Roundtable: Product Liability Defence
The International Who’s Who of Product Liability Defence Lawyers has brought together four of the leading practitioners in the world to discuss key issues facing lawyers today
Participants
Pieter Conradie
Cliffe Dekker Hofmeyr
South Africa
Who’s Who Legal: Have there been any recent regulatory changes in your jurisdiction that have affected your practice? Are any foreseeable in the near future?
Mal Wheeler: Yes. The recent amendments to the Consumer Product Safety Act in the US and the regulatory actions taken pursant to those amendments have required more extensive counselling to companies subject to them – especially regarding reporting requirements. Also, the government’s announced procedures implementing this year the provisions of the Medicare, Medicaid and SCHIP Extension Act of 2007 have imposed substantial new requirements that must be met in connection with any settlement by a plaintiff who has received Medicare benefits. These new requirements make many settlements both more difficult to achieve and more cumbersome and expensive for parties on both sides of the “v”.
Pieter Conradie: The Consumer Protection Act 68 of 2008 came into operation. Some of the sections will only become effective in October 2010. Section 61 deals with product liability in general. The Common Law has changed with the aforesaid Act and producers, importers, distributors and retailers of goods may now be held liable for harm caused by unsafe goods on the basis of strict liability. Furthermore, the Act allows producers, etc, to rely on only certain defences as stipulated in the Act. Section 61 also deals with prescription of claims in certain aspects different from the terms of the Prescription Act No. 68 of 1996.
Gord McKee: There have been a number of legislative initiatives in Canada during the past couple of years to modernise its product safety laws, enhancing and expanding the federal government’s ability to take compliance and enforcement actions when unsafe consumer products are identified. While the most recent initiatives were stalled in December 2009, it is anticipated that there will be some legislative change in this area during the next couple of years.
Colin Loveday: In Australia, it is not so much past changes but prospective changes that are expected to affect product liability practice. After several years of debate and speculation, the federal government proposes to make wide-ranging changes to our consumer laws and impose new burdens on product manufacturers and suppliers. The reforms relevantly contain three elements. First, an Australian Consumer Law is being developed which would apply at the state, territory and federal levels. Second, there will be a new national product safety regulatory and enforcement framework.
Third, there will be increased enforcement and information sharing between the various regulatory agencies.
Who’s Who Legal: Has the global downturn altered the nature and levels of work in this area?
Pieter Conradie: No. Because plaintiffs are not entitled to sue for punative damages in South Africa, there have not been many product liability matters in South Africa. Because of the strict liability legal principle adopted in the Consumer Protection Act, there may be more product liability cases in future. Furthermore, the Class/Group Actions Bill has not been passed, but groups of plaintiffs endeavour to bring group actions based on the Constitution of the Republic of South African and the High Court rules lately.
Colin Loveday: We have not seen any real change in work levels in the product liability practice.
Mal Wheeler: Bankruptcies and potential bankruptcies of some major manufacturing companies have reduced the value of numerous claims against those companies and caused many members of the plaintiffs’ bar to have to shift their focus to other companies and industries.
Gord McKee: Existing cases involving product liability remained active and many new cases were initiated in the midst of the economic downturn. Activity relating to product liability litigation continues on an upward trend, primarily due to the increasingly high frequency of class actions being filed in most Canadian jurisdictions.
Who’s Who Legal: Which industries or sectors do you expect to be the source of high levels of work in the coming years?
Pieter Conradie: Labour law, environmental law and mediation and arbitration in commercial disputes.
Gord McKee: We have seen a constant flow of activity in product liability litigation involving healthcare products. We’ve also experienced a growth in litigation involving consumer products and food contamination. Any industry or sector whose activities could give rise to class action litigation is a candidate for increased product liability litigation.
Mal Wheeler: The automotive industry, pharmaceutical industry, chemical industry, and toy industry will continue to be the source of high levels of work in the coming years, largely because of the large number of consumers directly and indirectly affected by them. It appears as though the number of lawsuits filed against companies in the food industry is likely to increase as the plaintiff’s bar becomes increasingly aggressive in trying to persuade courts and juries to dictate what citizens, especially younger citizens, choose to eat and drink.
Colin Loveday: Healthcare products and food contamination have been the subject of very close regulatory scrutiny in the past and will be in the future. Given the proposed law reforms, consumer product safety and compliance with relevant industry standards will be very active.
Who’s Who Legal: Have the expectations of clients changed in recent years? Is the practice area becoming more global in scope?
Mal Wheeler: Yes. Corporate clients continue to seek arrangements with their litigation counsel that provide more predictability, both as to defence costs and outcomes.
Pieter Conradie: South African clients tend to select lawyers who specialise and clients want to have more certainty about fees that will be charged.
Gord McKee: There is an even greater emphasis on providing a business-focused and cost-effective defence strategy. Also, as product liability litigation becomes more global in scope, and the plaintiffs’ bar becomes more coordinated on an international scale, clients expect their counsel in Canada to be coordinating well with their firms in other countries, and to be alert for matters that may have an impact outside the local jurisdiction.
Colin Loveday: Clients have ever-increasing cost pressures so they are looking for the efficiencies that can be gained by going to people with specialist knowledge. There is much more awareness of international implications so clients expect that their lawyers know what is happening in other key markets and will provide advice that addresses these implications.
Who’s Who Legal: Has the practice area become more attractive to law firms in recent years? Are you seeing new players looking to expand into this sector?
Pieter Conradie: No.
Gord McKee: I believe it has, in large measure due to the increase in class action activity in the area.
Mal Wheeler: It certainly has in the US, as witnessed by the increased number of large firms that have developed substantial tort-related practice groups in recent years.
Colin Loveday: I agree with Gord. Product liability litigation here has often been conducted as a class action, and experience in these matters is invaluable when applied to other areas of the law.