What is a “risk-benefit analysis”?

A “risk-benefit analysis” is a type of assessment used in product liability law. In California, consumers have the right to expect that the products they buy will be reasonably safe for their intended use. When evaluating whether harm has been caused by a defective product, judges may consider a risk-benefit analysis. This analysis compares the relative risks posed by the product versus the product’s potential benefits. The analysis also evaluates whether the manufacturer took reasonable steps to reduce the risks posed by the product. In making a determination, the court will consider evidence such as the manufacturer’s knowledge of any potential risk, the magnitude of that risk, and the cost of reducing or eliminating that risk. In order to apply a risk-benefit analysis to a product liability case, the court must first decide what the intended use of that product is. It will then consider the foreseeable risks posed by the product for that use. The court will then balance these risks against the potential benefits of the product to society. Finally, the court will evaluate whether the manufacturer reasonably reduced the risks posed by the product. Risk-benefit analysis is often used in product liability cases as a way to weigh the harm caused by a hazardous product against the potential benefit of its use. It provides a way for judges to determine whether a manufacturer was negligent or careless in designing or manufacturing a product.

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What is a “risk-benefit analysis”?

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