Ensuring Compliance for Product Liability
Thu, 19 Dec 2019 13:46
Before any new product is released for the market, businesses must ensure and assess its product liability, safety, and compliance. Any defects or potential defects that may compromise the safety and integrity of a product must be dealt with due diligence and in compliance with product safety laws and regulations.
When a product fails to work correctly, it could endanger the user, causing injury or even loss of life. For the product manufacturer, this could mean culpability resulting in financial losses and damage to reputation.
When a product fails, the focus falls on the defects which make them unreasonably dangerous and cause them to fail. If detected in time and if dealt with correctly by those involved, it could save lives and avoid costly product recalls and liability claims.
While defects can be detected at any point, there are three key points during a product development process which can lead to product liability for a manufacturer or supplier:
- Design: When a defect is present in a product at inception before it is manufactured, it essentially means that the design of the product is unsafe.
- Manufacture: If defects that are identified during manufacture or assembly.
- Promotion: When there are flaws in the way a product is promoted, such as incorrect labelling, improper instructions, or insufficient safety warnings.
Liability for product defects and ensuring its suitability for consumers could, therefore, rest with any party involved in a product's chain of development and distribution, such as designers, manufacturers and promoters.
Product designers, manufacturers and promoters must be aware of safety standards and regulations. These include ensuring due diligence on product safety and integrity, the protocol when becoming aware of potential product defects and need for product recalls, as well as complying with product-specific regulations. There are several safety laws and product quality standards to be aware of, such as the CE Marking, which set the benchmarks for product safety. Many of the laws and regulations also differ by the local authority, the country and/or the region.
The best way to mitigate the risks is by raising awareness amongst employees on their responsibilities during production, manufacture and promotion of a product.
Infamous Product Recalls
Faulty Ignition Switches - General Motors
In February 2014, it was discovered that several of General Motors (GM) vehicles were manufactured with faulty ignition switches. The ignition switches could shut off the engine while driving without warning, disabling power steering and brakes, and preventing airbags from inflating. The faulty ignition switches have been linked to at least 13 deaths and more than twice as many car accidents causing injuries. Over 26 million GM automobiles have been recalled worldwide. The product recall has cost GM over $4.1 billion on repairing recall vehicles, settling death and injury claims, and settlement with the Department of Justice.
Defective Tires - Firestone Tires and Ford
In 2000, Firestone Tire and Rubber Company were alleged to have installed defective tires on Ford SUVs and pickup trucks. These defects were subsequently linked to 271 deaths and more than 800 injuries in the US. The product recall and replacement of over 6.5 million tires have cost Firestone's parent company, Bridgestone, over $2 billion. While Ford announced that its recall of 13 million tires on its SUVs and pickup trucks cost the company $3 billion. Ford has also faced over $600 million in lawsuits. While both the brands survived the product recall, it ended the 100-year partnership between Firestone and Ford.
Metal-on-Metal False Claims - DePuy
In 2010, DePuy, a division of Johnson & Johnson, recalled their faulty ASR metal-on-metal hip replacement with many of the patients reporting complications from the hip replacement system, being left unable to walk and in pain, increased metal ion levels in the blood, swelling, nerve damage, tissue damage and/or muscle damage. Over 93,000 people worldwide have received ASR implants and in 2019, Johnson & Johnson offered to settle metal-on-metal hip lawsuits for over $1 billion.