MANAGING PRODUCT LIABILITY IN THE CHEMICALS SECTOR

CD: What are some of the key trends in product liability that have affected the chemicals sector over the last 12-18 months?

Hitchcock: Over the last 18 months there has been a general increase in regulatory interventions arising from whistleblowing and competitor complaint. The chemical sector has so far seemed to have come off relatively lightly in this respect. Actual intervention by enforcement authorities seems to have focused more heavily on other sectors, whereas regulatory preoccupations of the chemical sector have focused more on compliance with legislation such as the REACH regulation which involves a significant degree of self-regulation by suppliers. However, businesses in the sector should not be complacent. The impact of REACH has seen chemical manufacturers hit the spotlight and their products be more acutely scrutinised. Non-compliance with REACH or other regulations can have not only recall consequences but also criminal liability issues. There are also significant business implications if a product cannot be released until it is shown to be compliant. This is just as damaging, if not more so, than the consequences of a controlled specific batch recall, for example.

Akyurek: The chemical sector is not perceived well by the public. At a time when health is considered a high priority, chemical companies have been increasingly criticised. Several dramatic industrial and chemical accidents have reinforced this idea. As a consequence, changing the vision that public opinion may have about the chemical sector has become necessary. In May 2014, the French General Assemblies of the chemical sector took place in Paris. Emphasis was placed on transparency and liability of chemical industry stakeholders. Chemical sector companies are willing to improve their external communication, especially with regard to consumer information on components used in chemical products.

Apr-Jun 2015 issue

DLA Piper UK LLP

Jones Day

Rivkin Radler LLP

Skadden, Arps, Slate, Meagher & Flom LLP