More simply, the court considers if the economic costs (determined from likely lawsuits) are higher than the cost of changing the product design (ex: installing a plastic guard) plus the loss of use of the product (ex: the new guard makes it harder to use the product).
Generally, the simplest way to think of the risk-utility test is the Hand Formula applied to products.
The Third Restatement of the Law, Torts: Products Liability §2(b)[1] favors the risk-utility test over the Second Restatement of the Law, Torts §402(a), which favored the consumer expectations test.
A product is defective in design when the foreseeable risks of harm posed by the product could have been reduced or avoided by the adoption of a reasonable alternative design by the seller or other distributor, or a predecessor in the commercial chain of distribution, and the omission of the alternative design renders the product not reasonably safe.
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