Product Liability

Products liability is one of the most important areas in personal injury law. Millions of products are manufactured around the world and then delivered through a chain of distribution until they finally reach the consumer. These products are generally manufactured and distributed by large corporations. Because of the numerous entities involved in the chain of distribution, and the extended path from the manufacturer to the consumer, it becomes easy for big corporations to lose track of their duty of care. Unfortunately, defective products are all too common and absent strong legislation that discourages negligent and even intentional misconduct, it is simply too easy for big corporations to claim that injuries are the fault of the customer, or the supplier, or the manufacturer, or anyone else for that matter. The list of excuses is endless.

Fortunately, in the United States and in California particularly, laws have been enacted that incentivize big corporations to act responsibly. In addition to standard negligence, willful misconduct and fraud-based laws, California holds manufacturers of a product, manufacturers of the parts for that product, the distributors of the product and the brick and mortar stores that eventually sell the product all separately liable under a theory called strict liability. Strict liability essentially holds that all businesses in the chain of distribution from the manufacturer to the store front responsible for any injury caused by a defective product. It doesn’t matter who in the chain of distribution actually was at fault. Every company in the line of distribution is considered automatically at fault for the defective product. This may seem unfair, especially if there’s a mom-and-pop store at the end of the line. However, the concept behind strict liability is that businesses that benefit from the stream of commerce share in the risk. In other words, being subject to strict liability which in turn ensures that injured people are compensated without a lot of finger-pointing becomes the cost of doing business. It is a kind of insurance built into the chain of distribution. All business owners share in spreading the risk, and any good business owner knows that maintaining adequate commercial liability insurance is necessary. Paying insurance premiums that cover the risk of strict liability is a necessary cost of doing business, especially for mom-and-pop stores.

The process can get extraordinarily complicated when there is a defective part incorporated into a product by a manufacturer that is then distributed through multiple middlemen before being finally sold to a retailer. In most cases, each company in this chain may be determined to be what is called “jointly and severally liable”. This means that each company is liable for the full amount of any damages awarded in a personal injury case. If an injured person is awarded a million dollars in damages as a result of their injury, the million dollars is not necessarily divided evenly among the liable companies. If there are five defendants, but four of the defendants are not adequately insured and/or do not have the resources to pay their share of the damages, the one defendant left over is forced to pay the difference or often even the full amount. This is of course extremely important to the consumer. Where one of the companies down the supply chain is bankrupt and doesn’t have insurance, the other companies are forced to make up the difference so that the injured party is fully compensated. In the end, California law favors making the injured consumer whole again. Don’t feel too bad though. Mom and pop can still seek indemnification from the company that actually caused the harm, as can any of the companies in the supply chain. In the end, strict liability effectively acts as an insurance policy for the average consumer leaving the businesses in the supply chain to fight among themselves when it comes to indemnification.

Because billions of products are sold annually around the world, product liability law is an essential part of the capitalist market. It ensures fairness by spreading the risk across companies in the supply chain and makes it impossible for big corporations to try and point the finger at everyone else but themselves.   

So how does it work in the real world?

Say a consumer buys a bicycle (the “product”) at a mom and pop store, and the sprocket (a “part” of the bicycle that holds the chain) was defectively manufactured. Because of the defective part, the chain slips off the sprocket while the consumer was riding the bicycle causing him or her to crash at a relatively high speed. The consumer is paralyzed suffering catastrophic injury. Hopefully this consumer (now the injured person) or his family contacts an experienced personal injury law firm right away. Once an experienced personal injury law firm is on board, the firm takes all the right steps possible to obtain the maximum damages for the injured person. This requires determining who all of the companies in the chain of distribution are, filing a lawsuit, and then aggressively litigating the case against each company in that chain. In this case, let’s include the company that manufactured the sprocket, the big corporation that manufactured the bicycle, the distributor that purchased the bicycle from the manufacturer, and the mom and pop store who purchased the bicycle from the distributor. The experienced personal injury law firm presents the injured person’s case to a jury establishing strict liability against each defendant and obtaining an award for the injured person of 8.5 million dollars. Each company is therefore held jointly and severally liable for 8.5 million dollars. Because Mom and Pop’s insurance is limited to one million dollars per occurrence and distributor is effectively bankrupt, the big corporation manufacturer and the sprocket manufacturer end up having to pay 7.5 million dollars between them, much of which will be covered by insurance.

This may sound like a daunting task. However, at Rad Law Group our experienced San Jose personal injury lawyers have decades of experience fighting big corporations, their insurance companies and their lawyers in products liability cases obtaining the maximum compensation that our clients are entitled to.  Contact the experienced personal injury attorneys at San Jose’s Rad Law Group at (408) 241-5300 in order to protect your rights.  Because of court deadlines and the preservation of important evidence, it is important to act fast.

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