Product Liability Goes Global

Ross, Kenneth, Risk Management

Product liability concepts, which were developed in the United States in the early 1960s, leapt across the ocean in 1985 when the European Union adopted the legal concept of strict liability. Despite this development in Europe, in the last 20 years, litigation has not occurred with much frequency.

However, more recently, the passage of product liability and product safety laws and regulations has expanded significantly, both in the European Union and all around the world. This has resulted in a dramatic increase in litigation and potential liability in foreign countries and could also increase product liability risks in the United States.

A U.S. manufacturer and product seller must consider product liability as a global risk. It is more likely that manufacturers will be sued anywhere they sell their products and possible that this litigation could adversely affect litigation in the United States. Similarly, it is possible that manufacturers could be subject to government regulatory actions or be required to undertake foreign recalls or other remedial programs.

Any company that sells in the United States and in global markets must consider these new risks when designing products, selling products, tracking post-sale field experience, and trying to comply with all applicable laws and regulations wherever their products are sold. Let's first look at the new laws and regulations.

European Union Product Liability Laws and Litigation

The Product Liability Directive, adopted in 1985 by the European Union Parliament, provides, that "[t]he producer shall be liable for damage caused by a defect in his product." Producers include manufacturers, component part suppliers, importers and anyone using a trade name or trademark. A product is defective when it "does not provide the safety which a person is entitled to expect."

Lovells, an international law firm based in England, undertook a survey between 2001 and 2003 of companies in Europe concerning their views on litigation and product safety. Seventy-seven …

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Publication information: Article title: Product Liability Goes Global. Contributors: Ross, Kenneth - Author. Magazine title: Risk Management. Volume: 53. Issue: 2 Publication date: February 2006. Page number: 10+. © 1999 Risk Management Society Publishing, Inc. COPYRIGHT 2006 Gale Group.

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