Liability Law

Unlike antitrust law, liability law is seldom cited as an official reason for doing anything in the private sector. Yet the case studies suggest that liability is a more significant factor than antitrust law in explaining regulatory behavior. Liability concerns help explain why so many provisions in NFPA 61B are vague and why, in both 61B and 408, NFPA pushes the distinction between "requirements" and "appendices." More generally, liability law seems to explain the reluctance of the private sector to (1) recognize or address issues of consumer misuse, (2) embrace certain new technologies, and (3) include work rules or operational controls in safety standards.

Turning first to misuse: incorporating misuse considerations into standards can nullify the one effective defense to product liability suits that product certifiers and manufacturers still retain in some states—the misuse defense.^[35] This defense works only if the plaintiff's use of the product was unforeseeable to the manufacturer. Accordingly, the more misuse is acknowledged in standards, the more manufacturers and product certifiers might be held responsible for it (no matter how impossible the task). In other words, because of liability law it is not in UL's interest to think too much about potential consumer misuse.

There is a similar reluctance to adopt certain new technologies. The failure of a new safety device might leave a manufacturer or certifier in a worse legal position than if it had not addressed the problem to begin with. The argument, advanced to explain the slow diffusion of antilock braking technology, appears to explain the reluctance to require the ODS for gas space heaters. Committee members admit privately that data on failure rates of the device in Europe were considered legal dynamite.^[36] Even if it significantly reduced the number of carbon monoxide deaths, as expected, manufacturers worried that the occasional injury it failed to prevent—as a result of equipment failure or poor maintenance—would be seen as the fault of the manufacturer, not the consumer.

Standards-setters also worry that "upgrading" a standard leaves existing products more vulnerable to product liability suits. Improvements can be cited in some jurisdictions as evidence that the old standard was

inadequate. When, as in the case of UL's metal chimney standard, hundreds of thousands of products manufactured under the existing standard are still in use (and will be for many years to come), there is considerable reluctance to "upgrade" the standard. This reason, admitted privately by UL officials, makes much more sense than the stated concern about excluding low-tolerance chimneys from the market.

Finally, liability concerns help explain why the operational controls were placed in the appendices of NFPA 408 and 61B. Technical and engineering standards are much easier to control. Third-party certification assures compliance with many product standards. Compliance with other provisions in NFPA 408 and 61B involves fairly discrete acts—carrying a certain type and number of fire extinguishers, attaching devices to converyor belts in grain elevators, using specified building materials. Operational controls, on the other hand, require unfailing implementation. They are dependent on the goodwill and reliability of employees. They are also where corners are likely to be cut in the face of various economic pressures. Either way, liability fears apparently keep the private sector from mandating operational controls.