A friend is in the non-certified composite propeller business doing innovative things in terms of manufacturing methods etc, and selling in volume. FWIW I’ve never heard him mention product liability as a business-driving concern despite the rather obvious issues with developing propellers. I think the definition of the Experimental Category must make a substantial difference, and I also don’t recall him being involved in any lawsuit… which now that I think about strikes me as remarkable.
achimha wrote:
have the burden of (2)
Where would the law make a distinction between liability for a certified and a non certified engine?
The former is delivered with a statement signed by the manufacturer that it conforms to a recognised standard that makes it fit for flying people around (form one for parts, unrestricted CofA for airplanes)
The latter does not
I am not a lawyer but it seems to me such representation would make all the difference at court
However, your comment prompted me to do some more google-research:
At most successful US aviation product liability court cases, the court tended to dismiss the importance of the conformity to an approved standard, stating that such certified conformance does not relief the manufacturer of its liabilities (does this mean there is indeed no difference?)
I also sampled two extremes of aircraft purchase agreements : Cessna Corvalis (full certified liability) vs Van’s RV kit (DYI: you do your own craft and liability) , and extracted the following wording:
Van’s: Van’s Aircraft hereby disclaims all warranties with respect to this information, data, products and services, whether express or implied, including the implied warranties or merchantability and fitness for a particular purpose.
Cessna: WITH THE EXCEPTION OF THE WARRANTY OF TITLE, TO THE EXTENT ALLOWED BY APPLICABLE LAW, THIS WARRANTY IS EXPRESSLY IN LIEU OF ANY OTHER WARRANTIES, EXPRESSED OR IMPLIED IN FACT OR BY LAW, INCLUDING ANY IMPLIED WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE. THE REMEDIES OF REPAIR OR REPLACEMENT AS ABOVE SET FORTH ARE THE ONLY REMEDIES UNDER THIS WARRANTY. CESSNA DISCLAIMS ANY OBLIGATION OR LIABILITY WHETHER IN CONTRACT OR IN TORT (AND WHETHER FOR NEGLIGENCE, STRICT LIABILITY, PRODUCT LIABILITY OR OTHERWISE),…
So, does the representation (of the CofA) make such a difference at court?
Peter wrote:
The amounts that are awarded might be silly-big but anytime somebody goes past the headline reports, does some painful legwork, and actually digs out what was actually paid out at the very end (the amount is usually hidden in local court records, and anyway nobody goes public with it willingly) your 100M award got settled for 1M and was probably paid by some other party anyway.
You are right: little actual money goes to claimants: again some google research shows that for airframers, only 15% of their product liability costs go to claimants, the rest is for lawyers and insurers…
It seems that total declared product liability costs remain high: from the 2013 textron Annual report some $550M remain budgeted for product liability purposes vs $8bn revenue for Cessna+Bell+Lycoming+Systems combined (some 50% of which is manufacturing costs). So it looks like liability is some 14% of the cost of manufacture.
Of course this is the aggregate of pistons+jets+helos, and I am sure this is more like 30-60% for light piston aircraft (1), maybe not 100% as it was in the 80’s, but still very high.
(1) Also, bear in mind helos and jets liabilities and warranties related to engine and avionics (40-60% of the whole aircraft) are provided directly by engine/avionics manufacturers (ie additional to the TExtron $550M figure), whereas the Lycoming engines in the piston Cessnas are included in the Textron liability figure. This factor alone means liability for pistons is at least 30% mfg cost based on above data, probably more like 50%.
I am not sure I follow your presumed breakdown of product liability figures, Antonio.
Sales of new piston aircraft are very low so if Textron budget $550M for product liability, only a tiny bit of that will be going for piston aircraft.
I would believe the 14%… which would then be virtually immaterial and certainly no justification for certified product prices being so much higher.
NIL: Do you guys really think that all GA Marketing execs are that stupid ?
IMHO: New GA aircraft are priced to maximize profit.
In plain English – if they thought they could sell substantially more units at a lower price point, and thus make more $$$, then they would !
From here
Also the “American legal system” is not like it is constantly portrayed here in “intellectually superior” Europe 
What you tend to get out there is a $100M award, then they haggle for a couple of years spending $1M in lawyer fees, then some heads get banged together, then they haggle some more, another $500k gets spent on lawyers, and the buck gets passed on another party whose insurer pays out $3M.
But the haggling and even the name of the final payer doesn’t end up conveniently on the internet, so, the rumour mill runs on the original $100M stuff for the next 20 years. Take that Sandel / Cirrus crash case (discussed here years ago) where to much disgust of a couple of people was found to have been settled by Goodrich…
It’s not a great system but it’s important to realise the big payouts are almost never paid, and the constantly cited “product liability” issues which “plague” aviation are mostly nonexistent. They are constantly used by manufacturers to explain the dropping of products which nobody is buying anymore
Peter wrote:
It’s not a great system but it’s important to realise the big payouts are almost never paid, and the constantly cited “product liability” issues which “plague” aviation are mostly nonexistent. They are constantly used by manufacturers to explain the dropping of products which nobody is buying anymore
Well, when Cessna stopped producing 172’s they promised to resume production if the legislation was changed. It was and they did. The 172 is hardly a product that nobody is or was buying.
It was a handy way to clear out a bit of the used stock overhang from the 1960s and 1970s boom.
There is AFAIK no evidence of liability payouts featuring in Textron accounts.
Peter wrote:
There is AFAIK no evidence of liability payouts featuring in Textron accounts.
That would have been paid by the insurance companies, not by Textron. The claims were that the liability insurance premiums were excessive.
Agreed, but (this has come up many times, in various fora) nobody ever found significant insurance premiums either.
I vaguely recall somebody finding Garmin paying some low single digit percentage of their revenue on an item called “insurance”, which (given that this would include all of their business insurance cover) would be about right. Obviously somebody with time on their hands could check this fairly easily… Garmin is a big company.
In my business we pay about 1% of sales, which is probably same order of magnitude as most companies who actually make something useful.
Like a lot of things, we have done this one already
