A European company that sells its products in the United States is subject to American law on product liability if it is regarded as the “manufacturer”. If a product consists of several components, each individual supplier is regarded as a manufacturer. The liability of the manufacturer exists regardless of how the product came into the country or who sold it. The economic effects of a loss due to product liability are serious. The European company must not only defend itself before a jury in the United States, but should also expect significantly higher damages than in Europe. Protection from product liability, with the aim of preventing lawsuits, is therefore of paramount importance.
The European company has a number of options available to reduce the probability of a product liability case by up to 90%. Interestingly enough, the focus is not so much on the technical side, which is relevant for civil liability. The focus of preventive measures for product liability is instead in the realm of so-called “Failure to Warn”, i.e., the user is not made sufficiently aware how exactly to use the product. Almost all European manuals are too technical and too short for the U.S., as if they were written for Martin Winterkorn and not for the normal user, who is really the target here. Operating and maintenance manuals for products, brochures, advertising materials, and websites should therefore be adapted to the current U.S. product liability standards. This is done by including warnings on the product itself and in the documentation, and by using the correct structure and terminology.
Technical standards in the area of product liability are almost always voluntary, i.e., technical adjustments are rarely required for export to the U.S.
- Product liability is based on the laws of the 50 U.S. states
- The Americans use case law; one must therefore read the cases on product liability to see where the focus is
- Protection against product liability is therefore a task for lawyers; leaving the editing to engineering firms or TÜV is therefore not recommended
- You have to survey all of the liability cases to find out what to look for
- The company has to contribute its own experience
- The final documentation for product liability is written in English and Spanish
- Product liability is insurable
The GATA works with one of the lead law firms in the United States in this area, which at your request will adapt your documentation.
The above-mentioned technical standards are only partly applicable and relevant in the nuclear, defence, and electronics areas.
Not sure if you have taken all necessary precautions as a manufacturer to protect yourself from product liability?
Then attending one of our Executive Management Meetings that covers this topic will help. Or you can attend our half-hour webinar “Product Liability”. You can book here.
Consultants and Service Providers
Entry into the U.S. Market
Subject-Specific Individual Questions
Company Formation – Yes or No?
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Protection from Contractual Liability
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Public Contracts and Procurement Procedures