Mitigating Litigation Risk of Inherently Dangerous Products

This articles addresses the litigation threat to companies whose products are inherently dangerous. By way of example, the authors consider the case of Blitz USA, a gasoline container manufacturer which announced that it would cease operations last June. Blitz attributed its demise to the cost of product liability lawsuits brought by plaintiffs alleging personal injury associated with the use of gasoline containers. These injuries typically resulted from practices expressly warned against in the safety guidelines imprinted outside of every container.

The authors suggest three things a company might consider as a defense against this kind of litigation:

First, restrict access. The perceived benefit would have to be weighed against the logistics and the impact on sale. Limiting consumer access and requiring informed consent reduces the size of the user population and can also help weed out lazy or incompetent users.

Second, require informed consent. Products would need to be accompanied by warnings disclosing risks, with the additional step of requiring an acknowledgment that the warnings have been received. While not forcing people to use their common sense, this does make them acknowledge that they have been advised of the proper way to use the product.

Third, solicit an advisory opinion from the regulator. Depending on the industry and the circumstances, seeking an advisory opinion may be useful, not to prevent litigation, but rather to aid the company in defending itself and dispensing with a claim as quickly and cost-effectively as possible.