Product Liability: Beyond Loss Control–An Argument for Quality Assurance

Abstract

Companies should be diligent in examining the relationship of product liability claims and effective quality assurance programs. A review of the literature suggests there are many writings about the mechanics of a product liability case, but very little hard evidence to suggest that companies are saving money because of implemented quality initiatives. While liability in this arena is usually borne by an injury that is due to a defect in either design, manufacturing, or marketing materials, suits are generally filed under three broad categories: negligence, breach of warranty, or strict tort liability. Properly implemented quality assurance initiatives will serve a company by tracking all aspects of the operation, from design to packaging, in order to determine where waste and defects are occurring. The courts are looking for this documentation, as well as how negative discoveries are handled in a company's quality management system. Since the courts are looking beyond a simple defect to determine a company's methodology for handling problems, effective quality systems must exist to demonstrate the exercise of due diligence. They also serve as documentation controllers that disallow “smoking guns” (internal or external communiqué) from becoming financial liabilities.