irective amended:
Directive 85/374/EEC: liability for defective products
Directive 1999/34/EC of the European Parliament and of the Council of 10 May 1999 amending Council Directive 85/374/EEC on the approximation of the laws, regulations and administrative provisions of the Member States concerning liability for defective products.
Monday, June 29, 2009
Saturday, June 13, 2009
Product Liability LAWS in EUROPE and the rest of the World
International Product Liability Laws
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Overview
Much has been written about the various European Union Directives enacted over the years, first establishing strict liability, and then providing more specific safety directives. Interestingly, this proliferation of product safety and product liability laws and standards has not really resulted in significant amounts of new litigation in Europe.
In fact, for U.S. manufacturers selling in Europe, the greatest risk appears to be that they either may not be allowed to sell into one or more countries, or customers will not buy their products if they fail to comply with these directives and additional technical standards. Similarly, with the passage of the Consumer Protection Law in Taiwan, the Toys and Children's Product Safety Ordinance in Hong Kong, and product liability and quality legislation in Japan and China respectively, Asian countries have taken major steps toward ensuring that only safe products are sold within their borders.
Like Europe, the rise of product liability standards in Asia means that manufacturers and retailers must pay even more attention to quality, product safety and product liability than in the past. In addition, all manufacturers who sell in the U.S. must consider the effect of compliance with foreign safety laws and standards on U.S. litigation. To the extent foreign sold products are or may be considered safer, the manufacturer runs the risk of providing the plaintiff with proof of an alternative design that can be used in a U.S. court.
This chapter highlights significant product safety legislation, directives and standards in Europe, Australia, Taiwan, Japan, China and Hong Kong. This chapter merely provides a starting point for those affected by these laws. They must still spend considerable time to ensure compliance. The current interpretation and enforcement policies of these laws in each individual country will evolve quickly. Any manufacturer must obtain current information as they try to comply.
Europe
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The European General Product Safety, Product Liability & Product Warranty Directives
There are few lesser known European Directives that could have an impact on your business. Although we are not lawyers and not qualified to dispense legal advice, you should be aware of these three directives that can affect component and finished medical device manufacturers.
Other than the Medical Device Directive we all know, there are three directives designed to protect consumers and users in Europe. You should have a basic understanding of each one. They are the General Product Safety Directive, Product Liability Directive and the Product Warranty Directive.
European General Product Safety Directive (2001/95/EC)
The original directive (92/59/EEC) was revised and replaced with (2001/95/EC) in December 2001. The new version went into effect in most countries in January 2004 (later for 10 new EU countries and Oct. 1, 2005 in the UK). The directive covers nearly all products sold in the EU.
In general, it places responsibility on suppliers of consumer goods to make sure their products are safe for normal and foreseeable use. Obviously the goal is to make sure producers are placing safe products on the market, but it doesn't end there. The directive requires producers to supply consumers with relevant information that enables them to assess the risks inherent in that product. It takes into account various characteristics including packaging/labeling, instructions for use and disposal, packaging, maintenance and more.
You might think that finished device manufacturers are the only ones who need to contend with the issue of product safety. Not true. Importers, private labelers, representatives and, to a lesser degree, distributors, wholesalers and retailers are all culpable as well.
The directive requires "producers" to take appropriate action in the event of a product crisis, including notifying the appropriate competent authorities, temporarily withdrawing the product from the marketplace, warning consumers of a potential problem or, in severe cases, recalling product already in the marketplace.
To aid the compliance effort, the EU has implemented a single rapid alert system called RAPEX for reporting dangerous consumer products. It allows the rapid exchange of information among member countries. If, for example, a problem arises with your product in several member countries, that information is consolidated and may be disseminated to all EU competent authorities. At that point, a public warning might be issued or in extreme cases, a product recall might be ordered.
Product Liability Directive (85/374/EEC)
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prepare for PRODUCT RECALL, how to
Preparing for product recall: risk managers may need more than general liability to insure against recall loss
Risk & Insurance , April 1, 2003 by Mindy W. Toran
A rash of product recalls in U.S. poultry processing plants last fall has once again brought to bear the importance of preparing for a product recall. The challenges in dealing with a recall are numerous. They include legal, financial, regulatory and operational issues. But careful planning and risk analysis can prevent a manageable problem from becoming a catastrophe.
The case of two poultry processing plants in the Northeast illustrates the risks and opportunities involved in product recalls.
Last fall the Centers for Disease Control and Prevention (CDC) and the U.S. Department of Agriculture's Food Safety and Inspection Service (FSIS) began investigating an outbreak of listeriosis that sickened at least 53 and killed eight people in eight Northeastern states.
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Pilgrim's Pride, a Philadelphia-area poultry processor, and J.L. Foods Co. Inc., of Camden, NJ., voluntarily recalled more than 200,000 pounds of poultry products each after their plants were found to contain strains of listeria similar to the strain identified in the Northeast outbreak.
Pilgrim's Pride, which processes and distributes poultry under the Wampler Foods brand, initiated a voluntary recall of more than 295,000 pounds of turkey and chicken in October. The recall quickly expanded to 27.4 million pounds of poultry within a week. No illnesses associated with the strain in the Northeast outbreak were linked to any Wampler products.
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Lead Paint LIABILITY
Mattel, Fisher-Price to Pay $2.3 Million Civil Penalty for Violating Federal Lead Paint Ban
Penalty is highest ever for CPSC regulated product violations
WASHINGTON, D.C. - As part of its commitment to protecting the safety of children, the U.S. Consumer Product Safety Commission (CPSC) announced today that Mattel Inc., of El Segundo, Calif. and its wholly owned subsidiary, Fisher-Price Inc., of East Aurora, N.Y. have agreed to pay a $2.3 million civil penalty for violating the federal lead paint ban.
The penalty settlement, which has been provisionally accepted by the Commission, resolves CPSC staff allegations that Mattel and Fisher-Price knowingly (as defined in the Consumer Product Safety Act) imported and sold children’s toys with paints or other surface coatings that contained lead levels that violated a 30-year-old federal law. In 1978, a federal ban was put in place which prohibited toys and other children’s articles from having more than 0.06 percent lead (by weight) in paints or surface coatings. In 2007, about 95 Mattel and Fisher-Price toy models were determined to have exceeded this limit. Lead can be toxic if ingested by young children and can cause adverse health consequences.
This civil penalty, which is the highest for violations involving importation or distribution in commerce of a regulated product and is the third highest of any kind in CPSC history, settles the following allegations:
- Mattel imported up to 900,000 non-compliant toys between September 2006 and August 2007, including the “Sarge” toy car and numerous Barbie accessory toys, and distributed most of them to its retail customers for sale to U.S. consumers. The “Sarge” car was recalled in August 2007 and the Barbie toys were recalled in September 2007.
- Fisher-Price imported up to 1.1 million non-compliant toys between July 2006 and August 2007, including certain licensed character toys and the Bongo Band, GEOTRAX locomotive, and Go Diego Go Rescue Boat toys. Most of these toys were distributed to retail stores for sale to consumers. The licensed character toyswere recalled in August 2007, the Bongo Band and GEO TRAX toys were recalled in September 2007, and the Go Diego Go Boat toys were recalled in October 2007.
“These highly publicized toy recalls helped spur Congressional action last year to strengthen CPSC and make even stricter the ban on lead paint on toys,” said CPSC Acting Chairman Thomas Moore. “This penalty should serve notice to toy makers that CPSC is committed to the safety of children, to reducing their exposure to lead, and to the implementation of the Consumer Product Safety Improvement Act.”
This settlement also resolves other potential matters. In agreeing to the settlement, Mattel and Fisher-Price deny that they knowingly violated federal law, as alleged by CPSC staff.
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Saturday, June 6, 2009
Managing the risk of PRODUCT RECALL
Product Recall – Managing the Risk
The concept of product recall is gaining an increasingly higher profile in the global world of commerce and, as such, is getting attention at board and shareholder level for many businesses. As the quote above indicates, businesses all too often deal with this type of risk in a reactive way, but it is those that are proactive that will have significant competitive advantage.
Product recall is a reality which an increasing number of businesses are facing, and for a variety of reasons. Irrespective of what a company produces, and whether or not it has the most stringent product safety mantra possible, there is always a chance that things could go wrong. And just as we buy a burglar alarm for our homes in the hope that we will never have to use it, businesses would be wise to create a robust strategy prior to any incident. In an ideal world, this strategy will never have to be fully implemented, but if a company has the right philosophy, it is far more likely to weather the potential storm than if it is simply reactive.In the European Union, it is estimated that the current effectiveness of recalls runs at around 30-40% in the consumer goods sector – when you consider that there were over 1,000 recalls in the EU in 2007, that’s a lot of unaccounted-for dangerous products. There is an opportunity to lead in your sector through efficiency and, potentially, there is a competitive advantage in being able to say that you successfully recalled over 90% of your product.
Complexity of Supply
Cutting costs is an inevitable part of doing business in a competitive environment and in the world of manufacturing, moving production to regions where labour and raw materials are significantly cheaper has, over the last 20 years, been the obvious solution. But the savings generated can often be significantly diminished, if not negated, through a badly managed off shore production strategy. This is represented by a hypothetical scenario outlined below:SOURCE
PRODUCT LIABILITY RISKS
Produbt liability risks and INSURANCE
Subject:
Industries:
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Products liability, a sword of Damocles
THE CONCEPT of liability insurance probably began with employers being made responsible for accidents and/or injuries to their workmen. Later with the development of motor transport the liability concept was extended to cover loss or damage that may accrue to third party personnel or property in motor accidents.
Now, in almost every industrial / commercial activity, there is need to take care of possible liabilities. One such liability is in respect of products and services that can cause damage to buyers on account of some defect in the product or service concerned. The liability is slowly but surely assuming a global aspect. Manufacturers of products or providers of services that are exported to various countries could become liable for damages in the event of their exports being harmful or defective. The awareness of this liability has spread so much that in the case of most exports from India, buyers now-a-days insist on product liability coverage upto stipulated limits being taken by their suppliers.
Coverage
The product liability policy will indemnify the insured against all sums upto the limits specified for which the insured shall become legally liable to pay compensation for :
a) Accidental bodily injury or illness to any person not being a member of the insured's family or engaged in or upon the service of the insured; and
b) Accidental loss or damage to property not being property belonging to or in the custody of or in the control of the insured or any member of the insured's family or any person who at the time of the accident is engaged in and upon service of the insured.
This indemnity will be provided for anything harmful or defective caused by any product (or container thereof) sold or supplied by the insured, in connection with his business and happening at any time during the period of insurance.
In addition, all costs and expenses, incurred with the consent of the insurer in defending any legal proceedings for enforcing any claim for compensation, will be payable.
Exclusions
The insurance will not cover
(a) The cost of removing, replacing or repairing defective products or loss of use thereof; (b) Liability for costs in the repair, reconditioning, modification or replacement of any part of any product which is or is alleged to be defective; (c) Costs arising out of the recall of any product or part thereof; (d) Losses arising out of any product which is intended for incorporation into the structure, machinery or control of any aircraft;(e) Liabilities arising out of deliberate, wilful or intentional non-compliance with any statutory provision;(f) Expenses arising out of pure financial loss such as loss of goodwill, loss of market, etc; (g) Damages arising out of fines, penalties, punitive exemplary damages;(h) Injury and/or damage occurring prior to the retroactive date shown in the schedule to the policy;(i) Liabilities arising out of deliberate, conscious or intentional disregard of the insured's technical or administrative management of the need to take all reasonable steps to prevent claims;(j) Injury to any person under a contract of employment or apprenticeship with the insured where such injury arises out of the execution of such contract;(k) Damages arising out of contractual liability which would not have existed in the absence of the specific contract;(l) Losses arising out of any product guarantee;(m) Liabilities arising out of claims for failure of the goods or products to fulfil the purpose for which they were intended;(n) War perils;and (o) Nuclear exclusions.
Coverage can be tailor-made
Thursday, June 4, 2009
new ISO Standard proposed on PRODUCT RECALL
First step for ISO standard on recall of unsafe products
2009-05-29
The first meeting of the ISO project committee that will develop an International Standard providing a code of good practice for establishing, implementing and managing efficient, flexible and responsive consumer product recall programmes including corrective actions, took place in May 2009, in Kuala Lumpur, Malaysia.
The first meeting of ISO/PC 240, Product recall, was held in Kuala Lumpur, Malaysia, in May 2009.ISO/PC 240, Product recall, decided on a publication target of 2012 for the new standard (ISO 10393). ISO/PC 240 also resolved to harmonize efforts with other ISO committees developing standards for consumer product safety (ISO/PC 243), anti-counterfeiting (ISO/PC 246) and combatting fraud (ISO/TC 247).
The committee extended a call for interested parties wishing to participate (through the ISO member of their respective country). Currently, about 12 countries participate in ISO/PC 240, and an additional four have observer status. Among its members, Canada, Japan, Malaysia, Republic of Korea and South Africa were present at the first meeting.
ISO/PC 240, Product recall was established following an initiative of ISO/COPOLCO, the ISO Committee on consumer policy, which noted that ineffective product recalls of damaged or unsafe products have resulted in millions of people being injured – sometimes fatally – or becoming ill.
“A market-oriented International Standard on product recall will help to protect consumers and users from fatalities, injuries and financial loss caused by flawed products, but it will also help businesses to save time and money and reduce related legal risks” said the Canadian representative, Mr. Doug Geralde, Director of Corporate Audits and Investigations, Canadian Standards Association.
“This standard is particularly relevant in today’s market context where products routinely cross borders, but uneven and inconsistent approaches in policies and procedures pose significant challenges for global recalls,” Mr. Geralde added.
The International Standard will help organizations to plan and execute timely and cost effective product recalls following design flaws, manufacturing defects, or inadequate warning labels or instructions – whether the products are still in the manufacturer’s or distributor’s inventory or retail shelves or in the hands of consumers. It will also provide guidance on corrective actions, including repair, placement, re-purchase and public notice, helping organizations to minimize legal risks, and contributing to customer satisfaction and loyalty.
The work of ISO/PC 240 will apply to consumer products, including electrical and gas household appliances. The projected standard will be useful for manufacturers, retailers, importers, testing organizations, providers of third party recall services, legal firms, government regulators and consumers/safety organizations.
The Kuala Lumpur meeting was hosted by the Department of Standards Malaysia (DSM), ISO member for the country, who provides the secretariat of the committee.ISO/PC 240’s next meeting will be held in November 2009.
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Product Liability Insurance
Wednesday, June 3, 2009
Product Recall - the proposed ISO Standard
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PRODUCT RECALL - How to
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