Quality Responsibilities in Product Liability Presented by Jack B. ReVelle, Ph.D. ReVelle Solutions, LLC October 23, 2006
Mar 27, 2015
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
9
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.