Quality Responsibilities in Product Liability
Presented by
Jack B. ReVelle, Ph.D.
ReVelle Solutions, LLCOctober 23, 2006
2
Agenda -I
• Factors Contributing to Growth in Product Liability Litigation
• Company Sources of Defensive Actions• Tips for Limiting Product Liability• Elements of a Product Liability Prevention
System • Liability• Product Liability
3
Agenda - II
• Defensive Actions Against Product Liability Lawsuits
• Research Results
• Sources of Plaintiff & Defense Experts
• Becoming a Product Liability Expert
• Step-by-Step Case Description
• Conclusion
• References
4
Factors Contributing to Growth in Product Liability Litigation
• Based on Injuries Resulting From Use or Exposure to Manufactured Products
• Litigation Growth Due to:Population Explosion of New ProductsErosion of Manufacturers’ Defenses
5
Company Sources of Defensive Actions
• Senior Management• Designers• Manufacturing• Quality• Marketing• Advertising• Customer Service• Documentation
6
Tips for Limiting Product Liability - I
• Company Leadership Should:Visibly Exercise Organizational Power Demonstrate Passion for Company’s
Product Liability Program• Product Liability Program Champion:
Is Best Selected From Quality Organization Should be Obviously DrivenShould Chair Product Liability Program
Steering Committee
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Tips for Limiting Product Liability - II
• Steering Committee MembershipUpper Limit of 3 to 4 Members Source Functions: Quality, Reliability,
Finance, Risk Management, R&D • Steering Committee Objectives
Develop Total Prevention ProgramManage External Insurance Reps &
Assigned Defense Attorneys Handling Company’s Cases
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Tips for Limiting Product Liability - III
• Fully Document Your Company’s Commitment to Product Safety
• Make Certain Every Step in the Production Process Can Be Traced
• Regularly Compile & Review Complaint Files
• Maintain Proper Documentation Throughout Every Product’s Life Cycle
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Tips for Limiting Product Liability - IV
• Develop a Formal, Written Product Recall Procedure
• Have Your Legal Counsel Review Product Literature, Warnings, Etc.
• Review Contractor & Subcontractor Agreements Periodically
10
Elements of a Product Liability Prevention System - I
• Company Policy & Organization
• Design, Research & Development
• Purchasing
• Quality
• Warning Labels & Instructions
• Packaging & Shipping
• Marketing & Sales
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Elements of a Product Liability Prevention System - II
• Field Service, Sales & Repair
• Field Monitoring
• Product Recalls
• Recordkeeping & Documentation
• Complaints, Incidents & Claims
• Legal & Contractual
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Elements of a Product Liability Prevention System – IIIA
• Prevention Program: Internal Training of All Management - Key Elements of Seminar:
Dangers of Deceptive Advertising & Marketing
Understanding Customer AgreementsSelection of Suppliers & SubcontractorsDesign Review Procedures
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Elements of a Product Liability Prevention System - IIIB
• Prevention Program: Internal Training of All Management - Key Elements of Seminar
Performing Hazard AnalysesEffective Warnings & InstructionsReliability Tests & Written ReportsSelection & Maintenance of Important
Documents
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Elements of a Product Liability Prevention System - IIIC
• Prevention Program: Internal training of All Management - Key Elements of Seminar
Recognition of Dangerous DocumentsRecognition & Handling of Potential
Incoming Product Liability Phone CallsHandling Accident InvestigationsHandling Product Recalls
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Liability - I
• Defined as Being Legally Accountable, i.e., Being Legally Obligated by Law to Perform Dependably
• Cases Can be Tried in Either Civil or Criminal Court
• Types of LiabilityOrganizational vs. ProfessionalCivil vs. CriminalProducts
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Liability - II
• Liability Needs to be Distinguished From the Following Concepts:
Culpability: Infers Intent ( Purposely, Knowingly, Recklessly, Negligently)
Capacity: Diminished Capability (Infancy, Intoxication, Insanity)
Responsibility: Presumptions (Volition, Free Will, Competency)
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Product Liability - I
• Legal Principle - A Person or Company That Sells a Product in a Defective Condition When It is Unreasonably Dangerous to the Ordinary User May be Liable for Resulting Property Damage or Physical Injuries
• Exists Even When There is No Proof of Negligence
• Generally Considered a Strict Liability Offense
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Product Liability - II
• Claims Can be Based on:NegligenceStrict Liability (No Proof of Negligence) Breach of Warranty of Fitness
• Types of Product Defects That Incur LiabilityDesign ManufacturingMarketing
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Defensive Actions Against Product Liability Lawsuits
• Reconstruction of Events Leading to Injury:Study of Relevant DocumentsAnalysis of Field Performance InformationPhysical Examination of Pertinent FacilitiesStudy of the Failed Hardware
• Performed by Qualified Experts:Accomplished PromptlyEarly Notification of Insurance Company
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Research Results - I
• Estimated Cost of Product Recalls to Consumer Products Companies is Over $6 Billion a Year PLUS Public Relations Damages & Lost Sales
• Most Safety Defects Could Have Been Prevented During Design & Development
• Companies with Best Practices Have Lower Recall Rates, Better Quality & a Competitive Advantage
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Research Results - II• Product Liability Prevention Process –
Maturity Matrix
Level Phase Description
1 Troubled Key Processes Not in Place
2 Siloed Lack of Coordination Among Functions & Groups
3 Integrated Suboptimal Coordination Among Functions & Groups
4 World Class Optimized Coordination Among Functions & Groups
and Across Enterprise
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Research Results -IIIOverall Recall Rate for Consumer Products Companies
0.69
0.5
0.28
0
0.18375
0.3675
0.55125
0.735
0.91875
1.1025
1.28625
1.47
Siloed Integrated World Class
Company's Product Stewardship Assessment Framework
No.
of R
ecal
ls pe
r Com
pany
(per
$1
Billi
on
in S
ales
)
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Research Results - IV
0
50
100
150
200
250
300
No.
of R
ecal
ls
Consumer Products Safety Recalls
1999 2000 2001
218
248267
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Sources of Plaintiff & Defense Experts
• Where do Attorneys Find Their Experts?Technical Advisory Service for Attorneys
(TASA)EWitnessExpertLawExpertPagesFindExpertsForensisGroupOther Attorneys
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Becoming a Product Liability Expert
• Education
• Experience
• Publications (Articles, Texts & Handbooks)
• Recognitions (Awards, Certifications & Registrations)
• Availability
• Connections to Sources
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Step-by-Step Case Description
• Accident/Incident Description
• Plaintiffs vs. Defendants
• Depositions by Both Sides
• Product & Process Testing
• Expert Reports
• Depositions of Experts on Both Sides
• Trial by Jury vs. Out-of-Court Settlement
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Conclusion
• Need for Product Liability Prevention Presents Quality Professionals with Major Opportunities for Career Enhancement & Progression
• Product Liability Prevention Effectively Limits Both Company & Individual Exposure to Potential Lawsuits
• Consider What Your Role in Product Liability Prevention Should Be
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References - I
• “Elements of a Product Liability Risk Control Program (Manufacturers).” 14 pages. http://cna.com/riskcontrol.
• “Gain a Competitive Edge by Preventing Recalls.” Tavor White & Renata Pomponi. Quality Progress. August 2003. pp.41-49.
• “How a Good Quality Management System Can Limit Lawsuits.” Randall Goodden. Quality Progress. July 2001. pp. 55-59.
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References - II• “Quality and Society.” J.M. Juran. Juran’s
Quality Control Handbook. Fourth Edition. 1988. pp.34.19-34.22.
• “Thorough Defense Planning Against Product Liability Claims.” 8 pages. http://cna.com/riskcontrol.
• “Tips for Limiting Liability.” The Hartford. http://mb.thehartford.com/reduce_risk/risk_tips_product.asp.
• “Understanding the Focus of Product Liability Prevention.” Randall Goodden. http://www.refresher.com/!liability.html.