Brent Wouters Addresses the Continued Need for Product Liability Reform

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. 

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