Safety Management Chapter 9

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Occupational Safety & Health for Technologists, Engineers, and Managers

By David L. Goetsch

© 2011, 2008, 2005, 2002, 1999 Pearson Education, Inc.

Pearson Prentice Hall - Upper Saddle River, NJ 07458

Chapter 9 - Product Safety and Liability

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By David L. Goetsch




• The U.S. has become the most litigious

industrialized country in the world.

– With approximately 70% of the world’s attorneys.

• Product manufacturers are being sued in large

numbers by users, misusers, and even abusers.

– These suits cost industry millions of dollars each year.

• The best way a manufacturer can prevent/defend

claims is by making a reasonably safe, reliable

product & providing instructions for proper use.

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By David L. Goetsch




PRODUCT LIABILITY AND THE LAW

• Prior to 1916, consumers and employees used

products and machines at their own risk.

– If injured while using a manufacturer’s product, a person

had no legal recourse.

• In 1916, the concept of negligent manufacture was

established in the law.

– Since then, concepts of breach of warranty and strict

liability in tort have also been added to the body of law

relating to product safety and product liability.

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By David L. Goetsch




Lawsuit Process

• Typically, product liability lawsuits fall within the

realm of civil law.

– Such suits do not involve criminal charges—rather, they

involve one party seeking monetary redress from another.

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By David L. Goetsch




History of Product Liability Law

• Until 1960, manufacturers were not held liable.

– Unless they produced flagrantly dangerous products.

• Nonliability, established in 1842 in English courts,

persisted in the U.S until the turn of the century.

– Four landmark cases have established what is still the

foundation of product liability law in the U.S.

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MacPherson v. Buick Motor Company

• This case established the concept of negligent

manufacture.

– The maker of a product can be held liable for its

performance from a safety & health perspective.

• While driving a Buick car, MacPherson lost control

and was injured in the resulting accident.

– The cause of the accident was a defective wheel, and

the courts ruled in MacPherson’s favor.

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By David L. Goetsch




Henningson v. Bloomfield Motors Inc.

• This case…

– Established the concept of breach of warranty.

– Broadened manufacturer liability to include people

without contractual agreements with the manufacturer.

– Limited protection manufacturers could derive from

using disclaimers with their products.

• Henningson purchased a new car for his wife, who

was involved in an accident while driving it, due to a

defective steering system.

– The car was damaged to such an extent that negligent

manufacture could not be proven.

– Mrs. Henningson had no contractual agreement with the

manufacturer, as Mr. Henningson had made the purchase.

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Greenman v Yuba Products Inc.

• This case established the concepts of strict liability

in tort and negligent design.

• Greenman sued Yuba Products Inc. after being

injured while using a lathe in the prescribed manner.

– His attorneys argued that the lathe’s design was defective

and that a breach of warranty had occurred.

– In finding in Greenman’s favor, the court broadened the

concept of negligent manufacture to include design of

the product.

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Van der Mark v. Ford Motor Company

• This case confirmed the concepts established in

Greenman v. Yuba Products Inc.

• Van der Mark sued Ford Motor Company when his

new car was destroyed because of a defective

braking system.

– In finding for Van der Mark, the Supreme Court

overturned a lower court decision against him.

• Thereby confirming the concept of negligent design.

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Strict Liability in Tort

• Paragraph 402A of the Second Restatement of

Torts (American Law Institute) reads, in part:

– One who sells any product in a defective condition

…is subject to liability for physical harm …if:

• The seller is engaged in the business of selling such a product.

• It is expected to, and does reach the user or consumer without

substantial change in the condition in which it is sold.

– The rule stated in Subsection (1) applies although:

• The seller has exercised all possible care in preparation and

sale of his product.

• The user or consumer has not bought the product from,

or entered into any contractual relation with the seller.

• This definition of strict liability has become the

standard and is used in the courts of most states.

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Strict Liability in Tort

• Tort law also includes the concept of duty to warn.

– The reason for warning labels on so many consumer

products, particularly those made for children.

• Paragraph 388 of the Second Restatement of Torts

established the following criteria for determining

whether a duty to warn exists:

– Potential for an accident when the product is used

without a warning, provided the use to which it is

put is reasonably predictable.

– Probable seriousness of injuries if an accident does occur.

– Potential positive effectiveness & feasibility of a warning.

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Statutory Product Liability Laws

• The Consumer Product Safety Act—with which

Ralph Nader is closely associated—has the most

direct application to product liability.

– To protect the public from the risk of injuries incurred

while using consumer products.

– To help consumers make objective evaluations of the

risks associated with using consumer products.

– To encourage uniformity in standards & regulations, and

minimize conflicts among regulations.

– To encourage research into causes of product-related

injuries, health problems & deaths, and how these can

be prevented.

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Applying Product Liability Laws

• To recover damages in a product liability case, a

person must satisfy the burden of proof by meeting

certain criteria, as shown.

Several important legal concepts are used to apply these criteria:

Patent defect, latent defect, prudent man concept.

Reasonable and unreasonable risk.

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• A patent defect is one that occurs in all items in a

manufactured batch, and sometimes result in

product recalls.

• A latent defect occurs in only one or a limited

number of copies in a batch.

• A key concept in product liability cases is the

concept of unreasonable risk.

– In determining whether risk is reasonable or unreasonable,

the prudent man concept is applied.

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• A reasonable risk exists when consumers…

– Understand risk.

– Evaluate the level of risk.

– Know how to deal with the risk.

– Accept the risk based on reasonable risk benefit

considerations.

• In other words, they behave prudently.

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• An unreasonable risk exists when consumers…

– Are not aware that a risk exists.

– Are not able to judge adequately the degree of risk, even

when they are aware of it.

– Are not able to deal with the risk, and the risk could be

eliminated at a cost that would not price the product

out of the market.

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Community Right-to-Know Act

• The Community Right-to-Know Act gives people the

right to obtain information on hazardous chemicals

being used in their communities.

– It applies to all companies that make, transport, store,

distribute, or use chemicals.

• The act has four main components:

– Emergency planning.

– Emergency notification.

– Reporting requirements.

– Toxic chemical release reporting.

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DEVELOPING A PRODUCT SAFETY PROGRAM

• The purpose of a product safety program is to limit

a company’s exposure to product liability litigation

and related problems—as much as possible.

– The key to limiting liability exposure is to develop and

maintain a comprehensive product safety program.

• At a minimum, the program should have three

functional components:

– Product safety coordinator, product safety committee,

and product safety auditor.

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EVALUATING A PRODUCT SAFETY PROGRAM

• The product safety auditor evaluates the program

continually to identify and recommend corrections

to the causes of product liability problems.

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ROLE OF THE SAFETY/HEALTH PROFESSIONAL

• There is no set rule for the role played by safety &

health professionals in a product safety program.

– In some cases, he/she is a member of the product safety

committee, typically in large companies.

– In others, he/she doubles as the product safety program

coordinator, more often in smaller companies.

– In yet other cases, he/she may be designated as the

product safety auditor, in both large, and small companies.

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QUALITY MANAGEMENT & PRODUCT SAFETY

• It is widely accepted that the best way to limit liability

exposure is to produce a quality product.

– But what is a quality product?

• One that meets/exceeds customer standards & expectations.

• An inherent expectation is that the product, if used properly,

will cause no health or safety problems.

• Quality management (QM) can be an effective way

to ensure a company’s products consistently meet

or exceed customer standards and expectations.

– Reducing the company’s exposure to product liability.

• Management using QM means expecting total and

willing commitment to quality by all personnel.

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• QM is not just a superficial quick-fix program puffed

up by catchy slogans but lacking in substance.

– It requires a complete change in a company’s culture

and management philosophy.

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• In a QM setting, teamwork is engendered through

five key strategies:

– Involvement of all personnel who must implement

decisions, in making those decisions.

– Empowerment of all personnel to take action necessary

to bring about product &process improvements in their

areas, and to recommend action outside of their areas.

– Communication, both vertically and horizontally, on a

continual basis—supervisors and managers must listen.

– Reinforcement of teamwork-oriented behavior and

product and process improvements.

– Respect for the dignity and worth of all team members,

regardless of status.

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PRODUCT SAFETY PROGRAM RECORD KEEPING

• Despite a company’s best efforts, it may still have to

defend itself in a product safety lawsuit.

– It is critical to produce records to support its defense.

• Complete, accurate records can be very convincing in court.

• Records should be retained pertinent to all phases

of manufacturing, distributing & importing activities.

– From procurement of raw materials & components,

through production & testing, to marketing & distribution.

• As there is no way to know when the records may

be needed as evidence in a lawsuit, the only way

to be sure that they are retained long enough is

to retain them forever.

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By David L. Goetsch




USER FEEDBACK COLLECTION & ANALYSIS

• Collection & analysis of user feedback from users of

is critical to the success of a product safety program.

– Compliments, testimonials, complaints, problems, or

accident reports.

• Such feedback can help identify modifications that

should be made in a product’s design, problems

with manufacturing processes, need for a recall,

and potential lawsuits.

• Regardless of collection method, it is important to

have one central location into which feedback flows.

– Based on information acquired, a company must be able

to determine immediately if a substantial hazard exists.

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By David L. Goetsch




PRODUCT LITERATURE AND SAFETY

• Product literature—key in product safety

management—includes assembly/operating

instructions, warning labels & technical manuals.

• It is not uncommon for product liability lawsuits to

include charges relating to poor product literature.

– From a legal perspective, quality of product literature

is as important as the quality of the product itself.

• The proper role of safety instructions & warnings is

to tell users about hazards that cannot be removed

by design or controlled by guards & safety devices.

– A secondary role is to disclose a product’s intended use,

if self-evident, as well as recount safety features & guards.

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By David L. Goetsch




PRODUCT LITERATURE AND SAFETY

• Strategies for effective product literature:

– Minimize and simplify narrative text.

• Text should consist of short, simple words and sentences

written at a reading level below that of the intended audience.

– Use illustrations whenever possible.

• Tables, charts, graphs, flowcharts, photographs, & drawings,

should be used instead of narrative text when possible.

– Consider the eye appeal of the layout.

• Do not justify (line up) right-hand margins of text material.

• Use boldface print or underlining for short passages only.

• Avoid reverse print except for short passages.

• Use blue, black, green, or purple ink for single-color printing.

– Maximize drawing power.

• Produce literature that compels the reader to read it.

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PRODUCT RECALLS & SAFETY PROFESSIONALS

• Product recalls are an unfortunate fact of life today.

– Some argue that increases in product recalls are the

result of poor quality in manufacturing.

• Others blame the litigious nature of modern society.

• Safety & health professionals need to be prepared

to be a part of the crisis management team every

manufacturing company should have in place to

deal with this issue should it arise.

• When a company learns that one of its products

has caused harm to one or more of its customers,

it needs to take swift action to prevent future harm

to its consumers and to salvage its brand name

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By David L. Goetsch




THE SAFETY & HEALTH PROFESSIONAL’S ROLE

• In addition to helping prevent the problems that can

lead to recalls, safety & health professionals should:

– Know the mandatory notification requirements of any

government agencies that regulate the product in

question.

– Be prepared to advise higher management concerning

whether or not a product recall is warranted.

• As a member of the company’s crisis management team.

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GOVERNMENT REGULATORY AGENCIES

• Safety & health professionals should know which

government agencies regulate their products, if any.

– What the regulations are.

– How the company meets those regulations.

– When & how the company is required to provide

notification of a product recall.

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ADVISING HIGHER MANAGEMENT ON RECALLS

• Product recalls are always expensive.

– There is the cost of recalling the product itself.

– There are the potential costs of not recalling the product.

• In product recall situations, the right decision is one

that achieves the following results:

– Protect the company’s consumers—including intermediate

consumers who use your product in theirs.

– Reduce the risks associated with litigation.

– Preserve the company’s reputation and, in turn,

customer base.

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By David L. Goetsch




END

Safety Management Chapter 9

Health & Medicine

upper saddle river

pearson prentice hall

prudent man concept

product safety auditor

product safety committee

liability strict liability

liability product literature

product safety program