Overlawyered

Ted, please stop misrepresenting my purported misrepresentations. The October 3rd and 25th posts weren't even my posts. As for the September 26th post: If you really want to continue to argue that we should first focus on "fixing" the liability system before we try and overhaul the broken technology systems in use in the healthcare industry, we'll just have to agree to disagree. I believe that we need to take advantage of advances in technology and eliminate inefficiencies in the healthcare system before we look at changing the liability system.

I'm in the process of reading the 56-page Schwartz article now. It casts doubt on the authenticity of the memo, but admits that similar cost-benefit analyses probably occured. Even if you take the Pinto out of the argument entirely, my premise is true: Capping noneconomic damages increases the probability of a manufacturer releasing a dangerous product.

On the subject of damage caps: What dollar amount do you think is fair for a cap on noneconomic damages? This isn't some sort of a trick where I'm going to come back and retort, "You mean you only think (insert horrible death or injury) is ONLY worth X?" to try and make you look like an insenstive ass.

I'm just curious if you fall into the $250k camp, $500k camp, etc. I'd also like to know if you believe caps should apply in cases of intentional torts.

I believe that we need to take advantage of advances in technology and eliminate inefficiencies in the healthcare system before we look at changing the liability system.

Aside from the fact that the liability system is an inefficiency in the healthcare system, curing the liability system is hardly mutually exclusive with improving technology; in fact, curing the liability system makes it easier to improve technology by reducing the cost of innovation. See also Tyler Cowen's column today.

Lane, rather than engage in real debate, regularly presents false dichotomies like that one. It's why I'm coming to agree with Erik Bell and private correspondents that we should be ignoring his site.

Justinian is right. A cap on non-economic damages WILL increase the cahnce that a dangerous product will be introduced.

In fact, if we can make the risk of large, non-economic damage awards high enough, we can probably prevent ANY product from being introduced.

I'm in the process of reading the 56-page Schwartz article now. It casts doubt on the authenticity of the memo, but admits that similar cost-benefit analyses probably occured. Even if you take the Pinto out of the argument entirely, my premise is true: Capping noneconomic damages increases the probability of a manufacturer releasing a dangerous product.

(1) What manufacturer wouldn't do a cost-benefit analysis? Again, a car maker could make an almost perfectly safe vehicle: it's called the Sherman tank.

(2) Does capping noneconomic damages "increase[] the probability of a manufacturer releasing a dangerous product"? Under some conditions, on the margins, of course. But also, of course, such caps (a) reduce the cost of innovation, as Ted notes; and (b) lower the cost of manufacturing new, typically safer, products -- thus facilitating their diffusion. The question, then, is which of these effects predominates. The answer, based on work spanning the decades, from Priest's in the 80s to Viscusi's in the 90s to Rubin and Shepherd's last year, seems to be that the benefits of tort reforms tend to outweigh the costs.

But I forget -- you don't like cost-benefit analyses.

Jim, you assume that manufacturers want to release safer products. Look at what happened with Oraflex and with the Firestone Tire/Ford Explorer problems. In both instances, the manufacturers had time to correct, recall, or replace the defective products... but they didn't.

Is it really that much of a stretch to think that in the same world that saw Enron, Worldcom, and all the others that a manufacturer would choose to kill a few customers to make a buck?

Even if such instances occur only "on the margins," those are still deaths that could have been prevented with the deterrent effect of the tort system.