Quality Responsibilities in Product Liability

1
Quality Responsibilities in Product Liability

• Presented by
• Jack B. ReVelle, Ph.D.
• ReVelle Solutions, LLC
• October 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 Products
• Erosion 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 Companys Product
  Liability Program
• Product Liability Program Champion
• Is Best Selected From Quality Organization
• Should be Obviously Driven
• Should Chair Product Liability Program Steering
  Committee

7
Tips for Limiting Product Liability - II

• Steering Committee Membership
• Upper Limit of 3 to 4 Members
• Source Functions Quality, Reliability, Finance,
  Risk Management, RD
• Steering Committee Objectives
• Develop Total Prevention Program
• Manage External Insurance Reps Assigned Defense
  Attorneys Handling Companys Cases

8
Tips for Limiting Product Liability - III

• Fully Document Your Companys 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
  Products 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

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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 Agreements
• Selection of Suppliers Subcontractors
• Design 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 Analyses
• Effective Warnings Instructions
• Reliability Tests Written Reports
• Selection 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 Documents
• Recognition Handling of Potential Incoming
  Product Liability Phone Calls
• Handling Accident Investigations
• Handling 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 Liability
• Organizational vs. Professional
• Civil vs. Criminal
• Products

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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)

17
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
• Negligence
• Strict Liability (No Proof of Negligence)
• Breach of Warranty of Fitness
• Types of Product Defects That Incur Liability
• Design
• Manufacturing
• Marketing

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Defensive Actions Against Product Liability
Lawsuits

• Reconstruction of Events Leading to Injury
• Study of Relevant Documents
• Analysis of Field Performance Information
• Physical Examination of Pertinent Facilities
• Study of the Failed Hardware
• Performed by Qualified Experts
• Accomplished Promptly
• Early 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

22
Research Results -III
23
Research Results - IV
24
Sources of Plaintiff Defense Experts

• Where do Attorneys Find Their Experts?
• Technical Advisory Service for Attorneys (TASA)
• EWitness
• ExpertLaw
• ExpertPages
• FindExperts
• ForensisGroup
• Other Attorneys

25
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. Jurans
  Quality Control Handbook. Fourth Edition. 1988.
  pp.34.19-34.22.
• Thorough Defense Planning Against Product
  Liability Claims. 8 pages. http//cna.com/riskcon
  trol.
• Tips for Limiting Liability. The Hartford.
  http//mb.thehartford.com/reduce_risk/risk_tips_pr
  oduct.asp.
• Understanding the Focus of Product Liability
  Prevention. Randall Goodden. http//www.refresher
  .com/!liability.html.