Get Ahead of Litigation with Product Stewardship
Before releasing a product, you complied with all the necessary regulations. So if your product causes harm to a customer, are you protected from lawsuits? Not necessarily, says Frank Leone, attorney and partner at Hollingsworth LLP. “Compliance with the regulations is the starting point. You have to do that, but even if you fully comply with the regulations, then you can potentially face liability,” he says. “Likewise, complying with industry standards is important but not necessarily a complete defense.”
Take asbestos, for example. At the time people were using it, it was known that the substance could cause injury in certain circumstances, but nobody knew the extent. When there was evidence that exposures could be more harmful than anticipated, the spotlight was turned back on product manufacturers and whether they could have avoided the problem with more testing or warnings about use.
Leone argues that product stewardship is a way to help companies avoid, minimize or defend against litigation. “A lot of product stewardship is beyond compliance, thinking about chemicals that we think are safe, but questions might be raised about them,” he says. “So that might be an incentive to use a different chemical.”
To bridge the gap between product stewardship and litigation, Leone will present Product Liability for Product Stewards at Stewardship 2016. “We'll talk about what kind of testing you need to be doing, how you need to document it and how to be careful about describing it,” he says. “If there is litigation, you'll be in the position of helping the company and not hurting the company.”
Leone’s suggestions include establishing and enforcing a code of conduct with suppliers. “You need to do audits. You need to do third-party testing, which some of the good companies do,” he says. “They go to China themselves and do their own testing; they don’t just rely on statements from their suppliers and try to follow it up the chain. That sort of responsibility is basic product stewardship, but we can talk about the practical effects of what happens when product stewardship isn’t done properly, and really bad litigation results.”