Research confirms that product recalls and product liability claims are on the rise

Posted: 12/12/2017

In the last few years there have been a number of widely reported product recalls, including the Samsung Galaxy Note 7, which had exploding batteries, the faulty Takata airbags that impacted at least 19 auto manufacturers and more than 60 million vehicles in 2015, and numerous washing machines, tumble dryers, dishwashers, ovens, fridges and freezers, which are still in thousands of homes across the UK.

A recent analysis by Allianz Global Corporate & Specialty (AGCS), called Product Recall: Managing the Impact of the New Risk Landscape, has found that product recalls (whereby manufacturers are obliged legally to notify consumers of defective products) have been steadily increasing and have corresponded with an increase in liability claims. The study has shown that issues relating to defective products have been the single largest driver of liability claims, costing manufacturers and insurers approximately US$2 billion (£1.5 billion) in the last five years.

Arran Macleod, associate in the product liability team at Penningtons Manches LLP, says: “Product recalls undermine the public’s trust in of a product or device. With the wealth of information now available on the internet relating to specific product recalls and consumer rights, it is no surprise that there is a strong correlation between the increase in product recalls and the number of product liability claims being made.

“Consumers are entitled to receive products that are safe, and function and work as they are described. If a product is defective and causes a consumer to suffer an injury, that consumer has a legal right, within statutory time limits, to hold the manufacturer of the defective product to account, and to obtain compensation for the injuries caused by that defect.

“Consumers are becoming increasingly aware of their legal rights in relation to defective products, and are less likely simply to accept a product that is defective and, potentially, dangerous. We encourage individuals to know their legal rights and our specialist product liability team has recently produced a fact sheet, setting out how they may be able to bring a product liability claim against a manufacturer.

“If you are aware that an item you own has been recalled by the manufacturer, has a safety notice issued against it, or may be faulty, and that item has caused an injury, then we will be happy to discuss your concerns with you.”

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