Leading Out Loud: Product Liability

[Editor's Note: The following content is sponsored by Rolfes Henry Co., LPA; Wilson Elser Moskowitz Edelman & Dicker, LLP; and U.S. Forensic.] 

What technologies may be future targets for product liability claims or litigation? Can insurers stay ahead of the curve? And when it comes to litigation, how should insurers handle aggressively minded policyholders? See what three experts have to say about it all.

What technologies are you and your clients watching or anticipating may be targets for product liability claims or litigation in the future?

Rebecca Mansell, Rolfes Henry: When considering potential product liability claims that will be targeted for litigation in the future, self-automation cars are ripe for an explosive amount of litigation. In the next 10 years, there will be self-automation cars on all roads in the United States. Near our office in Jackson, Mississippi, the Nissan plant is racing to develop self-automation vehicles, and it is not alone. Other automobile manufacturers such as BMW Group, Tesla, Inc., Ford Motor Company, General Motors Company, Daimler AG, Toyota Motor Corporation, Volkswagen AG, Volvo Group, and Waymo, LLC, are all competing to produce self-automation vehicles capable of performing all driving functions in all circumstances.

Eugene Lopez-Oña, U.S. Forensic: It will be interesting to see how the design possibilities presented by additive manufacturing are incorporated into mass production applications. The limitations of current processes require a balance between design and mechanical performance; however, new needs will be filled by additive manufacturing processes and will present opportunities for product liability claims.

Sensor technology in automotive applications presents the opportunity for better data and, as a result, better forensic analyses. The expansion of sensor technology and applications necessarily goes hand in hand with the increased capabilities of self-driving and smart cars.  It will be interesting to see how the industry is affected as automobiles become able to not only sense more parameters about their environment, but also identify each other on the road.  I’m sure there will be plenty of questions (and answers) as to how their influence affects how incidents play out, good or bad.

Daniel E. Tranen, Wilson Elser LLP: I have been beating the drum regarding anticipated issues with 3D printed medical technologies for a number of years now, especially for point of service “manufacturers” and users of devices. This already is a multibillion-dollar industry and there is no clear FDA regulation of such devices, unless they are sold (as opposed to being used) by these “manufacturers,” and therefore must be cleared by the FDA. Moreover, there are arguments that a negligence standard, rather than a strict liability standard, ought to control disputes arising out of alleged defects when a 3D printed medical device, printed and used by a medical provider, causes an injury. This technology is the future of manufacturing, and the law in this area will need to be developed, and possibly reconsidered, over the next 10–20 years.

How do you advise your clients to stay ahead of the curve regarding insurance policies issued and liability issues?

Rebecca Mansell, Rolfes Henry: When the time comes, and it is approaching very quickly, our advice to our clients will be that they need to change their traditional thinking from defending standard automobile liability coverage claims to looking at the vehicle manufacturer for liability considerations, not the “driver.”  A product liability action against the vehicle’s manufacturer can be a viable course of action in certain circumstances for insurance companies when a self-automation vehicle is involved in a claim.  Depending on what level of automation the vehicle was engaged in at the time of the accident, we envision hybrid approaches to handling an automobile claim.  Liability could result in a “split” between the driver and the manufacturer of the vehicle, and insurance companies must have a Firm that will be agile enough to pursue various options for the claim at the same time. 

Additionally, insurers will need information regarding vehicles’ self-automation capacity at the time of policy issuance.  The information regarding the level of driving automation with which the vehicle is equipped will influence insurance rates and, eventually, the defenses available to the insurer following an incident. 

Ultimately, the controlling question with liability issues will be WHAT was in control at the time of the accident.  Was it the driver?  Was it the vehicle?  Or was it a combination of both driver and vehicle? The distinction of what or who was driving the vehicle will be at the crux of any defense of an insurance claim involving a self-automation vehicle.  The levels of driving automation that will be available on vehicles in the future are shown in the chart below. As illustrated, the level of driving automation distinguishes the liability for the driver and for the vehicle’s manufacturer.

How can forensic engineering expertise be incorporated into product liability defenses?

Eugene Lopez-Oña, U.S. Forensic: Independent research, testing, and review of design documents can be used to validate a state-of-the-art defense, the key issues being: “Was something overlooked in the design process?” and “Could testing or analysis have been done at the design level that could have revealed the issue(s) before the claim occurred?” Third party objectivity is useful in communicating decisions made at design stages to non-technical finders of fact.

In the product liability cases that I have participated in; it is standard procedure to point out any issues or potential issues with the instructions provided by a manufacturer or vendor.  Where possible, measurable issues are pointed out, but legal conclusions are reserved for the courts to decide.  I avoid using language that could be construed as a legal interpretation.

Relevant modifications made by a user should always be considered in a forensic investigation. Often, safety features are removed or by-passed and they could have prevented a potential incident from occurring if their intent were not undermined. The appropriate Forensic Engineer should be able to review design documentation and identify when a safety feature has been undermined.

Should insurers try more cases to verdict, and how do you handle an aggressively minded policyholder?

Daniel E. Tranen, Wilson Elser LLP: Thinking in terms of mass tort product cases, if the product is recalled or no longer on the market, then it is understandable that these will settle, since there is nothing to defend outside of the litigation goals. When the product is still on the market and the policyholder is standing behind it 100%, settling cases—unless for true nuisance value—is tricky, as almost every product can lead to an injury if misused. I am more likely to agree with the policyholder that these are cases that should be tried.

In addition, we constantly look for bad facts in the client’s product story throughout the litigation, especially early on, so that we can get ahead of opposing counsel and push the client toward a settlement if those bad facts are likely to dominate the litigation. To that end, we prepare clients throughout the life of any lawsuit for the possibility that the case will settle (as most do).

Rebecca Mansell, Rolfes Henry: Absolutely insurers should try more cases [related to self-automation vehicles] to verdict. Demonstrating a willingness to defend such actions could serve two purposes. First, potential insureds may look favorably upon companies promising to defend their interests vigorously, thereby potentially allowing the insurers to increase their market share based on that aggressive stance. Second, taking an affirmative stance against the vehicles’ manufacturers at the outset of this industry development should put insurers ahead of the game in terms of how such cases are advanced through litigation, with everything from company discovery to dispositive motion practice being elements for consideration. The question of who and what is liable with self-automation vehicles requires insurers to utilize counsel prepared to think outside of the box and aggressively defend cases involving self-automation vehicles. 

Rebecca Mansell, Esq., PhD, is managing partner for the Mississippi offices of Rolfes Henry Co., LPA. rmansell@rolfeshenry.com  

Daniel E. Tranen is partner at Wilson Elser Moskowitz Edelman & Dicker, LLP. daniel.tranen@wilsonelser.com 

Eugene Lopez-Oña is senior mechanical engineer at U.S. Forensic. eugene.lopez-ona@usforensic.com