What is the “risk-utility test”?

The “risk-utility test” is a legal doctrine used in product liability law that is used to determine whether or not a product’s design presents an unreasonable risk of harm to its users. In North Carolina, the test focuses on the manufacturing company’s overall risk assessment process rather than the specific product’s safety. The test has two main components. First, the degree of risk associated with the product must be evaluated, which involves considering the severity of the harm if the product’s design fails, and the probability of its occurrence. Second, the utility of the design must be weighed against the risk. In other words, a court must consider how useful the design is and how necessary it is to use the particular design, in order to determine if the risk associated with it was reasonable. In addition, the manufacturer must show that it took reasonable steps to adequately warn users about potential risks. If the manufacturer did not do so then they may be found liable for any injury caused due to the product’s design. Ultimately, the court must decide whether the combination of risk and utility make the product’s design unreasonably dangerous.

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What is the “risk-utility test”?

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