The GM recall hearings, the Toyota recall hearings, the Firestone recall hearings. The parade of hearings about manufacturers who knew and did nothing, and regulators who dropped the ball on safety reports, lead us all to one inevitable question: What does it take to force manufacturers to put people over profits and to improve the safety of their products? The answer is a robust and independent civil justice system.
The Ford Pinto is a perfect example. The design of the Ford Pinto left its gas tank unprotected and, as a result, the car was prone to exploding in even minor rear-end accidents. The car’s design met all government standards at the time. Ford knew about the problem and knew it could be fixed for as little as $11 per car. However, Ford decided it would be more profitable to sell the car as designed and let the inevitable injuries occur. In Grimshaw v. Ford Motor Company (1981) an award of $125 million in punitive damages (later reduced) was paid to the victims of a Pinto explosion. Indeed, even former General Counsel for Chrysler acknowledges that litigation caused manufacturers to redesign the placement of gas tanks.
Fast forward to this January. GM recalled 2.6 million vehicles for faulty ignition switches which cause the moving automobiles to unintentionally turn off and thereby disable the airbags. GM acknowledges it detected the problem in 2001 when it conducted pre-production testing for the Saturn Ion. In 2005, GM rejected an internal proposal to fix the problem because it would be too costly and take too long. Current estimates are that repairing the defective switches would have cost $2 per switch. GM has now linked the defect to at least 13 deaths, but attorneys representing the families of deceased victims place this number much higher. Now GM is trying to avoid having to defend its actions in civil courts by invoking a liability shield it gained in its 2009 bankruptcy and federal bailout instead of offering a compensation fund.
In the past, manufacturers have had knowledge about numerous design safety issues such as seatbelt design defects, roof strength and roof crush inadequacies, tire failure issues, and general crash worthiness, but decided not to alter designs to address these issues because of expense and because federal safety standards did not require it. After lawsuits involving these issues were filed, however, many of these design defects were addressed. As a result, we need a system where federal safety standards and regulations work in conjunction with a vigorous and independent civil justice system. This is because the civil justice system serves to enforce existing standards, shine a light on concealed defects and regulatory weaknesses, and deter manufacturers from cutting car safety corners to increase profits.