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Thu, Jun 17, 2010

Classic Aero-TV: Product Liability – Cirrus CEO at NBAA 2009

Brent Wouters Addresses the Continued Need for Product Liability Reform

The ANN and Aero-TV crews are now readying to cover the very First Annual Cirrus owner's and Pilot's Association 'Migration' that will not be held in Cirrus' home town of Duluth, MN. This time, the event is to be held in the historic environment of Dayton, OH... with all the 'Wright' overtones adding to what appears to be a great year for the annual gathering. ANN is teaming with the COPA team to produce quite a bit of coverage of this event, and will also be hosting LIVE Aero-TV streaming Friday and Saturday of a number of the pivotal events, speeches and meetings. Please enjoy a look back at recent Cirrus coverage while the ANN/Aero-TV crew works its magic in Dayton, where we have some GREAT things in store for you in the coming days!

In the 1980s, the general aviation industry was brought to its knees by an explosion of product liability lawsuits.  Industry representatives estimated that the cost of litigation added $70,000 to each new aircraft; the financial blow resulted in widespread plant closures and bankruptcy. GAMA reported a staggering decrease in single-engine piston aircraft production from 13,286 aircraft in 1978 to a mere 1,833 aircraft in 1983. 

The dramatic decrease resulted in an employment drop of sixty-five percent.  With general aviation on the verge of extinction, industry leaders successfully lobbied for the General Aviation Revitalization Act of 1994. The law implemented a statue of repose, limiting manufacturer liability exposure to 18 years. Though it was a crucial step in reform, leading to the revitalization of general aviation in the 1990s, significant problems continue.

The financial burden of liability insurance premiums raised twice the rate of inflation in recent years, and the threat of litigation remains an ever-present problem for G.A. manufacturers.  In order to sue, a plaintiff must prove two things. First, they must prove that a company was negligent due to design defect, manufacturing defect, or a failure to warn (by not providing adequate instructions or specific warnings of danger). 

In other words, litigants can still seek damages against a manufacturer despite a company’s product passing rigorous FAA certification.  Second, a plaintiff must prove that said negligence led to a crash. Although it is reported that roughly three quarters of all aircraft accidents are classified as pilot-caused, NTSB findings remain inadmissible in civil court, rendering manufacturers unable to appropriately defend themselves against such claims.

It is no wonder, then, that in the current economic crisis that aviation faces, industry leaders are once again pushing product liability reform to the forefront.  The continued financial burden of insurance premiums and litigation places a stranglehold on company growth and development. 

 

Join Aero-TV as we speak with Cirrus CEO Brent Wouters about how product liability affects his company, and why reform is more crucial now than ever. 

FMI: http://www.allbusiness.com/legal/922323-1.html, http://www.atra.org/issues/index.php?issue=7341, http://www.aero-tv.net, http://www.youtube.com/aerotvnetwork, http://twitter.com/AeroNews

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