Product Liability:

Verdicts and Case Resolution in Five States

HRD-89-99: Published: Sep 29, 1989. Publicly Released: Nov 15, 1989.

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Pursuant to a congressional request, GAO provided information about 305 product liability cases resolved in 5 states between 1983 and 1985, focusing on: (1) compensatory and punitive damage award amounts; (2) courts' use of negligence and strict liability standards to determine liability; (3) post-trial activities and plaintiff payments; (4) litigation time and cost; and (5) the possible impact of proposed federal product liability legislation on the outcomes of court cases and on the variations in laws across states.

GAO found that: (1) 45 percent of cases resulted in compensatory damage awards to plaintiffs, with $1 million or more awarded only in cases involving death or permanent disability, and temporary disability awards averaging $78,000; (2) 23 cases resulted in punitive damage awards, which generally highly correlated with the compensatory damages; (3) appeals and post-trial settlement negotiations resulted in a 43-percent reduction in total award amounts, with reductions occurring in 50 percent of plaintiff-won cases and 71 percent of cases with awards exceeding $1 million; (4) appellate courts reversed or remanded for retrial all 12 punitive damage awards on which they ruled, and also reversed one compensatory damage award; (5) cases averaged almost 2.5 years to move to trial, with appeals adding an average of 10 months to case completion; (6) plaintiff attorneys typically charged costs on a contingency-fee basis, receiving an average of 35 percent of clients' recoveries; (7) defendant attorneys typically charged on an hourly basis and received fees ranging from $1,500 to $400,000, with a median of $20,000; (8) defendant negligence was the basis for liability in about two-thirds of plaintiff-won cases; and (9) while most of the proposed federal reforms for enhancing uniformity of product liability standards across states would have affected few of the reviewed cases, proposed reforms to reduce awards by degree of plaintiff responsibility or workers' compensation would have potentially affected several awards.

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