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Spangenberg Shibley & Liber LLP | Sep 27, 2017

Some Companies Will Do Anything to Avoid a Product Recall - Here's Why

Categories: Product Liability

Product manufacturers have a legal obligation to ensure their products do not pose unreasonable risks to consumers who use them. This means they must take steps in ensuring goods are appropriately designed, properly manufactured, and adequately marketed and labeled to the public. Should there be flaws in any phase of a product’s design, manufacturing, or marketing, companies can be held liable when those defects cause injuries or deaths.

As we see on a nearly daily basis in the United States, consumer products, auto parts, and medications are constantly recalled from the market. Sometimes, these recalls are voluntarily issued over potential hazards that could create big problems for manufacturers, and other times they come in response to dangers that have already caused harm and/or as a result of government mandates.

Whatever the case may be, product recalls have the potential to negatively impact companies in big ways, and in some cases wipe them out entirely. This being the case, some manufacturers and companies will do anything to avoid a recall – even if it comes at the expense of public safety. There are a few simple reasons behind this mentality:

  • Bad publicity – Product recalls are bad publicity, and they associate a businesses’ brand with issues and hazards that can diminish the public’s trust in their company. Even when recalling a product is in the best interest of consumer safety (because it alerts the public to potential dangers and addresses known hazards that can cause injuries or death), companies may be so afraid of having their name associated with a negative issue that they continue to avoid recalls. While recalls are bad for brands, manufacturers have a legal obligation to address hazards they knew or should have known about. Failing to do so is an act of negligence that endangers consumers.
  • Repair and replacement costs – When a company recalls a product, it becomes responsible for the costs associated with addressing defects and consumers, per consumer protection laws. This typically means compensating consumers for their inconvenience through free repairs, replacement parts, providing a new product, or issuing credit or cash refunds. Depending on the size of the recall and the size of the company, absorbing these costs may have a severe financial impact that some smaller businesses may not be able to withstand. The fear of exorbitant costs associated with recalls, repairs, and replacements may prompt companies to avoid them entirely, and ultimately avoid addressing the underlying hazard.
  • Other financial losses – Aside from expenses associated with repairing or replacing recalled products, companies can sustain further financial losses in the form of lost sales (due to bad publicity and a degraded brand), and in some cases penalties or government sanctions. While product manufacturers also face financial losses associated with lawsuits filed by consumers who were harmed by their products, they may choose to forgo a recall if their projected figures show that the expenses associated with a recall exceed those that could accompany consumer lawsuits, if any were to be filed. For some companies, recalls and their potential consequences are matters of money, not safety.

Manufacturers and other companies that made goods publicly available are businesses first and foremost. Their concerns tend to revolve around their bottom line, which often leads to a prioritization of profits over people. Fortunately, there are product liability and consumer laws in place that protect the rights of consumers and enable them to take action against companies that fail to make safety a priority and fail to uphold their legal duty.

Our Cleveland-based personal injury lawyers at Spangenberg Shibley & Liber LLP have earned national recognition for our work protecting the rights of victims and families injured by all types of defective consumer products, including unsafe medications, medical devices, and auto parts. Over the years, we have leveraged our extensive experience and the talent of our award-winning attorneys to hold manufacturers liable for serious injuries and deaths across Ohio and the United States. This record of success in product liability law has been a driving force behind our firm’s recover of more than $1 billion in compensation for our clients.

For more information about product recalls, defective products, and your rights, contact our firm for a FREE consultation.