When you read a headline about a new regulation, FDA recall, or a new lawsuit, your first thought may be: “I’m glad this has nothing to do with my company.” However, getting ahead before something happens is critical to ensuring that your company — and your team — is prepared, should the spotlight turn to you. Do not dismiss developments from another industry as irrelevant. Rather, it is important to look behind the headlines to identify common threads signaling potential dark clouds ahead and to prepare proactively.
Increasingly, molecules and substances, rather than discrete products, are garnering attention in the product liability space. Products that share the underlying chemical composition or another characteristic of a product in the news can become your company’s next product liability litigation. How can you determine whether your product may be next, and what should you do to limit that risk? Here are five steps you can take now.
Preparing for potential product liability claims begins with reviewing your products and assessing litigation risk and exposure. Do your products share a molecule with another product that is drawing negative attention in a different industry? Has your company received complaints about a certain side effect or malfunction? What is the historical magnitude of awards or settlements for similar claims?
To better assess the risk, you will need to track developments, even those outside of your industry. This includes monitoring regulators by routinely tracking recalls and press releases. Doing so will keep your finger on the pulse of what types of substances and devices concern regulators such as the FDA and the EPA. Reviewing these developments with an eye toward products that share characteristics with your own can help you avoid being caught off guard by future actions. You should also monitor what appears to interest plaintiffs’ attorneys. Where there are claims to be brought, plaintiffs’ attorneys will advertise. It is important to monitor these ads and legal actions to see when they focus on a general substance (e.g., molecules alleged to be carcinogenic) or category of products (e.g., a class of medications or consumer products). This can signal where litigation is heading and whether your product may be next.
In the event of litigation, it is key to reduce potential risks ahead of time. For example, there are steps you can take well in advance of any lawsuit to preserve the privilege (and confidentiality) of material related to the product. Once you suspect that a product liability claim could be coming your way, reach out to legal counsel to assess any privilege issues and ensure that, to the extent possible, privilege is preserved.
Identify those within your company who may have experience in dealing with similar issues, whether in the same industry or in a different context. Outside resources can also provide support, especially outside counsel who can draw on their experiences on similar issues or across industries to assess trends and to predict what types of claims are likely coming next.
Keeping in mind these steps, your company will be well positioned to defend against actual claims, governmental action, or the next mass tort. It also can be prudent to undertake a litigation risk assessment that evaluates key factual and scientific issues as well as key legal considerations (e.g., statutes of limitations, lack of legal and medical causation, federal preemption).