Large or small, every life science or medical technology company will eventually have to deal with a products liability claim or event. A lack of adequate planning for such an occurrence can result in damage to the brand, loss of consumer confidence, harm to the business and trigger potential regulatory consequences as well as result in possible business or tort claims. Two ways a company can seek to avoid these issues at the outset and mitigate the disruption such situations can cause is to have a product safety policy and product safety group in place. This article will briefly discuss considerations in putting together product safety policies and establishing a product safety group.
Does Your Company Have a Plan?
The presence of a product safety policy and committee can be a strong indicator that the company has a culture that encourages safe and healthy behavior in its employees and by extension, can result in reduced products liability risk. Therefore, consider the following:
Does your company have a product safety policy?
Is there an operational committee or group to address product safety and liability?
Is there an individual responsible for coordinating product safety activity?
The Product Safety Policy
Product manufacturers that have corporate product safety procedures, processes and training are more likely to have a corporate culture of safety. By extension, companies with such policies decrease the chance of products liability risks by avoiding or mitigating products liability claims. Such policies and committees require strong support from top management.
In crafting a policy, consider that useful policies are fashioned by sound corporate values, legal and regulatory requirements, conventional societal norms and industry standards. They also take into account the company’s resources and corporate structure. Safety policies should set forth quantifiable and attainable goals. They should also empower employees to raise product safety and quality issues. Lastly, a policy may also explain the safety related responsibilities of each company unit involved with safety, including but not limited to Legal, Management, Engineering, Quality Assurance, and Risk Management. Once the policy is created, distribute it widely. Include it in company publications, manuals, handbooks, training manuals and programs.
The Product Safety Team
In addition to a corporate safety policy, a company may wish to form a cross functional team of the appropriate legal and operational leaders. In doing so, top management should determine:
Who will be on the committee;
What authority the committee will have; and
A procedure defining how the committee will operate.
Additionally, in compiling the group, management may consider:
Whether the committee will need a budget?
How many members will the committee have and which departments will be represented? In general, committees with 5 to 8 members work best.
How often will the committee meet and for how long? Will it meet regularly, i.e. monthly for one hour in addition to when emergency meetings are needed in the event of an accident or injury.
Who will be the committee chairperson?
How long will each employee serve on the committee? This may depend on employee turn-over. Establish a rotation schedule so that only one or two members will be replaced at any given time. Also, consider whether employees will be rewarded or recognized for serving on the safety committee? If so, regardless of the manifestation, this recognition should come directly from the owner or CEO of the company.
What authority will the committee have to make changes? If top management approval is needed, what process will the committee have to go through?
When putting together the product safety team, bear in mind that this cross departmental group should create criteria, procedures, enforcement mechanisms and best practices to support the product safety policy. The product safety team may also, to the extent possible, engage in retrospective analyses of prior product events in order to take advantage of previous situations in formulating future policies. The group should also consider establishing guidelines for labeling issues such as warnings and advertising. Lastly, if established, consider whether the committee will also be involved in regulatory reporting, particularly related to safety.
Defined Roles, Duties and Responsibilities
As noted, effective product safety teams are cross functional and usually include representatives from: Compliance, Engineering, Legal, Operations, Risk Management, Sales & Marketing and Service. Duties of the committee could include the creation of a document retention policy and creation of safety procedures. Responsibilities could also include assessing product issues in order to determine if field corrective actions, recalls of products, or issuance of safety notifications are necessary. Likewise, duties could also include deciding whether regulatory agencies need to be advised of any issues or circumstances concerning the company’s product or facility. Committee tasks could also involve creation of guidelines for sales, promotional and advertising materials. Additionally, the team can undertake design or performance standard reviews to reduce product risk, as well as institute internal guidance on product hazard recognition and quantification.
Moreover, the group’s responsibilities could include fashioning guidelines for warnings, labels, instructions for use, as well as generating criteria for warranties (contractual and product oriented), disclaimers and other limitations of liability contained in contracts, terms & conditions and product materials or literature. Lastly, the team could administer company audits looking at manufacturing policies and warranty claims. Having these type of audits could inspire and impose ongoing compliance with the company’s product safety rules and policies, facilitate an understanding of the company’s products liability risks and potentially identify as well as stop product issues from becoming defect claims.
Once the team is built and responsibilities defined, a clearly defined decision-making hierarchy is necessary. Each group member should understand his or her role, and the hierarchy should establish who is responsible for making the final decision (Product Safety Manager). Effective safety committees are led by managers that are capable and have the backing of the company’s management. The manager’s efficacy is likewise enhanced when he or she reports directly to the executive management, and business units are accountable from a safety perspective to the manager.
Implementing a safety policy and building a corresponding team around the manifest objective of product safety can facilitate prevention of product safety issues. The development of a safety committee enhances the corporate culture surrounding this idea, reinforces the business's interest in producing safe and effective products, educates employees and managers, and promotes the exchange of ideas as well as cooperation and coordination between departments. As such, developing a corporate product safety program can aid a company in reducing its products liability risk and exposure.
The above is posted with the permission of Medmarc Litigation 360.