How to stay out of court: Establish bulletproof safety policies and formal procedures.
Lanny R. Berke
PE, Certified Safety Professional
No question that the number of product liability cases has risen dramatically in the past 20 years. Interestingly, the evidence is that most products are pretty safe: Juries have found against the manufacturer in only approximately 6% of the cases when all appeals were exhausted. In a large number of cases, the court dismissed the plaintiff's claims prior to trial.
This does not mean that we shouldn't take product liability seriously. Corporations cannot ignore the risk of a huge judgment or a class-action suit.
It does mean that a company with a good product safety policy and a good set of product-safety procedures will not produce a product that will injure someone and land the manufacturer in court, or the company will be in a good position to protect itself in a lawsuit.
Traditionally, the scope of product safety has been limited. Many companies approached product safety as meeting the requirements of industry standards or matching the products of their competitors.
Today that has changed. Companies are recognizing that simply meeting industry standards does not equate to producing a safe product. Industry standards identify the minimum level of safety that a product should meet. But companies are recognizing that they must go well beyond this minimum level of safety to produce a truly safe product. Companies have established comprehensive programs built around corporate product safety policies and procedures.
Faced with the reality that farming and farm implements are inherently hazardous, a leading manufacturer of farm equipment decided to make product safety a priority throughout the organization. It established a safety policy, a product-safety manual, and a product-safety department that answers directly to the company president. The organization may have the safest agricultural products on the market today.
Product safety is an important bottom-line issue. When a company tries to reduce aftersales costs, reduced product safety costs can play a major part in that savings.
Companies seriously concerned about the safety of their products realize they must take a comprehensive approach to safety. A safe product is one that is properly designed and carefully manufactured. It also has proper warnings and labels, and correct, detailed manuals.
Product safety extends well beyond the product. It means knowledge of who will use the product and how people may misuse it. It means anticipation of the hazards of shipment or disposal of a product. It means doing everything possible to make sure products do not injure. It also involves designing and testing a comprehensive plan about what to do if something does go wrong.
PLAN OF ACTION
It is impossible to provide a precise formula for a legally defensible position in product liability actions. Product liability law evolves constantly. Moreover, a court decision seldom results in specific rules that a manufacturer must follow. It usually gives only an indication of what one jury believes to be reasonable action by a manufacturer.
In the strictest interpretation of product liability, a manufacturer is liable if a product is defective and causes injury. In recent years, however, juries have found that a manufacturer bears increasing responsibility to foresee how a product might be used or misused, and to take steps to protect the user. Manufacturers can be found negligent for inadequate warning labels, and sales literature and packaging that misrepresent product capabilities.
The best way to avoid or reduce the potential that a product will injure someone is to be proactive in this area. That is to eliminate or reduce the hazard that can cause an injury.
Hazard analysis is a logical and methodical way to look at a product and anticipate any hazard that might result from its use or misuse. This is done by identifying a product's foreseeable uses, its foreseeable users, and the foreseeable environments where the product will be used.
More far reaching than a simple safety analysis, which attempts only to identify dangers in a product, a hazard analysis anticipates dangers that can arise at any time in a product's life cycle. It can happen during manufacture, shipping, installation, use, and even disposal.
Major considerations of a business operation that concern product safety include legal issues, hazard analysis and other safety activities, marketing, design, manufacturing, and safety testing.
It includes product safety audits, safety certification, records and documentation, post sale activities, product recall, advertising and manuals, warnings and labels, and product failure investigation.
Another issue that many companies ignore is how to treat a user when a company receives a complaint. If a company reacts to every user contact as an opportunity to prevent a lawsuit, that is exactly what will happen.
Avoiding product liability lawsuits is no accident, but preventable accidents are often product liability lawsuits.