Rambling Through Reykjavik – A Discussion on Products Liability Law
I will never forget when I took my first breath of Icelandic air. I landed in Kaflavik airport early one morning on a very cold day in March. When I exited the terminal in route to my rental car I was hit with a freezing burst of artic air. It cut through my coat like it was hot butter and I was wondering what in the world I had gotten myself into. Things soon changed as the weather warmed and I made my way into the city of Reykjavik. It is indeed a fabulous city in a wonderful country. Iceland is full of natural wonders, fabulous restaurants, delightful shops and hospitable people. I enjoyed everything there from the lamb hotdogs local vendors sell on the streets to the soothing mineral waters of the Blue Lagoon. I highly recommend an excursion there to anyone.
In the good ole days before zoom calls, I had the pleasure of giving over 25 in person presentations on various aspects of U.S. law in several cities in Europe. Although I have not given a presentation in Iceland, I did have the opportunity to discuss legal matters with an Icelandic executive whose company was interested in entering the American market. Like many whom I speak to on the issue of forming a U.S. subsidiary, his prime concern was U.S. products liability law. One can speak hours on this subject and my thumbnail presentation on the same takes 45 minutes. Hence, I will attempt to boil the subject down to its bare essence in this short article.
Generally speaking, there are 3 major theories of recovery in products liability cases involving personal injury. They are negligent design, negligent manufacture and a negligent failure to warn. Each theory has many important factors and tests used to determine if a claim can be made under these theories. However, from a manufacturer’s perspective the big picture view in this field is that for the vast majority of products, there is little risk that a viable claim can be made against them. Automobiles, pharmaceutical drugs and machinery that has the capacity to maim or kill people make up the lion’s share of products liability claims. Indeed, in my 30 years of legal practice I have only had one client who has had a products liability claim made against them. Products liability claims cost a mint for a plaintiff’s lawyer to pursue. Hence law firms are very judicious in selecting the cases they agree to take on. The process often involves several years of litigation and the costs advanced can easily run in the six- figure range. Thus, unless there is a death or life changing injury, most law firms will not take such cases on. This is not to say that one should ignore the issue as it is an important one. Manufacturers certainly need to obtain sufficient products liability insurance and employ best practices in their manufacturing processes. But in making business decisions, an educated risk assessment leads many to conclude that the relative risk is small for the products they manufacture. Exaggerated headlines, fear mongering legal articles and much disinformation have led many to believe that this risk is higher than it actually is for their particular products. Hence the Icelandic executive shied away from entering the American market. Sad, because he had a good product with a very low risk of a products liability claim.
Less common are products liability claims for property damage as oftentimes other legal theories can be employed in such scenarios. There is no shortage of manufacturers who successfully offer their wares in the huge American market. If they can do it, perhaps you can too. This is but the tip of the iceberg of information on the subject. However, suffice it to say that manufacturers should consult with a lawyer and insurance broker prior to selling their offerings in the American market. When you need help with legal matters, call the one you can trust. Contact Chris today … click here.