Stage 3: The Last Stage of the Technology Life Cycle

In his paper, Res Ipsa Loquitur and Compliance Error, 142 U. Pa. L. Rev. 887 (1993-4), Mark Grady uncovers an important paradox in tort law – as defendants implement technology that makes activities safer, liability for its use increases.  Grady reaches this conclusion through analyzing the relationship between compliance error and the economic theory of negligence.  As complex technology has developed over the fifteen years that have elapsed since his paper was published, this insight is all the more relevant and provides some clues to answering the difficult questions of liability that accompany innovation.

Grady’s Theory, Roughly
While Grady’s paper is an explanation of the role of compliance error in the economic theory of negligence, a central concern is the role of technology in generating liability for its negligent use.  The article seeks to explain why negligent accidents still occur in a regime which has a well-established and well-accepted theory of negligence – the Learned Hand formula – which prescribes precautions to take to avoid liability.

Grady’s answer lies in the concept of compliance error, whereby courts hold defendants liable for every missed instance of an efficient precaution – that is a precaution prescribed by the Learned Hand formula.  Courts in most cases require 100% compliance, and therefore impose strict liability for the use of the precaution.  Hence, Grady identifies a “pocket of strict liability.”  He writes, “In reality the pocket of strict liability comes from making people liable when they have not achieved perfect consistency.  Actors are found negligent for committing efficient ‘compliance errors.’  Economically, this is a form of strict liability because it is a liability that attaches to social-wealth maximizing behavior.” Id. at 987-8.  Technology establishes the precaution for which courts have required perfect compliance in order to escape liability for negligence.  A short example may clarify the distinction: a commercial airline installs a radar system by which it should escape negligence, but the airplane crashes into another airplane. Is this a failure to take the required precaution? Or is it a momentary failure to monitor the precaution (radar screen)? The former is a negligent failure; the latter, a compliance error.

The Technology Life Cycle
Grady emphasizes, “Far from indicating flaws in the system, this is a normal and usual relationship when technology progresses…the paramount purpose of the negligence system is to regulate compliance error in the use of technology.  It is therefore natural that advances in technology tend to increase the number of claims.” Id at 912.  Certainly, technology has redefined the role of the law in the regulation of human and industry behavior.  One such aspect of this role is the requirement and regulation of technology to enhance safety, such as the radar discussed above.  However, Grady also identifies a further natural evolution, that of technology itself.  He writes,

“There is a technology life cycle.  Think of the introduction of the airplane.  In the beginning, res ipsa cases were weak because the technology was so ambitious that the rate of unavoidable accident was high relative to the rate of compliance error.  Then radar was invented, reducing the rate of unavoidable accident, but creating an entirely new opportunity for compliance error when the pilot failed to check the monitor.  In this second stage, technology increased the number of negligence claims and the strength of res ipsa claims.  In the last stage res ipsa cases again weaken as the computer-monitored radar reduces the rate of compliance error more than it reduces the rate of unavoidable accident.  At present, most technological advance seems to occur in the second stage in which res ipsa cases become stronger.” Id. at 911.

Here is where we see the marked difference between 1994 and 2010, the emergence of the third stage of technology.  Grady’s notion of the third stage of technology seems to be one where technology is monitoring the technology, reducing the rate of human compliance error.  Take for example the car Google recently tested on the roads of San Francisco – the car that drives itself.  Such an innovation would replace the potential for compliance error as technology, capable of 100% compliance, replaces human involvement.  However, as the New York Times article points out, there are various legal issues associated with a car that drives itself.  One of which is, who bears the fault of an accident?  I think such fault/causation issues would lead to product liability claims, not just because of the role of the product in the activity, but also because of the deeper pockets of the manufacturers.

Furthermore, I would suggest that the replacement of negligence claims with product liability claims is an inherent feature in the evolution of technology to the third stage.  This would probably be a preferable regime, as manufacturers are often the parties better able to spread costs, improve products, and inform consumers.  On the issue of technological development and liability, I think Grady got it right: stage 3 technology will be the era of improved safety, innovation, and less negligence liability. Instead, liability will be moved up the chain of distribution to the manufacturers, and the realm of product liability will take over.

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