Many people have heard about the lawsuit in which a consumer won a substantial verdict against McDonalds over a burn from a cup of hot coffee.  Last year, General Motors faced claims due to a faulty ignition switch that shut off the engine during driving, disabled power steering and power brakes, and even prevented airbags from inflating.  Toyota faced similar problems in the past with claims of sudden acceleration in certain car models.  Tobacco companies like Philip Morris faced lawsuits over cigarettes and many medical device companies have faced serious claims that their products harmed the very people they had aimed to help.  Products liability cases affecting consumers tend to make headlines.  Defending companies often take a hit to their reputation as well as their bottom line.

Our next installment of GSB’s Resource for Doing Business in the U.S. introduces products liability law concepts and explains why negligence or fault may not even matter.  Moreover, it’s not just the manufacturer who is at risk; others in the distribution chain can be sued too.  With judgements frequently in the millions of dollars, foreign investors in the U.S. must think ahead about ways to mitigate the substantial risks that products liability claims can present.  This installment offers a few concrete steps a potentially affected company can take to protect its business and investment.