Legal Definitions - market-share liability

Definition: Market-share liability is a type of legal responsibility that is imposed on each member of an industry based on their respective share of the market or percentage of the product that is placed on the market. This liability is usually applied when a plaintiff cannot trace the harmful exposure to a particular product, as when several products contain a fungible substance.

Example: A group of people who were exposed to asbestos files a lawsuit against several companies that manufactured asbestos-containing products. The plaintiffs cannot identify which specific product caused their exposure, but they can prove that each defendant had a share of the market for asbestos-containing products. In this case, each defendant may be held liable for a portion of the damages based on their market share.

This example illustrates how market-share liability can be used to allocate responsibility among multiple defendants when it is difficult to determine which specific product caused harm. By holding each defendant accountable for their share of the market, this type of liability ensures that each party bears a fair portion of the responsibility for the harm caused.