PRODUCT LIABILITY, DAMAGES, BUSINESS DECISIONS AND ECONOMIC OUTCOMES
CD: Could you highlight some of the trends and developments that you have seen in the product liability space in recent months? What pressing risks and challenges are manufacturers facing?
Egler: The rise of the Internet of Things (IoT) seems to be on everyone’s mind at the moment. But the existing product liability regimes, at least in Europe, were not designed to deal with risks inherent to interconnected products. Significant financial risks could stem, for example, from cyber attacks. The European law, and its national adoptions, establishes the liability of producers, vis-à-vis consumers. But is liability limited in cases where a third party intentionally and maliciously hacks into a software system and causes damage? The multitude of parties involved in the production of smart products, both hardware and software, and the novelty of the subject brings legal uncertainty.
Fleming: There appears to have been an uptick in product liability actions brought by governmental entities, such as states and localities, against manufacturers. These types of suits may seek to aggregate large-scale claims, typically under traditional tort law and other theories, in a ‘parens patriae’ capacity. They are often brought with regard to subject matter areas where state and federal regulations may differ or where regulators may differ as to appropriate enforcement measures.
Oct-Dec 2018 issue
Bird & Bird LLP
Dechert LLP
Kirkland & Ellis LLP