Juries Award Higher Amounts for Severe Foodborne Illnesses
U.S. food firms have a variety of incentives to produce safe products. Firms risk losing sales and reputation if consumers become concerned about the safety of the firms’ products. Firms that violate Federal, State, or local food safety laws or regulations may face fines, recalls, or plant closures. And, finally, firms responsible for contaminated food products that make people ill can be sued by the people or their families. Many food poisoning lawsuits are settled out of court, and there is limited information on these settlements because of confidentiality provisions. Thus, the effectiveness of litigation in providing firms with incentives to produce safer food products has been largely unstudied.
To address this research void, ERS researchers analyzed a sample of 175 foodborne illness lawsuits resolved in court during 1988-97. Verdicts and award amounts in court cases are a matter of public record. The researchers found that less than a third of plaintiffs (55 cases) won compensation for their foodborne illness from food processors, restaurants, or other food firms. The “expected award”—the average compensation including the cases in which plaintiffs lost as well as won—granted by juries to plaintiffs in such trials was $41,888.
Injury severity is a major factor affecting an expected award. ERS researchers divided the 175 court cases into three severity categories: 6 cases involved a premature death, 60 cases involved nonfatal injuries severe enough to require hospitalization, and 109 cases involved less severe illnesses.
The expected award for a lawsuit that claimed a premature death as a result of a food poisoning was $183,053, far higher than the expected awards for nonfatal illnesses. However, the award distribution was highly skewed, with the two largest awards accounting for 51 percent of the $7.3 million total awarded in the 55 plaintiff victories. Thus, even if plaintiffs win compensation, they will likely receive less compensation than these estimates. The median award for the 55 plaintiff victories was $25,560.
|Illness severity||Court cases during 1988-97 with award information (number)||Percent won by plaintiff (percent)||Expected award per case (1998 dollars)|
|Hospitalized & survived||60||31.7||44,713|
Product Liability and Microbial Foodborne Illness, AER-799, USDA, Economic Research Service, April 2001, by Jean C. Buzby, Paul D. Frenzen, and Barbara Rasco