The Peculiar Challenges Posed by Latent Diseases Resulting from Mass Products

Abstract:     
Legal actions against manufacturers of products that cause latent diseases, such as asbestos products, cigarettes, lead-pigment, and Agent Orange, are the signature torts of our time. Yet within this rather important subset of tort liability, it is unlikely that the imposition of liability actually results in loss prevention. Three factors, present in varying combinations in the context of latent diseases resulting from product exposure, frustrate the deterrent impact of liability. First, an extended period of time - sometimes decades - passes between the time of the manufacturer's distribution of the product and the imposition of liability. Second, the accident compensation system frequently is unable to attribute liability for damages to the activity that caused the harm. Third, activities of parties other than the product manufacturer generally are necessary contributing causes to the victim's latent disease. It is not axiomatic that the manufacturer is the cheapest cost avoider; indeed, the determination of the cheapest cost avoider may depend upon cultural attitudes, not value-neutral economic analysis. The questionable ability of the tort system to fulfill its loss avoidance objective suggests that compensation for latent diseases should be handled by an administrative no-fault compensation system and that legislative or administrative regulation must play a larger role in preventing such harms.

Number of Pages in PDF File: 70

Keywords: latent diseases, mass product torts, deterrence, loss minimization, loss avoidance, Calabresi, no fault compensation, multiple tortfeasors, market share liability, tobacco, asbestos, childhood lead poisoning

JEL Classification: K13, K32

Accepted Paper Series