There has been a lot of debate about the need for corporations to be held accountable in case their products are misused by the customers. Proving cause and effect in this case is not easy task; though there have been several cases where corporations have been sued for such reasons. In my opinion, corporations should not be held liable for damages in case of blatant product abuse, if effort has been made by them to make consumers aware of potential dangers of the products.
An example worth exploring here is that of McDonalds and other fast food chains, which have in the past been sued by consumers for promoting obesity. The verdicts in these cases, and ‘Common sense consumption’ laws in 26 states across the US support the point that corporations cannot be held responsible for the wrong choices of the consumers if important information is not withheld on purpose. It would be wrong to pin the blame of an individual’s obesity on a fast food chain if their menu already shows the calories that it offers. In such cases, it is up to consumers themselves to indulge in such a way that does not bring them harm. Similarly, the intended use of a product and what it eventually is used, also needs to be taken into consideration. Many would agree that a corporation selling knives should not be held responsible if the same product is used by an aggressive consumer for violent purposes.
Cases where companies don’t reveal necessary information to the customers is another story and should be treated in a different manner. A car company which hides essential safety features such as the faulty Takata airbag inflators in the case of Volkswagen, Fiat and General Motors do warrant legal action. However, an accident caused by over-speeding or driving recklessly has nothing to do with the car manufacturing company. Such losses are purely due to consumer neglect and in my opinion, the corporations should not be held liable in such instances.
Holding companies responsible for product misuse by customers also increases the cost of doing business exponentially. This is due to an increase in the legal costs faced by the manufacturers which in turn translates into higher product prices for the consumers. Furthermore, such lawsuit expenses have also led to companies scaling down their operations and laying off their workers, which in the long run is detrimental for the economy
Holding companies responsible for product misuse by customers also increases the cost of doing business exponentially. This is due to an increase in the legal costs faced by the manufacturers which in turn translates into higher product prices for the consumers. Furthermore, such lawsuit expenses have also led to companies scaling down their operations and laying off their workers, which in the long run is detrimental for the economy. Pharmaceutical companies have been hit the hardest due to the possibility of such lawsuits. Fears of product liability claims have resulted in many life-saving drugs being left off the market as it does not make economic sense to spend so much on research and development just to be sued later for unanticipated side effects. Similarly, experts in the field believe that one of the major obstacles for newer vaccines such as the one anticipated for AIDS is that it will never be available in the market unless it is given immunity from lawsuits.
In a free market system, corporations should ideally have the right to sell their products and consumers should have the right to buy whatever they want. However, this needs to be done in a responsible way where there is no information asymmetry. The customers should always have the right to sue companies for defective or dangerous products, or in cases where important information is withheld from them on purpose. It is the responsibility of the manufacturer to make the consumer aware about the ill effects of a product, but it should not bear the responsibility in case of blatant misuse by the consumers despite these warnings. Also, there is no way that a manufacturer can know about all the possible avenues of misuse or side-effects of a product especially in case of pharmaceutical drugs or scientific research. In such instances, due diligence should be done, and the customers should be informed about the potential risks. Making the company accountable for the side effects despite such disclaimers would discourage other similar corporations and would be deleterious for economic growth. In such a scenario, both the corporations and the consumers have rights and safeguard strategies, making it a win-win situation for the economy.
I strongly support the view that corporations should not be held responsible for consequences which result because of gross misuse of their products by the customers, especially in cases where enough effort has been made by manufacturer to make the consumer aware of the potential risks associated with using the product. Entertaining such lawsuits would only end up crippling the economy and discouraging innovation as most corporations are risk averse by nature. Furthermore, also the responsibility from consumers will be taken away to act sensibly and to ensure that they are using the product for its intended purposes.
The writer is a LUMS Graduate currently working as a consultant with the Primary and Secondary Healthcare Department, Government of Punjab
Published in Daily Times, December 20th2018.