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Chapter 9 Product Safety and Liability. Major Topics Product liability and the law Developing a product safety program Evaluating the product safety program.

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Presentation on theme: "Chapter 9 Product Safety and Liability. Major Topics Product liability and the law Developing a product safety program Evaluating the product safety program."— Presentation transcript:

1 Chapter 9 Product Safety and Liability

2 Major Topics Product liability and the law Developing a product safety program Evaluating the product safety program Role of the safety and health professional Quality management and product safety Product safety program record keeping User feedback collection and analysis Product literature and safety

3 Best way for manufacturers to limit exposure to product liability lawsuits Injuries resulting from the use (and often misuse) of products are the basis for an increasing number of product liability lawsuits. These suits cost the industry millions of dollars each year. The best way manufacturers can prevent or defend such claims is by manufacturing a reasonably safe and reliable product, and where necessary, providing instructions for its proper use. The key to achieving a reasonably safe and reliable product and at the same time reducing the product liability exposure is to build in product safety.

4 Steps in filing a product liability lawsuit 1. An injured party decides to seek redress against the manufacturer of a product and engages an attorney. 2. The attorney files a complaint in state or federal court. 3. The discovery period is undertaken, during which evidence is collected, depositions are taken, and the product is examined. 4. A trial date is set. 5. The trial takes place, or a settlement is reached out of court.

5 Discovery period in a product liability lawsuit The discovery period is the period during which evidence is collected, depositions are taken from expert witnesses, and the product is examined. Product examination may involve running a variety of tests and observing simulations. The length of time involved in completing this step often leads both parties to seek out of court settlements.

6 Concept of strict liability in tort One who sells any product in a defective condition unreasonably dangerous to the user or consumer or to his property is subject to liability for physical harm thereby caused to the ultimate consumer or user or to his property if the seller is engaged in the business of selling such a product and it is expected to and does reach the user or consumer without substantial change in the condition in which it is sold.

7 Three criteria governing a company’s duty to warn Three criteria for determining whether a duty to warn exists: 1. The potential for an accident when the product is used without a warning, provided the use to which it is put is reasonably predictable. 2. Probable seriousness of injuries if an accident does occur. 3. Potential positive effectiveness and feasibility of a warning.

8 Purposes of the Consumer Product Safety Act The act has 4 basic purposes: To protect the public from the risk of injuries incurred while using consumer products. To help consumers make objective evaluations of the risks associated with using consumer products. To encourage uniformity in standards and regulations and to minimize conflicts among regulations at the various levels of government. To encourage research into the causes of product related injuries, health problems, and deaths and how these things can be prevented.

9 Patent defect, Latent defect, and Prudent man concept Patent defect: is one that occurs in all items in a manufactured batch. Patent defects are the kind that sometimes result in product recalls. Latent defect: occurs in only one or a limited number of copies in a batch. Prudent man concept: A key concept in product liability cases is the concept of unreasonable risk. In determining whether a risk is reasonable or unreasonable, the prudent man concept is applied. A reasonable risk exists when consumers understand risk, evaluate the level of risk, know how to deal with the risk, and accept the risk based on reasonable risk-benefit considerations. An unreasonable risk exists when consumers are not aware the risk exists, consumers are not able to judge adequately the degree of risk even when they are aware of it, consumers are not able to deal with the risk, and the risk could be eliminated at a cost that would not price the product out of the market.

10 Community right To Know Act This act gives people the right to obtain information about hazardous chemicals being used in their communities. It applies to all companies that make, transport, store, distribute, or use chemicals. The act has 4 main components: Emergency planning: requires the establishment of local emergency planning committees (LEPCs) and state emergency response commissions (SERCs). Emergency notification: companies must report immediately the release of hazardous chemicals that exceed limits specified by the LEPC and SERC. Reporting requirements: Companies are required to maintain accurate and up to date information on chemicals that they produce, store, use, and transport. They are required to give LEPCs and SERCs information about how much of a given chemical is typically present on their site or sites and where it is stored. Toxic chemical release reporting: Companies must report their annual level of toxic emissions to the EPA and state level regulatory agencies.

11 Comprehensive Product Safety Program The purpose of a product safety program is to limit as much as possible a company’s exposure to product liability litigation and related problems by developing and maintaining a product safety program. At a minimum the program should have three functional components: product safety coordinator (coordinates and facilitates involvement of all departments within a company), product safety committee (representatives from all major departments), and product safety auditor (evaluate the adequacy of the organizations product safety program).

12 Assigning product safety coordinator duties to executive of the company The factor that contributes most to the success or failure of a product safety program is the coordinator’s level of authority. The higher the level of authority, the more likely the program is to succeed.

13 Safety and health professional role in product safety program Safety professionals, because of their knowledge of plant operations and because of their general expertise in safety matters, can evaluate and offer comments on the company’s product safety program. Safety professionals, because of their experience in safety training, can evaluate product safety related training programs, developed as part of the product safety program. Safety professional because of their knowledge of accident investigation techniques, can assist in conducting product related accident investigation. Safety professionals can provide safety surveillance in production areas. This can help to prevent errors and product related accidents. Because of their experience in developing and implementing employer safety programs, safety professionals are aware not only of potential product safety hazards, but also of ways in which customers misuse products. Therefore a knowledgeable safety professional should be used as a consultant to the product safety program coordinator and the auditor.

14 Quality Management [QM] – Key Strategies Quality Management can be an effective way to ensure that a company’s product consistently meets or exceeds customer standards and expectations thereby reducing the company’s exposure to product liability. In a QM setting, teamwork is engendered through 5 key strategies: Involvement: of all personnel who must implement decisions in making those decisions. Empowerment: of all personnel to take the action necessary to bring about product and process improvements in their areas of responsibility and to recommend action outside of their areas. Communication: both vertically and horizontally on a continual basis. Communication must be a two way activity. That means supervisors and managers must listen. Reinforcement: of teamwork oriented behavior and product and process improvements. Any rewards given, whether they involve money, recognition, or any other reinforcer, should be given to teams, not individuals. Respect: for the dignity and worth of all team members, regardless of the status. This is critical. A team is like a family in that every member is important. Training and continual retraining are fundamental to QM. Employees must know how to do their jobs before they can be expected to do them well. Doing well means approaching all tasks in a manner that results in continual productivity and quality improvements while simultaneously ensuring a safe and healthy workplace.

15 Record keeping and product safety Despite a company’s best efforts, it may still have to defend itself in a public safety lawsuit. When this happens, it is critical that the company is able to produce records to support its defense. Consequently, records should be retained that are pertinent to all phases of a company’s manufacturing, distributing, and importing activities, from the procurement of raw materials and components, through production and testing, to the marketing and distribution of the finished product. Comprehensive product safety records are also necessary to satisfy compliance requirements of many federal regulations (fig 9-6, page191). Because there is no way of knowing when the records may be needed as evidence in a lawsuit, they need to be retained forever. Advances in computer technology can help do this.

16 High quality, effective product literature A key component in a product safety management program is a company’s product literature. It is not uncommon for product liability lawsuits to include charges relating to poorly written product literature. 1. Minimize and simplify narrative text: the text should consist of short, simple words and sentences written at a reading level below that of the intended audience. 2. Use illustrations where ever possible: Illustrations supplemented by the written word can be an effective approach. 3. Consider the eye appeal of the layout: Use blue, black, green or purple ink for single color printing on packages (more in text book). 4. Maximize drawing power: Use of headlines, widely recognized symbols, and color increases the drawing power of the literature. Product literature should be accurate – never exaggerate or mislead users.

17 Summary Manufacturers of products are liable for physical harm that results from the use of their product. The consumer products safety act is designed to protect the public from injuries. A product safety program should include a product safety coordinator, a product safety committee, and a product safety auditor. Quality management makes quality the responsibility of all employees. Customer feedback helps make product improvements. Product literature defines product’s intended use and informs customers of hazards that cannot be eliminated in the product.

18 Home work Answer questions 1, 6, 8, 13, and 14 on page Explain the best way for a manufacturer to limit its exposure to product liability lawsuits. 6. What are 2 purposes of the Consumer Products Safety Act? 8. Explain the reporting requirements component of the Community Rights To Know Act. 13. Why is record keeping so important with product safety? 14. List 4 strategies for producing high quality effective product literature.


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