Pre Settlement Funding on Product Liability Litigation
Product Liability Lawsuit Funding
Defective, faulty and malfunctioning products are responsible for millions of injuries throughout the United States each year. When an individual files a product liability case they are attempting to hold the manufacturer, wholesaler or retailer responsible for the injury. Product liability cases are often handled as class action lawsuits.
Product liability refers to the branch of tort law that holds designers, manufacturers, and sellers liable for the harm suffered by buyers and users of their defective products. A “product” can be almost anything, from an aeronautical chart to a prescription drug, medical device or a pack of cigarettes.
“Defects” include flaws in the way a product is designed, manufactured, or marketed. Typical causes of action in products liability include strict liability, breach of warranty, negligence, manufacturing and design defects, and breach of the duty to warn. Most of the time, products liability is considered a strict liability offense. This means that the plaintiff only has to prove that there is a defect in the product. Once this plaintiff has made this showing, the manufacturer or supplier causing the damages is considered to be 100% responsible, regardless of any degree of carefulness on their part or any lack of care by the consumer.
The statute of limitation in a products liability case typically begins on the date the injury occurred. Some states, however, have a discovery exception that prevents the statute of limitations from beginning to run until the plaintiff has had a reasonable opportunity to discover the defect. This is an important protection because, in many cases, the plaintiff will not discover the defect until months or even years later.
Product liability is an area of law where manufacturers, retailers, suppliers, distributors and others who create, produce or sell products to the public are held responsible for the injuries those products end up causing.
Defective and/or dangerous products have been the cause of thousands of injuries in the United States each year. The product liability law is the governing principle that determines culpability for defective or dangerous products. The product liability law is unlike of ordinary injury law. Product liability laws are intended to give an easier legal and compensation process for injured parties to recover from the damages that were made.
In product liability, manufacturers or sellers are held liable for making defective products available for the market or for consumers to purchase. Culpability for defective products that cause injury is put on all those involved in the distribution chain (from the designer to the manufacturer to the distributor to the seller). Generally, the law requires that the product meets the expectations of a reasonable consumer. Obviously, defective products do not meet these expectations.
Because there is no federal law for product liability, claims of this nature are based on state laws and can be brought under doctrines of negligence, breach of warranty, or strict liability with various types of defects such as design defects, manufacturing defects, and/or marketing defects. Commercial statutes in each state which are modeled after the Uniform Commercial Code will contain warranty regulations regarding product liability.
Plaintiffs who file suits under product liability claims are eligible to get both compensatory and punitive damages. Compensatory damages typically include medical expenses of past and future, lost past and future wages, and even property damages if the case calls for it. It is important for parties to note that while product liability is intended to protect consumers, it also has regulations and stipulations that protect the parties that are typically defendants.
Product liability allegations can only be claimed if there is a defect, causation, injury, and duty. Consumers who have retained injuries from a defect in a product must also first prove that the product was used as intended and yet still suffered injuries due to the defect that made the product dangerous.
Product Liability Litigation
Product liability lawsuits aim to prove that injuries were sustained were due to the defective products and that the very defect made the product unreasonably dangerous for consumers. When a consumer uses the product as intended and still obtains harm or injury to the consumer, the product may be considered defective. Harmed or injured parties may then opt to file a lawsuit under product liability when these circumstances arise.
The most common case types of product liability include dangerous furniture, broken chair accidents, appliance hazards, food contamination, beauty and personal care product injuries, defective car parts and accessories, footwear injuries, malfunctioning and defective power tools, dangerous toys, dangerous gym equipment and dangerous drug and medical device lawsuits.
In cases of dangerous products due to the design, plaintiffs would have to prove in the lawsuit that the product had inadequate warnings regarding its dangerous disposition. These naturally dangerous products include knives, explosives, chemicals, chainsaws, and the like. Consumers are still responsible for using intrinsically hazardous products in reasonable ways. Parties can file for product liability lawsuits for injuries sustained as long as the party indeed used the product as it was intended and the product malfunctioned in some way.
Product liability lawsuits are generally considered as strict liability offenses. Strict liability disregards the extent of care that the manufacturer or distributor exercises as long as the defect in the product produces harm onto a consumer and makes the defendant liable for the damages incurred on the plaintiff.
Plaintiffs can be entitled to punitive damages in the case or egregious conduct or behavior on the part of the defendant. Plaintiffs can claim for compensatory damages which include medical expenses, lost past and future wages, and property damages, among many others. Compensatory damages will be dependent on the circumstances of each case.
The Elements of Liability
Product liability laws are intended to protect consumers who were injured through the use of various products. This law puts liability on manufacturers, sellers or distributors of the deemed defective product for making the unsafe product available to the consumer when used as intended.
Products are considered defective when the product does not work as it is expected to be and jeopardizes the used to unexpected dangers. The three defective product types are manufacturing defects, design defects, and failure to warn or simply put, marketing defects.
Product liability can be categorized into three kinds of lawsuits such as negligence, strict liability and breach of warranty. While these three forms don’t differ that much between states, the differing factors are important to understand.
Common elements of state laws include:
Defect – proof that the product was defective
Causation – the plaintiff was hurt by and because of the defects in the product
Injury – the plaintiff obtained actual injuries because of the defect in the product
Duty – the seller or manufacturer owed the consumer a duty to make and/or sell a safe product
Legal Theories For Successful Claim
There are numerous legal theories that can be used as basis for a product liability claim, such as (1) defective design, (2) manufacturing defect, (3) defective warning, (4) breach of warranty, (5) strict liability, and (6) negligence.
Design defects are basically intrinsic flaws or errors in a product. More often than note, these flaws were built into the product during the manufacturing process. However, the flaws can also arise during design modifications.
Manufacturing defects can happen even if the design was not erroneous. While the design may be flawless, products can still be defective after it is manufactured. This is pretty basic in factories as machines or even human error can still cause certain products to be faulty.
Warnings can also be defective in the sense that a manufacturer fails to sufficiently warn regarding the inherent dangers associated with normal or intended use of the product. This is also known as failure to warn, and can also be classified as a marketing defect.
Breach of Warranty
Breach of warranty occurs when a product fails to accommodate to an express warranty. Manufacturers can then be culpable for injuries sustained by a consumer by the very failure to conform. Moreover, if products have no expressed statement, a breach of implied warranty may also occur when the product is not suitable for ordinary purposes of product use.
Strict liability can be used as grounds for product liability cases in such a way that manufacturer can be held liable for selling defective and unreasonably dangerous products when a product is more hazardous than an ordinary customer would deem it to be.
Negligence in product liability cases are pretty much the same for other claims of negligence. In addition to the four elements of duty, defect, causation and injury, plaintiffs would need to prove that the manufacturer or seller breached its duty to the consumer by being aware or being responsible in such a way that they should have been aware of the defects based on known or available information.
Res Ipsa Loquitur
It is important to note Res Ipsa Loquitur cases as well. By the name it holds, cases such as these, plaintiffs need not prove the existence of the product defect. Because Res Ipsa Loquitur is Latin for “the thing speaks for itself”, it basically states that the defect is very obvious that proving such defect would not be required legally.
Under this doctrine, when a reasonable person can look at the product and can clearly see the defect without any other kind of proof, then strict liability will automatically apply. In cases of allegations under Res Ipsa Loquitur, plaintiffs must show that the defect is indeed obvious and that the plaintiff was injured by the product.
Largest Product Liability Cases in the US
Product liability cases are relatively new in the world of law. The consumer-driven law is intended to protect consumers from faults on the part of the manufacturer or seller. Some of the biggest lawsuits in United States History include General Motors, Philip Morris, Dow Corning and Owens Corning with lawsuits amounting up to billions.
General Motors – Ignition switches
General Motors is facing product liability lawsuits when it was discovered in February 2014 that a significant number of its automobile models were manufactured with faulty ignition switches. The switches had the capability to shut off the engine during driving, disable power steering and brakes, and even prevent airbags from deploying.
According to GM, these faulty ignition switches have been linked to at least 13 deaths and 31 car accidents. Since then, the company recalled over 26 million of its automobiles for various reasons over the past year. A $400 million uncapped fund was set up to compensate for the death and injuries sustained by the defective vehicles.
Philip Morris – Failure to warn
In 2002, Philip Morris (now Altria Group, Inc.) was sued by a woman who had lung cancer and claimed that smoking cigarettes was the cause of her illness. In addition, the woman also said that the tobacco company’s failure to warn regarding the risks of smoking was the cause of her tobacco addition. The company was ordered to pay for punitive damages in the amount of $28 billion and the woman was paid $850,000 for compensatory damages.
Nine years later, after successfully appealing the case, Philip Morris managed to have the amount of punitive damages reduced to a mere $28 million; a staggering 1/1000th of the original punishment amount and the company is still going strong – thanks to a warning label that now informs people that cigarettes are hazardous to your health.
Merck & Co. – V
Merck & Co. holds the dubious and sinister distinction among pharmaceutical giants for the largest, most reprehensible act of unbridled corporate greed and irresponsibility in the history of American pharmaceuticals by knowingly placing profits before people.
Merck possessed clear evidence from its own internal studies – prior to requesting or receiving FDA approval to market Vioxx – that it increased the risk of heart attack by nearly 700%. 700%! Instead of withdrawing or reformulating Vioxx, Merck rushed it to market anyway and reaped tens of billions of dollars in profit for six years. Merck finally withdrew Vioxx in 2004 amid a tsunami of lawsuits, but by then the catastrophic damage had already been done.
Depending on the source, estimates say about 55,000 people died and hundreds of thousands more suffered life-changing injuries.
After the dust settled, Merck settled for $4.85 billion (a mere fraction of the profits it earned from Vioxx sales), considered it “the cost of doing business” and is still going strong.
General Motors – Damaging chemicals
Clearly, General Motors is no stranger to product liability lawsuits. The company received a product liability suit in March 2008 with allegations of the use of a damaging chemical in its Dex-Cool coolant. IT was said that this chemical caused leaks and engine damage. On behalf of 35 million GM consumers, a class action lawsuit was filed for about $20 billion. Unfortunately, consumers who filed the suit ended up receiving individual payments of only$400-$800.
Dow Corning – Silicone breast implants
It was in 1998 when Dow Corning (a joint venture of The Dow Chemical Co. and Corning Inc.) was able to reach a settlement in a class action lawsuit worth $4.25 billion. The settlement amount was $2 billion. The class action lawsuit was filed by consumers who alleged that their silicone breast implants were causing injury, rupturing, bodily damage, scleroderma and death.
General Motors – Automobile parts
It was in August 1999 when the company faced a lawsuit of personal injury and product liability claims. In this lawsuit, claims of a 1979 Chevrolet Malibu faulty gas tank caused gas tank explosions that had killed six individuals. Plaintiffs sued $4.9 billion in punitive damages.
Owens Corning – Asbestos
It was in December of 1998 when Owens Corning Corp settled to pay $1.2 billion to asbestos related product liability lawsuits. The lawsuits claimed that the asbestos materials had caused mesothelioma cancer and death. A reported 176,000 individuals were involved in the product liability case.
Are cell phones the next ‘Asbestos’ bombshell? Many in the insurance industry are starting to think so:
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