Washington's Product Liability Act

• Jurisdiction: Washington,United States
• Citation: Vol. 5 No. 01
• Publication year: 1981

UNIVERSITY OF PUGET SOUND LAW REVIEWVolume 4, No.2SPRING 1981

Washington's Product Liability Act

Philip A. Talmadge(fn*)

The Washington Legislature in its 1981 session enacted Senate bill 3158,(fn1) the Tort and Product Liability Reform Act, a comprehensive change in product liability and tort law in the State of Washington. This change, perhaps the most sweeping legislative involvement in Washington tort law in this century, was accomplished after many years of extremely bitter political conflict over product liability and tort reform; Senate bill 3158, however, passed the legislature with little of the acrimony previously associated with the issue. This article explores the involvement of the legislature in product liability and tort reform historically, reviews the legislative history of Senate bill 3158, and discusses the relationship of the changes contained in the Act to the present law of the State of Washington.

I. The Recent History of Product Liability and Tort Reform in Washington

Because of rapidly increasing insurance premiums, concerns about the stifling of technological innovation, and general concerns about liability, the business community and the insurance industry in the State of Washington exerted considerable influence on the legislature of the mid-1970's to examine the questions of product liability and tort law. In 1976, Washington State House and Senate committees held hearings on product liability and the newly elected Insurance Commissioner formed a product liability task force. That task force drafted legislation that was submitted to the legislature in the 1977 session.(fn2) Furthermore, bills dealing with insurance reporting requirements(fn3) and two bills sponsored by the Judicial Council to adopt contribution(fn4) and comparative fault were introduced.(fn5) None of the bills was enacted.

The House Judiciary Committee held hearings on product liability during the interim between the 1977 and 1979 sessions of the legislature. House bill 241,(fn6) introduced in 1979, was the product of those hearings. The bill provided for extensive changes in tort and product liability, but it did not succeed in passing the legislature.

Other bills introduced in the 1979 session included a bill providing for insurance reporting,(fn7) a bill calling for extensive changes in product liability law,(fn8) a bill modeled on the first draft of the Commerce Department's Model Uniform Product Liability Act,(fn9) and a bill establishing contribution among tortfeasors.(fn10) None of these bills succeeded. During the 1979 sessions principal attention focused on Senate bill 2333,(fn11) a fundamental revamping of Washington's tort and product liability law. The bill passed both houses in different forms, but was defeated in the waning hours of the 1979 session when the Senate Majority Leader refused to permit the bill to emerge from the Senate Rules Committee. The senate thereafter passed Senate Resolution No. 140(fn12) at the end of the 1979 session, establishing a Senate Select Committee on Tort and Product Liability Reform to study the tort system in this and other states and to make recommendations to the legislature concerning possible legislation in the area of tort law and product liability law.(fn13)

II. Legislative History of Senate Bill 3158

As chairman of the Senate Select Committee on Tort and Product Liability Reform, the author sought to obtain all available objective evidence concerning the need or lack of need for a product liability law. There was considerable need for objective materials concerning the issue of product liability and tort reform given the rash of charges and countercharges in the debate on product liability and tort reform in the 1979 session of the legislature.(fn14) Furthermore, because of behind-the-scenes negotiations between the various interests concerned with product liability and tort reform in the 1979 session,(fn15) it was also the author's feeling that the process of the senate select committee - should be as open and as public as possible.

The senate select committee directed the committee staff to gather information about product liability and tort reform laws from other jurisdictions. The staff contacted people with expertise in the area of product liability law, product liability insurance, and tort reform generally. The findings and recommendations of the United States Commerce Department's Task Force on Product Liability and Accident Compensation and the closed claim survey of the Insurance Services Office, an independent insurance industry statistical and rate-making organization, were examined very closely.(fn16)

The committee took testimony in a series of public hearings across the state on the issues of product liability and tort reform.(fn17) The committee heard from Professor Victor E. Schwartz, Chairman of the United States Commerce Department Task Force on Product Liability and Accident Compensation, representatives from the Washington State Trial Lawyers Associations, representatives from the Washington Association of Defense Counsel, representatives of the Insurance Services Office in San Francisco, representatives from the insurance industry and various business groups, and representatives from the Washington State Bar Association.(fn18) Nine public hearings were held prior to the 1981 legislative session.(fn19)

Additionally, the senate select committee sent the various insurance companies doing business in the State of Washington a questionnaire concerning their volume of business, profitability, and claims and litigation experience in the product liability field.(fn20) The committee requested information for the years 1973 to 1978.(fn21) Fifteen of the eighteen companies to whom the questionnaires were directed responded to the senate select committee.(fn22)

In general, it was clear from the survey of the senate select committee that there had been a large increase in product liability insurance costs between 1974 and 1976.(fn23) Product liability losses exceeded premiums generally for all companies during the period from 1973 to 1975.(fn24) However, as new rates began to be reflected after 1975, the profitability of most companies improved greatly and only a small number of companies responding to the questionnaire indicated an unacceptable loss/ premium ratio for the years 1977 and 1978.(fn25) Because of the limited participation of businesses in the Insurance Commissioner's program designed to provide product liability insurance to high risk insureds, there did not seem to be as severe a problem regarding the availability of product liability insurance in Washington as was originally anticipated.(fn26) The questionnaire also revealed that the greatest number of product liability claims closed were for amounts under $10,000.00.(fn27)

Because of uncertainties in the development of product liability law in this and other states and relatively high insurance premiums for product liability insurance due to underwriter uncertainty about the risk associated with product liability,(fn28) the select committee felt that a product liability statute was needed to establish clear guidelines for the assertion of a product liability cause of action and to provide a fair apportionment of responsibility for fault among or between tortfeasors. Senate bill 3158, based in part on the Model Uniform Product Liability Act of the United States Commerce Department Task Force on Product Liability and Accident Compensation(fn29) and the Uniform Comparative Fault Act,(fn30) was introduced in the 1981 session of the legislature and passed with little controversy.(fn31)

In attempting to make clear the intent of the legislature with respect to Senate bill 3158, the Senate Select Committee on Tort and Product Liability prepared a draft report with a section-by-section analysis of the bill. That analysis was incorporated into the Journal of the Senate at the time the bill passed the senate. The draft report and the final report of the committee, along with questions and answers on the floor of the senate concerning specific issues of legislative intent, should become part of the legislative history of the Act.(fn32) Furthermore, for those sections based on the Model Uniform Product Liability Law, the section-by-section analysis for the Model Uniform Product Liability Act(fn33) should also be of assistance in interpreting the provisions of Senate bill 3158.

III. Specific Provisions of the Act

A. Definition of the Cause of Action

The portions of the Tort and Product Liability Reform Act defining a product liability cause of action were substantially adopted from the Model Uniform Product Liability Act.(fn34) The committee believed that existing Washington law defining the cause of action for product liability was confusing.(fn35) The Washington Supreme Court in the case of Seattle-First National Bank v. Tabert (fn36) adopted the consumer expectation test for analyzing whether or not the manufacturer of products should be held strictly accountable for any damage caused by that product. Washington's Tort and Product Liability Reform Act preserves the consumer expectation test as the touchstone of the analysis of whether or not to impose liability, but sets forth explicit definitions for a product liability claim.(fn37)

Under existing Washington law, various theories have been advanced as the basis for a cause of action for product liability...