If one company is bad at vetting vendors and loses lots of lawsuits, so has to raise prices, that creates an opening for competitors (existing or new) to do a better job of that, not lose a bunch of lawsuits, and crush them in the market with lower prices. No?

[EDIT] to clarify, you're right if you're talking about flat costs across all players in an industry, but wrong about fines or liability exposure that targets specific behavior, as it's possible to avoid those and retain lower costs (yes, of course, compliance and that avoidance of liability has a cost that does tend to raise prices somewhat, but so does any action aimed at accomplishing some goal, and supposedly companies are more efficient at that sort of thing than government so this should be a relatively cheap way to achieve some end, if you think markets work fairly well in general)