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Risk Management e Assicurazione per lIndustria e le Attività Aeronautiche Alessio Totaro - Milano - 15 novembre 2006 United States case-law identifies.

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Presentation on theme: "Risk Management e Assicurazione per lIndustria e le Attività Aeronautiche Alessio Totaro - Milano - 15 novembre 2006 United States case-law identifies."— Presentation transcript:

1 Risk Management e Assicurazione per lIndustria e le Attività Aeronautiche Alessio Totaro - Milano - 15 novembre 2006 United States case-law identifies three grounds bringing to strict product liability: Manufacturing defect: The product is well-designed but the way in which it was made makes it unsafe; Design defect: The design of the product is unsafe, so the entire product line is unreasonably dangerous. Failure to warn: The manufacturer may design a product thats perfectly safe and has no manufacturing defects, but then the producer fails to include proper warnings or instructions for safe operation. US Product Liability

2 Risk Management e Assicurazione per lIndustria e le Attività Aeronautiche Alessio Totaro - Milano - 15 novembre 2006 California Federal Court Barker v. Lull Eng'g Co., Inc A defective product is one that differs from the manufacturer's intended result or from other ostensibly identical units of the same product line" Manufacturing Defect Definition

3 Risk Management e Assicurazione per lIndustria e le Attività Aeronautiche Alessio Totaro - Milano - 15 novembre 2006 Florida Appellate Court, 4 Dist Piper Aircraft Corp. v Coulter 1983 In action against manufacturer of light aircraft, based on defective latch which allowed door to open during flight, causing crash and deaths of occupants, jury condemned the manufacturer under strict liability where egregious behavior of manufacturer was shown, i.e., continued use of latch after knowledge from test pilot that manufacture was defective. Manufacturing Defect in AVN

4 Risk Management e Assicurazione per lIndustria e le Attività Aeronautiche Alessio Totaro - Milano - 15 novembre 2006 Court of Appeal of California, Second Appellate District, Division Two FLUOR CORPORATION, Plaintiff, v. JEPPESEN & COMPANY, Defendant July 23, 1985 In action against maker and producer of aerial navigation airport approach chart, for loss of plane and death of passengers when it crashed into hillside, failure to show hill, which was highest point in area, while showing lower hill which plane could have cleared. A product is defective in design either if the product has failed to perform as safely as an ordinary consumer would expect when used in an intended or reasonably foreseeable manner Design Defect

5 Risk Management e Assicurazione per lIndustria e le Attività Aeronautiche Alessio Totaro - Milano - 15 novembre 2006 New York Southern District Court In re: September 11 Litigation, 2003 In determining whether cockpit doors of jumbo jet hijacked by terrorists were unreasonably dangerous the Court underlined: it is reasonably foreseeable that aircraft manufacturer's failure to design a secure cockpit could contribute to a breaking and entering into, and a take-over of, a cockpit by hijackers or other unauthorized individuals, substantially increasing the risk of injury and death to people and damage to property. This is sufficient to establish manufacturer's duty to victims who were killed or injured when commercial aircraft crashed into building, for negligent design. Liability for Design Defect

6 Risk Management e Assicurazione per lIndustria e le Attività Aeronautiche Alessio Totaro - Milano - 15 novembre 2006 Pursuant to US Case Law: Manufacturers and sellers, even after the purchase of the product, must give warnings to users about newly discovered dangers which render the product defective or dangerous. Manufacturers and sellers must put into practice also an after market warning procedure with: - operation manuals amendments; - update kits; - service bulletins; - service communications. The main reason of manuals failure to warn lies in the fact that manuals are often prepared by technicians who do not have a broad enough risk management or accident prevention perspective. Failure to Warn

7 Risk Management e Assicurazione per lIndustria e le Attività Aeronautiche Alessio Totaro - Milano - 15 novembre 2006 New York - Court of Appeal, 1969 Braniff Airways, Inc. v Curtiss-Wright Corp. The action was brought by injured passengers and an airline against the manufacturer in respect of an engine used in a Douglas DC-7C airplane which crashed: the manufacturer was aware of a scuffing problem and of cylinder barrel separation nearly eight months before the crash but took no effective action to remedy the problem. Although a manufacturer is not under a continuing duty to improve its product even if human safety is involved, after such a product has been sold and dangerous defects in design have come to the manufacturer's attention, the manufacturer has a duty either to remedy these defects or, if complete remedy is not feasible, at least to give users adequate warnings and instructions concerning efforts for minimizing the danger. Duty to Inform Aircraft Owners of Defect Discovered After Manufacture

8 Risk Management e Assicurazione per lIndustria e le Attività Aeronautiche Alessio Totaro - Milano - 15 novembre 2006 Pennsylvania Supreme Court Walton v Avco Corp. In strict liability action arising from deaths of two persons in a crash caused by failure of oil pump which was component of the engine. Jury found that engine was defective, it is proper to impose liability on manufacturer based on its failure to warn owners of danger posed by defective component. Manufacturer of finished product has duty to warn regarding defective component discovered to be such after manufacture and sale, based on its having incorporated defective part into its finished product. Moreover, where finished product manufacturer has been informed by component manufacturer of defect in component, finished product manufacturer also has duty to warn based on its having knowledge of defect. Post-Sale Duty to Warn

9 Risk Management e Assicurazione per lIndustria e le Attività Aeronautiche Alessio Totaro - Milano - 15 novembre th Circuit Court 1987 Moorhead v. Mitsubishi Aircraft Int'l, Inc., The pilot encountered icing conditions, causing the aircraft to lose airspeed, spin out of control and crash. The district court found that the plane's airspeed indicator was responsible for the accident. The indicator had frozen during the flight, causing the indicated speed to increase with altitude. The aircraft manufacturer, after encountering similar malfunctions, had issued advisory warnings. The appellate court noted that there were alternate designs for this airspeed indicator, and therefore condemned the manufacturer for defective design. Combination of Liabilities

10 Risk Management e Assicurazione per lIndustria e le Attività Aeronautiche Alessio Totaro - Milano - 15 novembre 2006 Chinese Laws on Product liability: PRC General Principles of Civil Law (1986) Provides for civil compensation for damages due to product defects: (Articles 122, 130, 131, 132 and 136). PRC Product Quality Law (1993) Provides Strict Product Liability According to the Product Quality Law sellers and manufacturers are liable for injuries caused to consumers by their defective products. PRC Consumer Right Protection Law ( last review) Where products may pose a threat (even a generic one) to the safety of consumers, precise warnings must be given to consumers. China Product Liability

11 Risk Management e Assicurazione per lIndustria e le Attività Aeronautiche Alessio Totaro - Milano - 15 novembre 2006 Chinese case law provides a broad definition of Defect. unreasonable danger existing in the product that threatens the safety of person or property or a products non-conformity with common industry safety standards. There is no precise definition of unreasonable danger and there is no commonly recognised industry safety standards. In this scenario, unreasonable danger is usually interpreted as a danger which is beyond the usual expectation of common people. Problems With Chinese Product Liability Law

12 Risk Management e Assicurazione per lIndustria e le Attività Aeronautiche Alessio Totaro - Milano - 15 novembre 2006 Article 27 of the PQL provides that products whose improper use is likely to cause the products themselves to be damaged or to endanger personal safety and/or the safety of property should carry warnings in Chinese. It is crystal clear that the problem lies with the impossibility to foresee every improper use. Problems With Chinese Concept of Failure to Warn

13 Risk Management e Assicurazione per lIndustria e le Attività Aeronautiche Alessio Totaro - Milano - 15 novembre 2006 In China, under the strict liability scheme, responsibility for defective products rests both on producers and sellers. Producers include those who appear to be producers even only by connecting their names, titles, trademarks or other distinguishable marks to the defective products. Who bears responsibility in China?


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