Risk-Utility Calculus
Definition
The balancing of expected harm (probability of injury multiplied by severity) against the burden of prevention (cost of the SAD plus any loss of utility). A design is defective when risk outweighs utility and a feasible SAD exists.
- Balances
- Expected harm against burden of prevention
- Expected harm
- Probability of injury multiplied by severity
- Burden term
- Cost of the safer alternative design (SAD) plus lost utility
- Defect trigger
- Risk outweighs utility and a feasible SAD exists
Common questions
How is risk-utility calculus different from a simple cost-benefit analysis?+
It is applied specifically within design-defect litigation to determine legal liability, weighing a feasible alternative design against the original, rather than evaluating overall business costs and benefits of a product line.
What role does the feasibility of the safer alternative design play?+
If no feasible SAD existed at the time of manufacture, the calculus generally cannot support a defect finding, since the plaintiff must show a practical, cost-reasonable design that would have reduced the risk.
Can a product be found defective even if most users were never harmed?+
Yes. The calculus weighs the severity of harm to those affected against the burden of prevention across the whole product line, so a low-frequency but severe injury can still tip the balance toward defect.
Related terms
- Commercial Feasibility
- Whether the cost of the safer design, spread across expected production volumes, would have made the product unaffordable or unmarketable.
- Custom vs Mandatory Standard
- Voluntary industry standards represent custom in the industry; regulatory standards (mandatory by law) set the legal floor. A product can violate custom...
- Design Standard
- A document produced by a recognised body (ISO, ASTM, UL, EN, national authority) specifying minimum technical requirements for a product category. Meeting...
- Safer Alternative Design (SAD)
- A specific, concrete modification to a product that would have reduced the hazard in question while preserving the product's essential utility, and...
- Technical Feasibility
- The capacity to implement a design change with materials, processes, and knowledge available at the date the product was manufactured and sold.