Research Paper on "Business Law Products Liability and Negligence"
Research Paper 3 pages (1000 words) Sources: 0
[EXCERPT] . . . .
Business LawProducts Liability and Negligence: With the evidence that Vioxx leads to an increased heart risk of heart attack and stroke, Merck is facing the issue of product liability. Product liability, a tort of negligence, holds manufacturers liable for negligently made goods that harm consumers. Manufacturers must meet the standard of care for reasonable manufacturers in the design, manufacture, and marketing of a product. With respect to Merck, this applies to a failure to warn of a danger of using Vioxx. Merck may be liable under this tort because it owes a duty of care to the users of the medicine and it is foreseeable that carelessness by Merck would impact that group. If the court finds that Merck was careless and did not meet the duty of care, it will be held liable for the damages to the plaintiffs. Competitors selling similar products with warnings may be considered evidence that Merck is not meeting the standard of care for a manufacturer in its industry. In some countries, if there is a defective product, Merck would be held strictly liable without consideration of negligence. Thus, depending on jurisdiction, liability may differ.
Categories of Damages: The four categories of damages Merck may have to pay are pecuniary, nonpecuniary, punitive, and aggravated. Pecuniary damages compensate for incurred, out-of-pocket losses, loss of future income, and cost of future care. Individuals that took Vioxx and suffered a heart attack or stroke could ask for payment for care and loss of income. Nonpecuniary damages compensate for pain and suffering, loss of life expectancy, and loss of enjoyment of life. The plaintiffs against Merck could claim to have lost life expectan
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Dispute Resolution and Litigation: Merck is facing a large number of lawsuits and the 20 that have been settled have already exceeded Merck's annual profit. Litigation is time-consuming with a number of steps including pleadings, discovery, trial, and appeals. These all incur attorneys' fees which quickly add up. Alternative dispute resolution may be a viable option for Merck. Their options are negotiation, mediation, and arbitration. Negotiation can be used to settle each of the cases, but those have already cost almost $5 billion. Mediation uses a third party that helps reach a compromise, which may help find a lower-cost solution that satisfies some of the claimants. Arbitration is binding and has a third party hear the dispute and make a ruling, similar to that of a court, but without the same extent of procedure. By… READ MORE
Quoted Instructions for "Business Law Products Liability and Negligence" Assignment:
“Do both of the following questions:
1. (Value 20 points). Merck & Co. is the fourth largest pharmaceutical company in the world. It developed and tested an effective painkiller called Vioxx that was particularly helpful to those suffering from arthritis. The drug was approved by the regulatory authorities and put on the market in 1999. Over the next five years it was taken by 20 million patients, generating $2.5 billion in sales and 11 percent of Merck*****s revenue each year. In 2004, a report was released indicating an elevated risk of heart attack and stroke among those who took Vioxx for 18 months or longer. Merck decided to withdraw Vioxx from the market. Subsequently Merck was named as defendant in over 27 000 lawsuits involving Vioxx. Twenty of the cases went to trial, most of which were won by Merck, but Merck*****s legal costs exceeded $1 billion. In 2007, Merck negotiated a settlement of all lawsuits totalling $4.85 billion. The total represented less than Merck*****s annual profit and provided claimants an average of $100 000. Meanwhile, Merck*****s competitors continue to sell similar drugs with severe warnings on the packages regarding possible health risks.
Discuss the following course topics in the context of the situation above:
*****¢ Products liability and negligence
*****¢ Categories of damages
*****¢ Dispute resolution and litigation
*****¢ Class actions
*****¢ Legal risk management
2. (Value 10 points). From the business torts discussed in Chapter 12, choose one from *****Torts and property use***** and one from *****Torts from business operations*****. In your own words, explain the tort, what a plaintiff must prove to claim on the tort, how a defendant can resist the claim, and how the risk of liability on the tort can be managed. Give an example of each tort.
TEXTBOOK
Title
Canadian Business and the Law
Author DuPlessis, Enman, Gunz, O*****'Byrne
Edition 4th
Year 2011
Publisher Nelson Education
How to Reference "Business Law Products Liability and Negligence" Research Paper in a Bibliography
“Business Law Products Liability and Negligence.” A1-TermPaper.com, 2011, https://www.a1-termpaper.com/topics/essay/business-law-products-liability/1906. Accessed 1 Jul 2024.
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