Question

Every year a certain number of consumers are hurt using lawn mowers. Installation of a safety lever reduces the risk of an accident from .002 to .001 but costs $50 per mower. Suppose the damages from an accident are $45,000 on average.
(a) Should the manufacturer be held liable for failure to install the lever according to the Hand rule?
(b) Would the manufacturer install the lever under strict liability?

Answer 1

(a). Failure of lawn movers, is not only the issue of installation done by manufacturer, rather it is also because of consumers being not properly trained for using it. During installation, manufacturer should take care of all the risks and provide work around accordingly. Consumer on the other hand also should understand the working of lawn movers properly before getting operational with it.

(b). Looking at the reduction in probability of happening the incident to 0.001 from 0.002 and loss caused due to accident per consumer of $45,000, installing the lever under strict liability is an efficient move for the organization as it will lead to over all benefit considering every parameters.