INTRODUCTION Contributed by: Rod Freeman, Cooley LLP
Modern Product Liability – Global Risks and Challenges Product manufacturers are facing an increas - ingly challenging liability and regulatory environ - ment around the world. This has been the trend for some time now, and it shows no signs of letting up. Those challenges have been exacer - bated by the pace and scale of change in legal regimes internationally. The wave of change has been unprecedented, both in terms of its scope, affecting all product sectors, and the volume of change. The main drivers for these changes have been, first, a perceived need on the part of regulators and policymakers to address challenges raised by new technologies, second, the rise of new marketing models based on e-commerce, and third, an outcome of the growing prioritisation of the circular economy. This is what we should consider to be “Modern Product Liability”. The risks, responsibilities and liabilities of companies involved in the manufacture and distribution of products are not what they used to be. They go way beyond what has been traditionally seen as “product liability”, and the regulations that need to be taken into account when designing prod - ucts now go beyond traditional considerations of “product safety”. The laws are more com - plex, covering a wider range of policy areas, and enforcement is being seen on multiple fronts. Over the last few years there has been a dra- matic shift in gears, with these debates and dis - cussions culminating in concrete reforms. Com - panies are starting to feel the pinch – needing to stay on top of upcoming new requirements across multiple jurisdictions (that may be incon - sistent), understand what they mean and imple - ment required changes to products, processes and procedures to comply – often before guid - ance or standards are available. Reforms are also
impacting multiple areas of a business, making it difficult to prioritise and allocate resources, especially with multiple areas of policy now over - lapping. The consequences of non-compliance are also increasing. This gives rise to very practi - cal challenges for all companies and increases product liability and litigation risks stemming from non-compliance with regulatory measures. Governments and regulators are also feel - ing the pinch, with last minute proposals to delay enforcement dates where the mechanics required to implement new laws are not yet in place. There are also increasing calls for simpli - fication to reduce overlapping requirements and burdens, with proposals to amend laws before they have even entered into application. Whilst reforms that give companies more time to com - ply and reduce burdens are often welcomed, the last-minute nature of some of the changes has led to uncertainty and wasted costs for busi - nesses. Companies are beginning to realise, sometimes the hard way, that their existing procedures and practices for managing product liability risks worldwide may not be adequate for confront - ing the challenges that exist now, and that lie ahead. As regulation becomes more complex and changes occur more rapidly, with traditional principles of regulation being overtaken by new approaches, companies are struggling to find practical ways to keep informed of requirements and effectively manage risk. These challenges are particularly acute when considering products currently under development, likely to launch in one or two years, and potentially remaining on the market for several years thereafter. If com - panies cannot anticipate the direction and shape of regulatory change on the horizon now, invest - ments and opportunities could well be lost. There is still no “magic wand” solution to this current
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