ABSTRACT
The U.S. product liability system was designed to alleviate the economic costs that individuals incur due to defective products, including food products contaminated by microbial pathogens. Under current law, consumers who suffer from a foodborne illness can seek monetary compensation for their injuries through the courts. Firms producing these defective products are liable for medical and other costs to ill consumers. Firms may incur other costs such as legal fees, higher insurance costs, and lost market share and profits. Economic theory suggests that foodborne illness litigation is a signal for firms to invest more in food safety, ultimately resulting in a lower incidence of foodborne illness and an increase in general social welfare. However, the vast majority of consumers who experience a foodborne illness do not file a legal claim, or drop or resolve their claim prior to court proceedings, almost always out of public view. Data on legal outcomes for food poisoning lawsuits are scarce, and most available data are for cases that result in jury verdicts. This preliminary study
analyzes a sample of jury verdicts in food poisoning cases in order to assess the economic incentives provided by the legal system for firms to produce safer food.
Introduction Humans may become ill when they eat foods contaminated by microbial pathogens, which include bacteria, parasites, viruses, and fungi and their toxins. Foodborne illness is relatively common in the United States despite intensive efforts to ensure the safety of food products. Most foodborne infections are not particularly severe and typically involve brief episodes of nausea or diarrhea. However, some foodborne infections cause serious or fatal health problems, and about 2 to 3% of these infections result in chronic illnesses, such as reactive arthritis or Guillain-Barré syndrome (Archer and Kvenberg, 1985). The U.S. Centers for Disease Control and Prevention (CDC) recently estimated that foodborne microbial pathogens are responsible for 76 million annual illnesses in the U.S., resulting in 325,000 hospitalizations and 5000 deaths (Mead et al., 1999). Pathogencontaminated foods consequently represent an important cause of unintentional injury and death. In fact, contaminated food products are responsible for more deaths each year than the 15,000 consumer products regulated by the U.S. Consumer Product Safety Commission, which were collectively associated with approximately 3700 accidental deaths in 1996 (U.S. Consumer Product Safety Commission, 1998).
