Maybe Having To Pay $553 Million Will Make Them Think Twice……

Heard about the exploding Takata airbags installed in many cars? Upon impact, these airbags explode with such force that they propel metallic shrapnel into the car, and, tragically in some instances, into the car’s driver or passenger. So far, worldwide, 16 people have died and 180 more have been injured.

This, of course, led to multiple lawsuits against car manufacturers and others, seeking compensation for victims, and to provide for the removal of millions of Takata airbags and installation of safe bags.

Today, four car manufacturers–Toyota, Subaru, Mazda, and BMW–agreed to pay a total of $553 to settle the lawsuits that had been filed against them. $553 MILLION. It’s an enormous amount of money, of course.

Which brings me to my point: for those many who are tempted to reflexively react to an amount of money so huge by ripping the lawyers who secured it for their clients, and decrying the “litigious” culture of the United States, I ask that you keep these simple truths in mind:

(1) The car manufacturing giants AGREED to pay that amount of money. No one forced them. It was a settlement. And, in my experience, there is only one reason why a defendant AGREES to pay a large amount of money to settle a case before trial: because it’s worried that the JURY WILL MAKE IT PAY EVEN MORE. Please don’t feel sorry for corporations whose behavior may have harmed life and property so significantly that they are worried that the damage may have been MORE than $553 million.

(2) These are profit-driven businesses. Besides the possibility of their executives going to jail for endangering public safety, paying a lot of money is often the ONLY thing that a profit-driven company respects as a force that will change its behavior. After paying $553 million, and confessing it to the world, do you think these car companies will be more careful next time concerning the health and property of their customers? Of course, they will. And don’t you think that other manufacturers–even those who were not sued, and even manufacturers of other products–will take notice from this settlement that they, too, can wind up writing a massive check if they don’t protect their customers? Of course, they will.

And isn’t that exactly the point?

http://www.reuters.com/article/us-automakers-takata-idUSKCN18E2HZ