Limited Liability & Safety

Car manufacturers claim that “frivolous lawsuits” are forcing them out of business, but their logic is fuzzy at best and disdainful at worst. Complaining that injured victims are hurting your bottom line while demanding to continue injuring those victims with immunity is callous. When manufacturers rail against our civil justice system, they’re basically saying, “We shouldn’t be held responsible for our mistakes.” Does that seem fair to you?

Fair or not, it hasn’t stopped manufacturers from trying to take away your rights. As a condition of the auto bailout, Chrysler and GM demanded that they receive immunity from any future liability suits, threatening that without it, they would be forced into liquidation. If they had their way, manufacturers would have been permitted to make dangerous vehicles without any fear of liability. Rightfully so, consumers pushed back, and the companies reluctantly changed their position. Though they conceded that they could pay future damages, they demanded immunity from any claims filed before their bankruptcy. And as simple as that, more than 1,000 victims had their claims dismissed.

Unfortunately, safety concerns get lost in the tort reform shuffle. In their attempt to demonize lawsuits, corporations and insurers neglect to mention the point of civil claims: to make us all safer. History has shown that lawsuits act as a deterrent against negligence. It’s difficult for a company to continue its irresponsible behavior if it’s been called to account for it in a court of law. Often, lawsuits are the only means for regulators to learn about dangerous vehicles. In its “Lifesavers” report, the Center for Justice & Democracy cites the Ford Explorer/Firestone Tire case. Even after numerous deaths and injuries, the National Highway Transportation Safety Administration didn’t begin an investigation until consumers, alerted to the situation through media reports, pressured the agency to. According to the CJ&D report, “[H]ow did the story finally come out, with Ford and Firestone in deep denial and the NHTSA overwhelmed and short-staffed? The answer is that a group of personal injury lawyers began filing lawsuits – and eventually succeeded in bringing the problem tires to public attention.”

Tort reform advocates claim limiting access to our courts is a savings silver bullet, but the truth is that lawsuits save us more money in the long run. For every lawsuit filed in response to a defective auto, countless potential victims are saved. Safer vehicles mean less accidents, and the ultimate benefit is billions of dollars in medical expenses, property damage, and wage losses saved.

And don’t just take our word for it that lawsuits make cars safer – data backs us up. One of the foremost authorities on the use of empirical analysis in legal scholarship, Theodore Eisenberg, recently published, “The Empirical Effects of Tort Reform.” His research concluded that:

Liability considerations were a sufficient condition or a contributing factor to at least fourteen important auto safety improvements, including inadvertent vehicle movement, fuel tank design, occupant restraints, and all-terrain vehicle restrictions.

If manufacturers didn’t have to worry about pesky lawsuits from injured consumers – and the bad publicity and legal costs that come with them – some of the most important safety fixes in the auto industry would never have come about.

Limiting liability for irresponsible manufacturers won’t save anyone money – except those same irresponsible manufacturers. Instead of investing in safety, they’ll save money by bypassing standards. When their less-than-safe vehicles hit the roads and cause injuries, they’ll save money in litigation costs by bypassing our civil courts. With manufacturers off the hook, who will end up picking up the tab? Taxpayers. Looser safety standards will increase injuries, and increased injuries will lead to increased medical bills. Without the ability to pursue compensation in our courts, victims will be forced to turn to social services for the help they need, further burdening taxpayers. Shouldn’t irresponsible manufacturers pay for the results of their cost-cutting?