Product Liability & Recall

When products fail, those in the chain of commerce including manufacturers, importers, suppliers and retailers, can suffer many adverse consequences which may comprise of

  • a loss of brand value and reputation;
  •  obligations of mandatory reporting, particularly but not exclusively in the area of consumer goods;
  • compulsory or voluntary product recalls; and
  • litigation from many angles which may include suppliers and those injured or suffering damage as a result of product defects.

As a society we have become increasingly safety conscious and aware of risks in the use of products which has led to greater litigation around product liability, including class actions.  Class actions attract the most attention, however on a day to day basis, single event losses are more common.

W+K’s team has the experience to manage product liability issues to support our clients both strategically and cost effectively, to achieve the right commercial outcome and at the same time minimise any reputational damage.

Our services in this area support both insured and insurer clients.  Our lawyers have more than 20 years experience working in product liability  with experience managing some of Australia and New Zealand’s most complex and hard fought product liability disputes, including extensive class action experience in product liability claims.  Many claims in this area will be defended under specialist forms of insurance policy that have been developed specifically by the industry which will have their own distinctive features.  We combine our in depth knowledge of the insurance industry, the nuances of managing these claims and the policies that provide coverage along with our experience in executing the most effective strategies for the defence of product liability litigation (including product recalls).

Further we also pursue recoveries along the supply chain and advise on contact with regulatory authorities and reporting.  Our experience covers all industry sectors including energy and power, engineering, food, medical devices, consumer goods, manufacturing and transport.

Legalign Global – Multi-national response

Companies operating across international boundaries and jurisdictions are facing great challenges.  Local jurisdictional laws in the area of product regulation, product liability laws, recall laws, procedures, court systems and safety and regulatory environments are problems in Australia and can all give rise to complicated issues.

W+K with its Legalign Global alliance partners, DAC Beachcroft (United Kingdom), Wilson Elser (United States), BLD Bach Langheid Dallmayr (Germany) provide an international solution with a multi-regional team experienced in all aspects of product liability laws and claims management skills.  This means we can manage the expectations of the different work, health & safety, competition and consumer regulatory bodies in regions across Europe, UK, the USA and Australasia.

Recent examples of our work include:

  • W+K has been at the forefront of most recent product liability class actions and has developed expertise in dealing with the particular demands which these actions bring.  The Courts tend to push such actions on quickly and encourage the parties to engage in alternative dispute resolution.  Our class action experience includes:
    – Acufix (over heart pace maker leads),
    – Bonsoy (the importation of milk containing excess levels of iodine)
    – The Bushfire litigation arising out of a supply of electricity in Victoria, New South Wales and Western Australia.
  • Defending the foreign supplier of automated welding equipment and consumables for use in rail track repair work against a product defect claim brought by a mining equipment company.  The plaintiff sought around $2 million in damages due to alleged defects in the equipment.  The proceedings involved multiple causes of action in negligence, contract, breach of consumer laws and misrepresentation.  We resolved the matter for less than 25% of the claim amount and secured a sizeable contribution from our client’s Australian distributor.
  • Acting for the manufacturer of specialty oil products against a $5 million+ claim for damage to a 390MVA/330KV generator transformer used at a power station.  The damage was caused by the supply of non-conforming oil.  The claim involves a complex supply chain, competing contractual terms and issues of jurisdiction and foreign law in conjunction with dual insurance issues
  • Acting for the supplier of expansion joints which were installed in a $2 billion medical facility.  The joints failed causing damage to equipment and business interruption resulting in anticipated claims from a number of parties including the Western Australian Government, the head contractor and owners of sensitive medical equipment.
  • Advising the recall insurer and its insured in respect of the contamination of frozen berries which Australian regulatory authorities linked to an outbreak of Hepatitis A.  The insured imported the berries into Australia from Chinese suppliers and the berries were distributed through an extensive supply chain to consumers via supermarkets across Australia.  The contamination was widely reported in the media and gave rise to the risk of significant reputational damage to our insured client and its customer (a high profile Australian food brand).  Our advice involved quickly obtaining expert advice from a microbiologist and advised on policy cover, loss containment strategies, evaluation of the multi-million dollar loss and recovery prospects / strategies against foreign suppliers.
  • Numerous claims involving consumer items causing loss including air conditioners, whitegoods (fridges, toasters etc.), bicycles, furniture, food and services etc.  In one recent matter we acted for the farm supplying eggs into the retail market which were used by a restaurant and allegedly caused a significant outbreak of salmonella.  The claim was settled prior to litigation through alternative dispute resolution with no contribution by the Underwriters of the farm.