Product safety: don't let a crisis turn into a disaster

Distributors also have duties under the Regulations not to sell or supply products that they know, or ought to presume, are unsafe, and to co-operate in product recalls and in passing on information to consumers.

In addition, certain products have specific rules for recall, for example, medical devices. Voluntary industry guidelines exist in other sectors, such as those for motor vehicles.

Once it is clear there has been a safety problem and the previously laid-down plan is being acted on, it is often the company's response to public and consumer relations issues that will be remembered long after the initial problem has been solved.

A company should decide quickly what to do, whether to issue a warning, withdraw the product or institute a recall. They must then tell the relevant authority that there has been a problem and inform them what action is being taken.

It should appoint a spokesperson for the incident who is fully briefed on all known facts, because it is vital that the company never appears uncertain or divided in its approach to the problem. Everyone else in the organisation should be told that they are not authorised to make statements regarding the product and a telephone advice line put in place to answer media enquiries.

When facing the media difficult questions cannot go unanswered, so the company should work out its responses to those questions. If a question cannot be answered, it should explain why that is the case and what the company is doing to obtain the information.

Incriminating statements and admissions of liability that could be used against the company in any future civil or criminal action should be avoided, as should public speculations about the cause of a potential defect. This is particularly important if such speculation blames a third-party. Such allegations could ultimately lead to embarrassing public disagreements, a breakdown in business relationships, and potentially a claim for damages.

The company should finally check its insurance policy and ensure that notification requirements are complied with.

A product safety issue can be a huge problem, but it need not be a calamity. It can also prove extremely expensive, and poor crisis management can increase that cost considerable.

Cadbury was fined £1 million and ordered to pay the prosecution's costs of £152,000. The fine is unprecedented in product safety cases, but is representative of a hardening line by the courts for "regulatory" breaches. The court made it clear that they considered Cadbury to have been seriously negligent. Cadbury were also criticised for the failure to immediately notify the authorities that they had reason to believe the chocolate was injurious to health.

Planning, preparation and full knowledge of the law is a company's best chance of preventing a safety crisis becoming a disaster.

At Pinsent Masons, we have extensive experience in advising clients over the life of a product, from IP protection at the product development stage, through regulatory compliance to advertising and sales as well as product liability. If you require further information, please contact Tom Stocker.

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