Tuesday, May 7, 2013

A really serious discussion of Torts and Innovation


Torts and Innovation, making Torts welcoming to innovation

The SSRN summary:

Tort liability for negligence, defective products, and medical malpractice is determined by reference to custom. We demonstrate that courts' reliance on custom and conventional technologies as the benchmark of liability chills innovation and distorts its path. Specifically, the recourse to custom taxes innovators and subsidizes replicators of conventional technologies. We explore the causes and consequences of this phenomenon and propose two possible ways to modify tort law in order to make it more welcoming to innovation.

A similar but different point of view.

When Less Liability May Mean More Precaution: The Case of Nanotechnology

The SSRN summary:

The heart of the Article is an exploration of the possible role of common law tort liability in both encouraging and deterring voluntary, precautionary study of new products generally and nanotechnology products in particular. A key variable in considering liability’s role as an incentive or deterrent to testing is the manufacturer’s subjective assessment of the probability that any injuries from its product would be detected by the injured parties and successfully attributed to the product absent research by the manufacturer itself on the adverse effects of the product. Another key variable is the legal standard for tort liability, and specifically how the applicable standard falls on a spectrum from the imposition of liability on manufacturers only for known risks on the one hand to the imposition of liability even for risks the manufacturer could not have reasonably foreseen on the other. The lower the perceived probability of detection without manufacturer research and the more the applicable liability standard veers toward requiring actual knowledge of risks on the part of the manufacturer, the more likely it is that the ex ante threat of liability will lead a manufacturer to choose not to conduct research into possible adverse effects, either before the product is marketed or once it is on the market. Consideration of these two variables in the nanotechnology context would tend to suggest that liability considerations indeed may be discouraging research into possible adverse effects of nanotechnology products under development and already on the market.