According to a recent article for the Claims Journal by Kenneth Ross, Of Counsel to Bowman and Brook LLP, product liability litigation and regulatory activities can have an effect on one another. Product liability claims and lawsuits can result in government reports and recalls, and recalls can be the impetus for product liability and other lawsuits. And away we go …
Ross lays the clarifying groundwork by pointing out that, often, those defending litigation are not responsible for regulatory compliance. Similarly, those who work with the Consumer Product Safety Commission (CPSC) and other agencies do not work on litigation. Per Ross:
“This division of responsibilities results in a lack of coordination where a manufacturer sometimes fails to learn about a safety issue during litigation that creates a reportable matter to a government agency. It can also result in a manufacturer undertaking some corrective action as requested by the government that can adversely affect current litigation or help to create additional litigation.
So when should a report be made to the CPSC? According to Ross, the regulations state that if a defect and the possibility of a substantial product hazard exist. Another cause for reporting is if the product presents an unreasonable risk of serious injury or death.
Ross acknowledges that when it comes to the effect of litigation on the duty to report, the CPSC regulations can create “substantial confusion.” He poses possible scenarios and his professional opinion.
“Let’s say that there are incidents and the company investigates and determines that there is no defect in the product and really has no reason to conclude that the incident was caused by the product. In that case, there should be no duty to report.
“Then, a lawsuit is filed and an allegation is made that the product is defective and caused the injury. Does that create a duty to report? I don’t think so. Next, a plaintiff’s expert issues an opinion saying that the product is defective and that this defect caused the incident. Now is there a duty to report? If the manufacturer hires a defense expert who reviews the report, sees the product and then issues an opinion disagreeing with the plaintiff’s expert, I would say no. Many things are going on during discovery and there are going to be several opinions and a dispute over whether the product is defective and caused harm. I still think there is a good argument that there is no duty to report.
“But the CPSC may disagree with this conclusion.”
At the end of his informative article, Ross offers yet another conclusion, which can be helpful to manufacturers. Given the complex interrelationship between litigation and regulatory activities, and to minimize risk in post-sale activities, it would be wise to seek out attorneys who have expertise in both product liability and regulatory compliance.