What is a “market share” theory of liability?

The market share theory of liability is a legal concept in the state of California which deals with a product liability case. This theory of liability means that all manufacturers who sold a defective product should be held liable, even if they are not the same company who produced the product in question. Essentially, the market share theory of liability states that all manufacturers who participated in the sale and production of a defective product should share the responsibility for any damages caused by the product, even if they are not the manufacturer that produced the product. The theory is based on the idea that, if a product is defective, the manufacturers who produced and sold the product should be considered to be equal partners in the responsibility for any injuries caused by the product. Under the market share theory of liability, the court will identify all the companies who produced and sold the defective product in question, and then assign each company a portion of the responsibility for the damages. This will be based on the “market share” of the product, meaning the percentage of the total market for that particular product that each company held. Thus, each company will be liable for the total damages proportionate to their share of the total market. The market share theory of liability is a powerful way for courts to ensure that all companies who participated in the production and sale of a defective product can be held liable for any damages or harm the product causes.

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What is a “market share” theory of liability?

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