Product%20Liability - PowerPoint PPT Presentation

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Product%20Liability

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Product Liability Jacob Bervig Donny Moberley Steve Staskiewicz Introduction Competition causes premature release of products. Technical complexity has increased ... – PowerPoint PPT presentation

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Title: Product%20Liability


1
Product Liability
  • Jacob Bervig
  • Donny Moberley
  • Steve Staskiewicz

2
Introduction
  • Competition causes premature release of products.
  • Technical complexity has increased severity and
    frequency of injuries.
  • 50 million product accidents a year.
  • Annual cost of 50 billion.

3
Introduction Cont.
  • Jury verdicts favor injured party.
  • Sympathy vote.
  • Manufacturers try to presume these costs and pass
    it on to the customer.
  • Smaller companies forced into bankruptcy.

4
Introduction Cont.
  • Three main reasons for product injuries
  • Behavior or knowledge of product user.
  • Environment
  • Designed poorly, defective.

5
Introduction Cont.
  • Companies can not totally account for behavior or
    knowledge.
  • Safety and quality must be engineered into the
    product.
  • Manufacturers are able to see safest design
    better than product user.

6
History
  • Grain producers were held liable for quality in
    ancient times.
  • Quality was based on one sample.
  • By fourteenth century textile sampling was
    common.
  • Seals and official stamps were used.

7
History Cont...
  • In the fourteenth century there product lawsuits.
  • By the middle of the eighteenth century there
    were two concepts.
  • Caveat emptor (Let the buyer beware)
  • Privity of contract

8
History Cont...
  • 1916 MacPherson V. Buick
  • Buick held negligent by failing to inspect
    defective wheel from supplier.
  • Ended privity of contract and buyer beware.

9
Product Safety Laws
  • Consumer Product Safety Act of 1972.
  • Protect public against unreasonable injury.
  • Assist in comparing safety of products.
  • Develop uniform safety standards.
  • Promote research and investigate product safety.

10
Product Safety Laws
  • Many states and municipalities have their own
    laws.
  • Similar laws
  • Refrigerator Safety Act
  • Flammable Fabrics Act

11
Exempted Products
  • Cars
  • Boats
  • Airplanes
  • Food
  • Drugs
  • Cosmetics
  • Tobacco and Poisons.

12
Product Liability Laws
  • Plantiff must prove causation in every case.
  • 51 likely to have caused the injury.
  • Proving defectiveness is the heart of most court
    cases.
  • Warranties help limit liability.

13
Defenses
  • Negligence
  • Assumption of risk
  • Misuse
  • Statutes of Repose (useful life) 8,10, or 12
    years.

14
Financial Loss
  • Defendant losses more than money.
  • Costs
  • Recalls, replacements, reputation, production
    delays, quality.

15
The Future
  • Asbestos, Dalkon shield, and Bendectin grow 4
    each year.
  • Synthetic and toxic products.
  • Europe adopting strict liability laws.

16
Prevention Program
  • Organization
  • New-Product Review
  • Initial Production Review
  • Periodic Production Audits
  • Control of Warranties, Advertisements,
    Agreements, etc.
  • Warning Labels/Instructions
  • Complains/Claims
  • Retention of Records
  • Product Recall Plan

17
Organizational Structure
  • Dependent on size talents
  • Specify responsibilities
  • Necessary authority
  • Product-safety committee
  • Legal
  • Design
  • Manufacturing
  • Marketing
  • Quality
  • Safety engineer

18
New-Product Review
  • Prototype
  • First least expensive
  • Consumer safety first
  • Function, cost, sales appeal second
  • Will product work under conditions that
  • Are adverse
  • Have been considered abusive
  • A plaintiffs attorney will consider foreseeable
  • Product Review Team

19
Product Review Team
  • No preconceived notions about product
  • Evaluate products compliance with
  • present and foreseeable standards
  • Applicable codes, laws, and regulations
  • Consumer requirements and anticipated use
  • Past injury data

20
  • Crushing hazards
  • Shearing hazards
  • Cutting hazards
  • Entanglement haz.
  • Drawing-in hazards
  • Trapping hazards
  • Impact hazards
  • Puncture hazards
  • Abrasion hazards
  • Exposed live part
  • Thermo hazards
  • Noise hazards
  • Exposure hazards
  • Fire hazards
  • Explosion hazards
  • Unexpected start-up hazards
  • Electrostatic exposure

21
Initial Production Review
  • First production items
  • Limited production run
  • Determine adequacy of factors

22
Warranties, Advertisements, Agreements
  • Terms conditions are limited to statement of
    merchantability
  • Legalists analyze all advertising
  • Special warranty provisions?
  • Analysis of dealer distributorship/franchise
    agreement of defective items
  • Nonconformity (unit)
  • Evaluation of cost problems of warranties

23
Warning labels/Instructions
  • Inadequate/nonexistent negligence
  • Engineers are a no go
  • Symbols and pictures
  • Warning calls attention to danger
  • Instructions prescribe procedures

24
Complaints/Claims
  • Product safety engineer
  • Cause of complaint
  • Nature seriousness of complain
  • Failure mode
  • Age of defect, present when sold?
  • Negligence of parties
  • The quicker the better

25
Retention of Records
  • Shipment, operator, machine, time, etc.
  • Expected useful life of product plus 18 years.

26
Other considerations
  • Product-Recall plan
  • Customer Service
  • Redress

27
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