Vocabulary notes

an incentive – побуждение, заинтересованность

to reward creativity – вознаграждать творчество

enforcement – введение в действие

ostensibly – мнимо

to comply with – соответствовать

grace - благосклонность

Text IV. Product safety and product liability

Product safety laws set certain safety standards to which a product must adhere. Product liability involves holding a firm and its officers responsible when their product causes injury, death, or damage. Product liability can be much greater if a product does not conform to required safety standards. There are both civil and criminal product liability laws. Civil laws call for payment and money damages. Criminal liability laws result in fines or imprisonment. Both civil and criminal liability laws are probably more extensive in the United States than in any other country, although many other Western nations also have comprehensive liability laws. Liability laws are typically least extensive in less developed nations.

A U.S. boom in product liability suit and awards has resulted in a dramatic increase in the cost of liability insurance. In turn, many business executives argue that the high cost of liability insurance makes American businesses less competitive in the global marketplace. This view was supported by the Bush administration. Former Vice President Dan Quayle once argued that the United States has too many lawyers and that product liability awards are too large. According to Quayle, product liability insurance rates are typically much lower overseas, thereby giving foreign firms a competitive advantage. Quayle does have a point; tort costs amount to about 2.4 percent of U.S. GDP, three times as much as in any other industrialized country. So the costs of lawsuits does seem to put America at a competitive disadvantage.

Aside from the competitiveness issue, country differences in product safety and liability laws raise an important ethical issue for firms doing business abroad. Specifically, when product safety laws are tougher in a firm’s home country than in a foreign country, or when liability laws are more lax, should a firm doing business in that foreign country adhere to the more relaxed local standards, or should it follow the standards of its home country? While the ethical thing to do is to adhere to home country standards, firms have been know to take advantage of lax safety and liability laws to do business in a manner that would not be allowed at home.

Vocabulary notes

comprehensive - разумный

liability - ответственность

to adhere to – придерживаться (правил)

tort – гражданско-правовой деликт

lax rules – либеральные правила

competitiveness issue – проблема конкуренции

Scanning reading

You are going to scan the text about Product Safety and Product Liability. Before you start doing that try to answer the following questions:

• Why did the EU ban the use of growth-promoting hormones in livestock and impose a ban on the import of beef produced with such hormones? (It was in 1988)

• Some years ago Bushe’s chickens were forbidden for selling in Ukraine. Was it a justified barrier to trade? Give your idea.

• Do you know any updated regulations related to food safety and animal health?

• What Ukrainian food products would you recommend for selling abroad?

Now scan the text and speak:

• About civil and criminal product liability laws.

• About the difference of product-safety laws in a home country and abroad and say if it is the right thing.