Avoiding Product Liability Lawsuits
Updated: Jul 3, 2019
Recently Ford agreed to spend $640 million to replace door latches on nearly 2.4 million cars, trucks and vans because the doors can pop open while the vehicles are moving. The recall is so costly that the company cut its estimated full-year pretax profit to $10.2 billion from at least $10.8 billion.
Although customers have been complaining about the problem since 2014, Ford said it knows of just one crash and three injuries that may be related to the problem. So why would they agree to a voluntarily recall? In part to avoid product liability lawsuits, the cost of which could far exceed the price for fixing the problem.
Every year, defective, faulty or misused products cause serious injuries and property damage. In extreme cases, product recalls, high-profile negative publicity and loss of goodwill may occur.
A person may recover against a manufacturer or seller based on one or more of the following: strict liability, negligence and breach of warranty, depending on the law in the applicable state. The most commonly asserted theory is strict liability.
Strict liability allows a person injured by a defective or unexpectedly dangerous product to recover compensation from the maker or seller of the product without showing that the maker or seller was negligent, but that the product was defective or dangerous when it left their hands. This includes cases in which a manufacturer failed to provide ample warning about a product, even if there was no known defect.
New Jersey law requires manufacturers and sellers to ensure that their products are not in any way defective or dangerous to users. If any part of their product is unsafe or if using the product a certain way could be hazardous, companies must provide proper warnings.
Ensuring that your product is safe from risks is the best way to protect your business from liability lawsuits. While this may seem like a daunting task, there are steps you can take, particularly during development and production, when you have significant opportunity to build in safeguards.
Many risks can be eliminated or controlled during the product design phase. Take into account how the product will be used and the kind of hazards that may result. Labels, warnings and instructions should be provided if necessary, and be prominent and understandable. Regularly scheduled safety reviews should confirm that products comply with the latest industry and government standards.
Companies that import products, components, raw materials and sub-assemblies may bear responsibility for certain safety standards and requirements. Importers should make every effort to gather all pertinent information from suppliers.
In fact, it’s advisable for any manufacturer to establish documentation policies to meet applicable regulatory requirements and business objectives as part of the process of being prepared for possible product liability claims.
Making it easy for consumers to share their feedback and concerns can help companies avoid issues at an early stage, and create increased opportunities for improving products and services.
A comprehensive product liability protection program can help protect your business from strict liability claims. If you have any questions about this or would like to discuss your specific needs, please call me at 973-509-8500 x213 or email me at: LFarber@LFarberLaw.com.
The contents of this writing are intended for general information purposes only and should not be construed as legal advice or opinion in any specific facts or circumstances.