ICPHSO: U.S. and Canadian Product Liability and Safety Regulatory Risks Kenneth Ross Bowman and...
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ICPHSO: U.S. and Canadian Product Liability and Safety Regulatory Risks Kenneth Ross Bowman and Brooke LLP October 27, 2009
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Transcript of ICPHSO: U.S. and Canadian Product Liability and Safety Regulatory Risks Kenneth Ross Bowman and...
ICPHSO: U.S. and Canadian Product Liability and Safety Regulatory Risks
Kenneth RossBowman and Brooke LLP
October 27, 2009
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Product Liability
Liability of a manufacturer or someone
else in the chain of production and
distribution for personal injury, property
damage, or possibly economic loss
caused by the sale or use of a product.
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U.S. and Canadian Legal Requirements
Common law
Statutory law (laws, regulations)
Mandatory and voluntary
standards
State of the art
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Plaintiff’s Legal TheoriesTort theories Negligence
Strict Liability
Gross Negligence
Misrepresentation or Fraud
Contract theories Breach of Warranty
Breach of Contract
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Negligence
Failure of a manufacturer or anyone in
the chain of production or distribution to
exercise reasonable care in design,
manufacture, testing, and servicing as
well as warning of dangers in its
products and providing adequate
instructions.
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Strict Liability
Defective when sold
No substantial change
Unreasonably dangerous
Harm and person harmed foreseeable
Defect caused injury
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Plaintiff’s Legal Theories
Manufacturing defects
Design defects
Defects in warnings and
instructions
Marketing defects
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Contract and Warranty
Breach of contract
Breach of warranty
Express warranties
Implied warranties
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Manufacturing Defect
Product departs from its intended
design
Physically flawed, damaged, or
incorrectly assembled
True strict liability
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Defective Design
Definition: Defective if reasonably foreseeable
risks could have been reduced by adoption of a
reasonable alternative design at reasonable cost
Test: Risk-utility balancing -- compares
alternative design and current product design
Conformance with state of the art and standards
not absolute defense
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Defects in Warnings
Definition: Defective if reasonably
foreseeable risks could have been
reduced by providing reasonable
instructions or warnings and omission
renders product not reasonably safe
Not required for obvious hazards
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Laws and Regulations
A product is defective if it does not comply
with an applicable product safety statute or
administrative regulation -- if there is
causation
Compliance is admissible but may not be
determinative (i.e., may not be a defense)
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Voluntary Standards
Compliance with standards is generally not required; however,Certain laws may require complianceFailure to comply may have to be
explained away in courtCould be proof of state of the artMay need to exceed standards
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Product Certifications(UL, CSA, ETL, etc.)
Not an absolute defense in a product liability case
Considered a minimum like standards
Standard to be certified to may not cover all aspects of product safety
Certifying agency may not properly test to certification standards
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“State of the Art”
Product’s design conforms to industry custom;
Design reflects the safest and most advanced technology developed and in commercial use; or
Design reflects technology at the cutting edge of scientific knowledge and testing
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Post-sale duties
Potential penalties have increasedLegal requirements to monitor, report and undertake remedial programs have increased in U.S. and elsewherePlaintiff’s attorneys are beginning to understand and will attack manufacturer for failure to comply
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U.S. Common LawPost-sale warning is to be provided if:substantial risk of harmusers can be identified and can reasonably
be assumed to be unaware of riskcan be effectively communicated to those
at risk and acted upon; andrisk of harm is sufficiently great to justify
burden
No duty to recall or retrofit
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Regulatory Requirements
U.S. CPSC, NHTSA, FDA, USDA
Canada C-6
Health Canada
EU General Product Safety Directive
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CPSIA
Many more standards and regulations to comply with
More reporting
More recalls and public notice
Public database
Increased fines
Possible state law enforcement
Possible imprisonment
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Duty to Report to CPSC
If product: fails to meet a consumer product
safety standard or banning regulation, contains a defect which could create a
substantial product hazard to consumers, or
creates an unreasonable risk of serious injury or death
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C-6 (CCPSA)
Prohibition against manufacture,
importation, sale
Duty to report
Disclosing confidential information
Mandatory recalls
Fines
Imprisonment
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Conclusion
More reporting
More recalls
More fines
More litigation, individual and class action
More cross-border cooperation in litigation and regulatory compliance
