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Full-Text Articles in Consumer Protection Law
Outsourcing Regulation: How Insurance Reduces Moral Hazard, Omri Ben-Shahar, Kyle D. Logue
Outsourcing Regulation: How Insurance Reduces Moral Hazard, Omri Ben-Shahar, Kyle D. Logue
Michigan Law Review
This Article explores the potential value of insurance as a substitute for government regulation of safety. Successful regulation of behavior requires information in setting standards, licensing conduct, verifying outcomes, and assessing remedies. In various areas, the private insurance sector has technological advantages in collecting and administering the information relevant to setting standards and could outperform the government in creating incentives for optimal behavior. We explore several areas that are regulated more by private insurance than by government. In those areas, the role of the law diminishes to the administration of simple rules of absolute liability or no liability, and affected …
Torts And Innovation, Gideon Parchomovsky, Alex Stein
Torts And Innovation, Gideon Parchomovsky, Alex Stein
Michigan Law Review
This Essay exposes and analyzes a hitherto overlooked cost of tort law: its adverse effect on innovation. 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, 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.
Torts - Liability Of Supplier Of Chattel - Proof Of Manufacturer's Negligence, Whitmore Gray
Torts - Liability Of Supplier Of Chattel - Proof Of Manufacturer's Negligence, Whitmore Gray
Michigan Law Review
Plaintiff service station operator brought an action to recover for injuries resulting from the explosion of one of defendant manufacturer's tires. The tire, while admittedly new, had been purchased by a third party some eighteen months before being brought to the plaintiff for mounting. In addition to his own testimony, the only evidence supporting plaintiff's claim of negligence was expert testimony that such an explosion could be caused by defective wire in the bead when a tire was inflated to normal pressure, and also that there was opportunity for negligence in defendant's manufacturing processes. The district court set aside the …