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Date: Tue, 25 Sep 2007 13:22:45 -0400
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Subject: RE: product liability
In-Reply-To: <list-2350391@logan.com>
Thread-Topic: product liability
Thread-Index: Acf/Wvt8uYu2TYOgRbGa1AdMULnCJwAM3PeQ
From: "Halle, John" <JJHALLE@stoel.com>

=20
I wanted to put in my two cents worth on the subject.  I am a lawyer
(although not a products liability lawyer or even a litigator of any
kind) but I regularly advise clients facing or trying to avoid
litigation.  I also have been flying a Legacy since June 9th, 2001.

Let's start with something I say at least once a week to clients:  "This
is America; anyone can sue anyone."  That is true if you own or sold an
airplane, have a sidewalk that someone slips on, perform free cosmetic
surgery on a patient who is not pleased with the result, tell someone at
a party to buy a stock that goes down, buy a company that had operated
printing presses built in 1880 that failed to protect the operator from
catching her hair in the rollers (I swear I am not making these things
up) or just got someone peeved at you (a certain kind of person but
there are a lot of them out there.)  The reasons you have insurance are
two: first, it will provide a defense and second, it will provide enough
cash for settlement that, at least in a case that has problems for the
plaintiff, is likely to be enough to settle with, possibly with a
contribution from the defendant that the defendant (or his/her estate)
can live with.  A defendant that is wealthy beyond belief and clearly at
fault cannot be protected by any normally available insurance.

All of us apparently accept that risk while we are flying (else why are
we flying airplanes we built?)  The question comes up whether the risk
is acceptable in the context of a sale of the airplane to someone else.
First let me say that the risk immediately becomes much smaller because
the possibility of liability based on pilot error (what causes darn
nearly all GA crashes) is eliminated.  That leaves design error (which
itself is limited to things that the builder changed from the kit or
plans) and construction error.  I admit that a builder who sells the
airplane immediately or shortly after having finished building it is at
some significant risk of a construction error claim.  On the other hand,
I have been flying my airplane for 6+ years and have 600+ hours on it.
While it is theoretically possible that a construction error could still
cause a crash, it is statistically extremely unlikely.  More important,
it is likely to be very difficult to prove which, under normal
circumstances, is likely to induce plaintiff's counsel to settle for
what he can get (which, as noted above, will be at most something from
the insurance company and something from the defendant that does not
break the bank.)  The very wealthy can, of course, hire armies of
lawyers who can tie plaintiff's lawyer up in knots, vastly increase the
time and expense necessary to prosecute the case (bearing in mind that
plaintiff's lawyer is on a contingency and lives by maintaining a clear
and productive relationship among effort, risk and potential return) and
greatly increase the chances that plaintiff will lose.

The other thing that affords protection on sale is a well-drafted sale
agreement.  There are a number of them out there and they can cause
plaintiffs' lawyers fits before they can even get to the question of
what caused the crash.

We are all comfortable with risk or we would be playing golf instead of
flying airplanes.  The risk of loss from a liability claim following
sale of the airplane seems to me to be one of the smaller risks that our
avocation imposes on us.  Insurance helps mitigage the risk, as does a
good sale contract and a history of operations that causes a
construction defect claim to be difficult to establish.  None of those
things eliminate the risk, just as nothing a pilot can do, short of
keeping the airplane in the hangar, eliminates the risk of an accident.
That said, the idea of cutting up, parting out or just leaving a
perfectly good airplane to rot somewhere seems to me to be an
overreaction to a mostly theoretical problem.

If you designed your own wing, are the only person in history to try to
run a Buick engine in your setup, designed and built a purpose built
Reno racer or tried to get the thing built in six weeks by cutting every
possible corner, disregard the above.