Safety Management Chapter 9

Chapter 9 - Product Safety and Liability

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Occupational Safety & Health for Technologists, Engineers, and Managers
By David L. Goetsch

© 2011, 2008, 2005, 2002, 1999 Pearson Education, Inc.
Pearson Prentice Hall - Upper Saddle River, NJ 07458


• The U.S. has become the most litigious
industrialized country in the world.
– With approximately 70% of the world’s attorneys.

• Product manufacturers are being sued in large
numbers by users, misusers, and even abusers.
– These suits cost industry millions of dollars each year.

• The best way a manufacturer can prevent/defend
claims is by making a reasonably safe, reliable
product & providing instructions for proper use.

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By David L. Goetsch



PRODUCT LIABILITY AND THE LAW
• Prior to 1916, consumers and employees used
products and machines at their own risk.
– If injured while using a manufacturer’s product, a person
had no legal recourse.

• In 1916, the concept of negligent manufacture was
established in the law.
– Since then, concepts of breach of warranty and strict
liability in tort have also been added to the body of law
relating to product safety and product liability.

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By David L. Goetsch



Lawsuit Process
• Typically, product liability lawsuits fall within the
realm of civil law.
– Such suits do not involve criminal charges—rather, they
involve one party seeking monetary redress from another.

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By David L. Goetsch



History of Product Liability Law
• Until 1960, manufacturers were not held liable.
– Unless they produced flagrantly dangerous products.

• Nonliability, established in 1842 in English courts,
persisted in the U.S until the turn of the century.
– Four landmark cases have established what is still the
foundation of product liability law in the U.S.

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By David L. Goetsch



MacPherson v. Buick Motor Company
• This case established the concept of negligent
manufacture.
– The maker of a product can be held liable for its
performance from a safety & health perspective.

• While driving a Buick car, MacPherson lost control
and was injured in the resulting accident.
– The cause of the accident was a defective wheel, and
the courts ruled in MacPherson’s favor.

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By David L. Goetsch



Henningson v. Bloomfield Motors Inc.
• This case…
– Established the concept of breach of warranty.
– Broadened manufacturer liability to include people
without contractual agreements with the manufacturer.
– Limited protection manufacturers could derive from
using disclaimers with their products.

• Henningson purchased a new car for his wife, who
was involved in an accident while driving it, due to a
defective steering system.
– The car was damaged to such an extent that negligent
manufacture could not be proven.
– Mrs. Henningson had no contractual agreement with the
manufacturer, as Mr. Henningson had made the purchase.
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By David L. Goetsch



Greenman v Yuba Products Inc.
• This case established the concepts of strict liability
in tort and negligent design.
• Greenman sued Yuba Products Inc. after being
injured while using a lathe in the prescribed manner.
– His attorneys argued that the lathe’s design was defective
and that a breach of warranty had occurred.
– In finding in Greenman’s favor, the court broadened the
concept of negligent manufacture to include design of
the product.

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By David L. Goetsch



Van der Mark v. Ford Motor Company
• This case confirmed the concepts established in
Greenman v. Yuba Products Inc.
• Van der Mark sued Ford Motor Company when his
new car was destroyed because of a defective
braking system.
– In finding for Van der Mark, the Supreme Court
overturned a lower court decision against him.
• Thereby confirming the concept of negligent design.

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By David L. Goetsch



Strict Liability in Tort
• Paragraph 402A of the Second Restatement of
Torts (American Law Institute) reads, in part:
– One who sells any product in a defective condition
…is subject to liability for physical harm …if:
• The seller is engaged in the business of selling such a product.
• It is expected to, and does reach the user or consumer without
substantial change in the condition in which it is sold.

– The rule stated in Subsection (1) applies although:
• The seller has exercised all possible care in preparation and
sale of his product.
• The user or consumer has not bought the product from,
or entered into any contractual relation with the seller.

• This definition of strict liability has become the
standard and is used in the courts of most states.
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By David L. Goetsch



Strict Liability in Tort
• Tort law also includes the concept of duty to warn.
– The reason for warning labels on so many consumer
products, particularly those made for children.

• Paragraph 388 of the Second Restatement of Torts
established the following criteria for determining
whether a duty to warn exists:
– Potential for an accident when the product is used
without a warning, provided the use to which it is
put is reasonably predictable.
– Probable seriousness of injuries if an accident does occur.
– Potential positive effectiveness & feasibility of a warning.

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By David L. Goetsch



Statutory Product Liability Laws
• The Consumer Product Safety Act—with which
Ralph Nader is closely associated—has the most
direct application to product liability.
– 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 & regulations, and
minimize conflicts among regulations.
– To encourage research into causes of product-related
injuries, health problems & deaths, and how these can
be prevented.

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By David L. Goetsch



Applying Product Liability Laws
• To recover damages in a product liability case, a
person must satisfy the burden of proof by meeting
certain criteria, as shown.

Several important legal concepts are used to apply these criteria:
Patent defect, latent defect, prudent man concept.
Reasonable and unreasonable risk.

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By David L. Goetsch



• A patent defect is one that occurs in all items in a
manufactured batch, and sometimes result in
product recalls.
• A latent defect occurs in only one or a limited
number of copies in a batch.
• A key concept in product liability cases is the
concept of unreasonable risk.
– In determining whether risk is reasonable or unreasonable,
the prudent man concept is applied.

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By David L. Goetsch



• A reasonable risk exists when consumers…
–
–
–
–

Understand risk.
Evaluate the level of risk.
Know how to deal with the risk.
Accept the risk based on reasonable risk benefit
considerations.

• In other words, they behave prudently.

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By David L. Goetsch



• An unreasonable risk exists when consumers…
– Are not aware that a risk exists.
– Are not able to judge adequately the degree of risk, even
when they are aware of it.
– 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.

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By David L. Goetsch



Community Right-to-Know Act
• The Community Right-to-Know Act gives people the
right to obtain information on hazardous chemicals
being used in their communities.
– It applies to all companies that make, transport, store,
distribute, or use chemicals.

• The act has four main components:
–
–
–
–

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Emergency planning.
Emergency notification.
Reporting requirements.
Toxic chemical release reporting.

By David L. Goetsch



DEVELOPING A PRODUCT SAFETY PROGRAM
• The purpose of a product safety program is to limit
a company’s exposure to product liability litigation
and related problems—as much as possible.
– The key to limiting liability exposure is to develop and
maintain a comprehensive product safety program.

• At a minimum, the program should have three
functional components:
– Product safety coordinator, product safety committee,
and product safety auditor.

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By David L. Goetsch



EVALUATING A PRODUCT SAFETY PROGRAM
• The product safety auditor evaluates the program
continually to identify and recommend corrections
to the causes of product liability problems.

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By David L. Goetsch



ROLE OF THE SAFETY/HEALTH PROFESSIONAL
• There is no set rule for the role played by safety &
health professionals in a product safety program.
– In some cases, he/she is a member of the product safety
committee, typically in large companies.
– In others, he/she doubles as the product safety program
coordinator, more often in smaller companies.
– In yet other cases, he/she may be designated as the
product safety auditor, in both large, and small companies.

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By David L. Goetsch



QUALITY MANAGEMENT & PRODUCT SAFETY
• It is widely accepted that the best way to limit liability
exposure is to produce a quality product.
– But what is a quality product?
• One that meets/exceeds customer standards & expectations.
• An inherent expectation is that the product, if used properly,
will cause no health or safety problems.

• Quality management (QM) can be an effective way
to ensure a company’s products consistently meet
or exceed customer standards and expectations.
– Reducing the company’s exposure to product liability.

• Management using QM means expecting total and
willing commitment to quality by all personnel.
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By David L. Goetsch



• QM is not just a superficial quick-fix program puffed
up by catchy slogans but lacking in substance.
– It requires a complete change in a company’s culture
and management philosophy.

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By David L. Goetsch



• In a QM setting, teamwork is engendered through
five key strategies:
– Involvement of all personnel who must implement
decisions, in making those decisions.
– Empowerment of all personnel to take action necessary
to bring about product &process improvements in their
areas, and to recommend action outside of their areas.
– Communication, both vertically and horizontally, on a
continual basis—supervisors and managers must listen.
– Reinforcement of teamwork-oriented behavior and
product and process improvements.
– Respect for the dignity and worth of all team members,
regardless of status.
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By David L. Goetsch



PRODUCT SAFETY PROGRAM RECORD KEEPING

• Despite a company’s best efforts, it may still have to
defend itself in a product safety lawsuit.
– It is critical to produce records to support its defense.
• Complete, accurate records can be very convincing in court.

• Records should be retained pertinent to all phases
of manufacturing, distributing & importing activities.
– From procurement of raw materials & components,
through production & testing, to marketing & distribution.

• As there is no way to know when the records may
be needed as evidence in a lawsuit, the only way
to be sure that they are retained long enough is
to retain them forever.
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By David L. Goetsch



USER FEEDBACK COLLECTION & ANALYSIS

• Collection & analysis of user feedback from users of
is critical to the success of a product safety program.
– Compliments, testimonials, complaints, problems, or
accident reports.

• Such feedback can help identify modifications that
should be made in a product’s design, problems
with manufacturing processes, need for a recall,
and potential lawsuits.
• Regardless of collection method, it is important to
have one central location into which feedback flows.
– Based on information acquired, a company must be able
to determine immediately if a substantial hazard exists.
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By David L. Goetsch



PRODUCT LITERATURE AND SAFETY

• Product literature—key in product safety
management—includes assembly/operating
instructions, warning labels & technical manuals.
• It is not uncommon for product liability lawsuits to
include charges relating to poor product literature.
– From a legal perspective, quality of product literature
is as important as the quality of the product itself.

• The proper role of safety instructions & warnings is
to tell users about hazards that cannot be removed
by design or controlled by guards & safety devices.
– A secondary role is to disclose a product’s intended use,
if self-evident, as well as recount safety features & guards.
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By David L. Goetsch



PRODUCT LITERATURE AND SAFETY

• Strategies for effective product literature:
– Minimize and simplify narrative text.
• Text should consist of short, simple words and sentences
written at a reading level below that of the intended audience.

– Use illustrations whenever possible.
• Tables, charts, graphs, flowcharts, photographs, & drawings,
should be used instead of narrative text when possible.

– Consider the eye appeal of the layout.
•
•
•
•

Do not justify (line up) right-hand margins of text material.
Use boldface print or underlining for short passages only.
Avoid reverse print except for short passages.
Use blue, black, green, or purple ink for single-color printing.

– Maximize drawing power.
• Produce literature that compels the reader to read it.
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By David L. Goetsch



PRODUCT RECALLS & SAFETY PROFESSIONALS

• Product recalls are an unfortunate fact of life today.
– Some argue that increases in product recalls are the
result of poor quality in manufacturing.
• Others blame the litigious nature of modern society.

• Safety & health professionals need to be prepared
to be a part of the crisis management team every
manufacturing company should have in place to
deal with this issue should it arise.
• When a company learns that one of its products
has caused harm to one or more of its customers,
it needs to take swift action to prevent future harm
to its consumers and to salvage its brand name
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By David L. Goetsch



THE SAFETY & HEALTH PROFESSIONAL’S ROLE

• In addition to helping prevent the problems that can
lead to recalls, safety & health professionals should:
– Know the mandatory notification requirements of any
government agencies that regulate the product in
question.
– Be prepared to advise higher management concerning
whether or not a product recall is warranted.
• As a member of the company’s crisis management team.

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By David L. Goetsch



GOVERNMENT REGULATORY AGENCIES

• Safety & health professionals should know which
government agencies regulate their products, if any.
– What the regulations are.
– How the company meets those regulations.
– When & how the company is required to provide
notification of a product recall.

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By David L. Goetsch



ADVISING HIGHER MANAGEMENT ON RECALLS

• Product recalls are always expensive.
– There is the cost of recalling the product itself.
– There are the potential costs of not recalling the product.

• In product recall situations, the right decision is one
that achieves the following results:
– Protect the company’s consumers—including intermediate
consumers who use your product in theirs.
– Reduce the risks associated with litigation.
– Preserve the company’s reputation and, in turn,
customer base.

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By David L. Goetsch



END
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By David L. Goetsch


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