cannot drive conventional cars. Nonetheless, AVs will inevitably
have some accidents. On balance, AVs are likely to prevent many more accidents than they
cause, but there will be at least some accidents involving AVs that would not have occurred
with conventional vehicles.
Because of accidents involving AVs, some of which may be catastrophic, product liabil-
ity litigation1 is inevitable, especially in cases where conventional vehicles would not have
crashed. The threat of massive product liability litigation involving AVs is widely perceived
as one of the chief obstacles to AV development and sales, if not the number one threat [3].2
Some believe that product liability suits may be an existential threat to autonomous driving
[33].3 Crippling suits could force manufacturers to exit the market and may deter some
manufacturers from entering the market because of a belief that the sales are not worth the
risk. If these dire predictions come to pass, the U.S. and other parts of the world experienc-
ing a flood of lawsuits may lose the use of a technology that would save many times more
lives than it would endanger. If, however, the industry finds effective ways to manage the
risk of product liability, it can bring to market a lifesaving technology while maintaining
practices to minimize accidents and resulting liability, as well as the profitability needed to
offer AVs in the market over time.
The purpose of this chapter is to identify product liability risks in the U.S. to manu-
facturers of AVs, the source of those risks, and how manufacturers can manage those risks.
A focus on U.S. product liability is important from a worldwide manufacturer’s perspective
given the size of the U.S. market and the perception that the U.S. is a litigious country.
Product liability is perceived as a greater threat in the U.S. than in any other country of
the world. Section 26.2 discusses the circumstances giving rise to U.S. product liability
litigation and the phenomenon of some U.S. cases resulting in huge awards to plaintiffs
seeking compensation. It explains why these huge awards occur. Section 26.3 analyzes
the human and financial impacts of more recent high profile product liability cases.
Section 26.4 discusses U.S. product liability law, focusing on the types of claims and
defenses arising in product liability cases. Section 26.5 covers design practices and
procedures that manu
facturers can use to reduce the risk of product liability, the use of
1 This chapter focuses mainly on product liability litigation, although there are also requirements
to compel vehicle manufacturers to recall their vehicles to fix defects. The management of
liability and recall risks overlap and the risk management principles discussed in this chapter
apply to both.
2 “Some of the largest obstacles to autonomous consumer vehicles are the legalities [3].” Reports
from Lloyd’s of London and the University of Texas listed product liability as among the top
obstacles for AVs [21] [30].
3 “[T]he worst outcome would be that said liability isn’t sorted out so that we never do get the mass
manufacturing and adoption of driverless cars.” [33]
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