Consumer Product Safety

1
Consumer Product Safety
2
The Problems

• Inherent presence of risk
• Complexity of consumer products
• Credence goods
• Difficult to prevent
• Determinants of the causes of most consumer
  injuries
• reducible?
• Changing attitudes toward prevention of accidents
  and injuries

3
What Constitutes Acceptable Risk?

• Industry View
• Regulatory View
• Risk are not unreasonable when consumers
  understand risks exist

4
Acceptable Risk May Differ Depending on....

• Risk-aversion
• Markets or user groups
• Normal and abnormal use of product
• Time and circumstances

5
Risk Cost-Benefit Analysis

• Regulatory viewpoint is influenced by three
  dimensions
• probability of injury from a products hazard
• severity of the typical injury when it occurs
• magnitude of injury related to market size

6
Risk Cost-Benefit Analysis
Product Injury Injury Market Level Probabilit
y Severity Size of Risk A .01 1 2,000,000
20,000 B .10 5 100,000 50,000 C .05 3
1,000,000 150,000 D .001 3 10,000,000
30,000
7
Problems in Establishing Risk

• gathering data
• product-related or product-caused
• cause and effect?
• subjective

8
Assessing the costs and benefits of risk

• Monetary costs
• Choice costs

9
New Focus on Product Liability

• Tort Law
• Fundamentals in tort cases

10
Proposed Federal Legislation on Product Liability

• Settling claims
• Set caps
• Time limits
• Higher burden of proof

11
Tools for reducing risk /increasing product
safety

• Premarket notification
• Premarket clearance of products
• In-plant inspection
• Voluntary product standards
• Required product standards
• Post hoc recall
• Cease and desist order