The enforcement of product liability rules: A two-country analysis of court cases

Abstract

The objective of this paper is to outline a new approach to analyzing and comparing legal systems. The approach centers on the statistical analysis of 107 product liability court cases from the United Kingdom and 211 cases from Germany. An elementary analysis of which cases go to court provides a basic understanding of the process generating the respective sets of cases, and an outline of product liability law in the two countries is presented. The subsequent statistical analysis provides insights into which factors are of the greatest importance for deciding a case in the UK and in Germany, respectively. In the UK the safety expectations and contributory negligence on the part of the victim user are most important, while German law emphasizes the manufacturer’s duties of care. German law thus more closely resembles a traditional tort system. Section 2 presents some elementary insights into the process generating the samples of court cases. Our conclusion is that a case goes to court only if there is a significant divergence in beliefs between the parties involved over the outcome of an eventual court ruling. This disagreement may stem from different information available to the parties about some characteristics of the case or from genuine uncertainty about the legal procedure and the law. Those cases where the two parties have similar beliefs about the outcome of the court case either do not lead to a claim or are settled out of court. Section 3 provides an overview of some elementary features of product liability law in the UK and in Germany. Section 4 presents the data sets of court cases and describes the characteristics of the cases. Section 5 contains the econometric analysis of the UK and German court cases.