Market Share Liability: A Comprehensive Guide to Its Definition and Application

Q: When is market share liability applicable?

This liability applies in cases involving fungible products where multiple manufacturers produce similar items.

Q: How is liability determined?

Liability is determined by calculating the market share percentage of each manufacturer involved in the case.

Definition & Meaning

Market share liability is a legal principle in the United States that allows individuals who have been harmed by a product to distribute the responsibility for damages among the manufacturers of that product. This approach is particularly relevant for products that are indistinguishable from one another, such as generic drugs. For instance, if a person suffers an injury after using a defective medication, the liability can be divided based on the percentage of the market that each manufacturer holds. If one company has fifteen percent of the market share, it would be held responsible for fifteen percent of the damages.

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Legal Use & context

Market share liability is primarily used in civil law, particularly in product liability cases. It is applicable when multiple manufacturers produce similar products that cause harm, allowing the injured party to seek compensation from all responsible parties based on their market share. This legal doctrine can be particularly useful in cases involving pharmaceuticals, where it may be challenging to identify the exact manufacturer of a defective product. Users can manage their claims with the help of legal forms and templates available through US Legal Forms.

Key legal elements

Real-world examples

Here are a couple of examples of abatement:

Example 1: A patient experiences severe side effects after taking a generic medication. If three companies produce this medication, and one company holds twenty percent of the market, it would be liable for twenty percent of the damages incurred by the patient.

Example 2: A person suffers injuries from a defective tire that was manufactured by several companies. If one company has thirty percent of the market share, it could be held responsible for thirty percent of the damages resulting from the injury. (hypothetical example)

State-by-state differences

State	Market Share Liability Application
California	Recognizes market share liability in certain product liability cases.
New York	Allows for market share liability under specific circumstances.
Illinois	Has adopted market share liability for certain fungible products.

This is not a complete list. State laws vary, and users should consult local rules for specific guidance.

Comparison with related terms

Term	Definition
Joint and Several Liability	Each defendant can be held liable for the entire amount of damages, regardless of their individual share.
Product Liability	Refers to the legal responsibility of manufacturers and sellers for defective products that cause injury.

Common misunderstandings

What to do if this term applies to you

If you believe you have been injured by a product and market share liability may apply, consider the following steps:

Document your injury and any related medical treatment.
Identify all manufacturers involved with the product.
Consult with a legal professional to understand your rights and options.
Explore US Legal Forms for templates that can assist you in filing a claim.

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Quick facts

Typical fees: Varies by attorney and case complexity.
Jurisdiction: Primarily civil courts.
Possible penalties: Compensation based on market share liability.

Key takeaways

Frequently asked questions

What is market share liability?

It is a legal principle that allows injured parties to apportion liability among manufacturers based on their market share of a product.