Research Paper: Business Law Products Liability and Negligence

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Business Law

Products 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 expectancy, suffered in their heart attack or stroke, and, afterwards, lost life enjoyment. Punitive damages are awarded to punish the defendant when the defendant has engaged in behaviour that is particularly offensive. If the court finds Merck's conduct egregious, it may award punitive damages. Aggravated damages are awarded when the defendant's reprehensible conduct causes intangible injury such as distress or humiliation. The plaintiffs against Merck may have suffered distress after taking Vioxx, as distress would be common with a heart attack or stroke. Thus, aggravated damages may also be proper.

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… [END OF PREVIEW]

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APA Format

Business Law Products Liability and Negligence.  (2011, February 15).  Retrieved May 23, 2019, from https://www.essaytown.com/subjects/paper/business-law-products-liability-negligence/1906

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"Business Law Products Liability and Negligence."  15 February 2011.  Web.  23 May 2019. <https://www.essaytown.com/subjects/paper/business-law-products-liability-negligence/1906>.

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"Business Law Products Liability and Negligence."  Essaytown.com.  February 15, 2011.  Accessed May 23, 2019.
https://www.essaytown.com/subjects/paper/business-law-products-liability-negligence/1906.