1. Quality Responsibilities in Product Liability Presented by Jack B. ReVelle, Ph.D. ReVelle Solutions, LLC October 23, 2006

2. 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. 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. 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. 5 Company Sources of Defensive Actions Senior Management Designers Manufacturing Quality Marketing Advertising Customer Service Documentation

6. 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. 7 Tips for Limiting Product Liability - II Steering Committee Membership Upper Limit of 3 to 4 Members Source Functions: Quality, Reliability, Finance, Risk Management, R&D Steering Committee Objectives Develop Total Prevention Program Manage External Insurance Reps & Assigned Defense Attorneys Handling Companys Cases

8. 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. 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

10. 10 Elements of a Product Liability Prevention System - I Company Policy & Organization Design, Research & Development Purchasing Quality Warning Labels & Instructions Packaging & Shipping Marketing & Sales

11. 11 Elements of a Product Liability Prevention System - II Field Service, Sales & Repair Field Monitoring Product Recalls Recordkeeping & Documentation Complaints, Incidents & Claims Legal & Contractual

12. 12 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

13. 13 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

14. 14 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

15. 15 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

16. 16 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. 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

18. 18 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

19. 19 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

20. 20 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

21. 21 Research Results - II Product Liability Prevention Process – Maturity Matrix Level PhaseDescription 1 TroubledKey Processes Not in Place 2 SiloedLack of Coordination Among Functions & Groups 3 IntegratedSuboptimal Coordination Among Functions & Groups 4 World ClassOptimized Coordination Among Functions & Groups and Across Enterprise

22. 22 Research Results -III

23. 23 Research Results - IV

24. 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. 25 Becoming a Product Liability Expert Education Experience Publications (Articles, Texts & Handbooks) Recognitions (Awards, Certifications & Registrations) Availability Connections to Sources

26. 26 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

27. 27 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

28. 28 References - I Elements of a Product Liability Risk Control Program (Manufacturers). 14 pages. http://cna.com/riskcontrol.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.

29. 29 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/riskcontrol. http://cna.com/riskcontrol Tips for Limiting Liability. The Hartford. http://mb.thehartford.com/reduce_risk/risk_t ips_product.asp. http://mb.thehartford.com/reduce_risk/risk_t ips_product.asp Understanding the Focus of Product Liability Prevention. Randall Goodden. http://www.refresher.com/!liability.html. http://www.refresher.com/!liability.html