The risk of accidents and products liability can never be completely eliminated. However, potential liability can be minimized by reducing the probability of accidents and, if an accident does occur, by reducing the severity of injuries and damage, thereby improving the chances of prevailing should the accident result in claims or litigation. Thus, the goal of any product safety program is to minimize accidents and to provide a good defense if lawsuits occur.
Most medical device companies focus almost exclusively on regulatory compliance. As a result, companies frequently do not devote adequate attention or resources to product safety. This article will discuss best practices in product safety management.
A product safety management program cannot be implemented adequately without conscientious oversight by strong managers. This is because product safety considerations and related expenses may get in the way of marketing, manufacturing, and cost-saving efforts. Companies that are able to implement effective product safety management programs typically have in place a clear directive from the chief executive officer and other members of the senior management team.
There are many well-known, long-used procedures for implementing a product safety management program. The difficult task for any company is to determine what policies and procedures make sense for their corporate culture, organizational structure, level of risk and risk tolerance, and the amount of resources currently available or to be made available to manage risk acceptably.
I will discuss some of the more well-known policies and procedures as well as the initial product safety and liability audit that companies should undertake to facilitate rational decision-making on how to get started and how far to go.
Product Safety and Liability Audit
Establishing a new product safety management program in a manufacturing company can be difficult if the potential hazards involved in the manufacture and sale of the company’s products are not known. In addition, determining the scope of the program is very speculative without a clear understanding of the status of the manufacturer's practices that affect safety and liability. Before, and even after, a product safety program is implemented, a good way to obtain relevant data is to perform a product safety and liability audit.
If an audit is being done in response to claims and litigation, you should first analyze those occurrences to identify the company's most immediate problems. Many things can be learned from present and past claims and litigation. First, you can identify the accident mode and severity of injury. Also, if litigation has progressed far enough, you can identify the theories of negligence and product defects alleged by the plaintiff. Lastly, you can look to the results of the past litigation and claims to see how the company, the injured party, and possibly a judge or jury viewed the litigation.
But an audit shouldn’t stop with your incidents, claims, and litigation. Evaluating adverse incidents and related events suffered by your competitors can also provide useful information as you try to predict future risk.
If there have been few claims or litigation involving you or your competitors, an audit is more difficult. Here, you need to take a much broader look at the product, the users, the environment of use, and the potential for injury to determine the level and type of risks that arise from the product and what can be done to minimize them. This audit can be part of a risk assessment and hazard analysis.
Audits can be performed in different ways. First, the company can employ safety professionals (such as risk control personnel from Medmarc) to come to a particular division, interview key personnel, and make recommendations on the basis of their responses (referred to as an “on-site audit”). Another method is to have key personnel fill out questionnaires, elicit similar kinds of information as gathered during an on-site audit, then have safety professionals interview these personnel about their responses. Then recommendations, as before, are made based on the responses.
If there will be an attempt to establish an attorney-client privilege over any of the audit results, it is necessary to have the audit controlled or performed by lawyers. A good argument can be made to invoke privilege if the attorney directly interviews the company's personnel and the company has retained the attorney to render legal advice about minimizing products liability risks.
It might also be possible to argue for privilege if the attorney requests that a safety professional interview personnel and analyze the product’s risks and provide a report to the attorney so that the attorney can provide legal advice. Where litigation is involved or anticipated, it may be possible to invoke the work-product privilege over the audit results.(1)
One way for a company to perform an initial audit of each of the manufacturing divisions is to utilize a combination of inside and outside safety and legal professionals who should draft an audit questionnaire to be sent to division personnel. The audit should elicit preliminary information so that particular divisions can be targeted for comprehensive audits.
While the size and structure of a manufacturing division can change the audit procedure, generally the preliminary questionnaire should be directed to the division's management, such as the general manager and heads of marketing, safety, engineering, service, and manufacturing, plus any inside or outside attorney familiar with the division's claims, litigation, and safety practices. Responses to the questionnaire should help quantify the risks and identify personnel who should be interviewed during a more comprehensive audit.
The audit questionnaire I have used over the years is divided into a number of different areas. First are questions pertaining to the management of that division as it relates to safety. Next are questions relating to the performance of the division's product safety coordinator. A large section of the audit questionnaire pertains to the development of product safety standards.
In the “design and development” area are questions about preparing design specifications, doing risk analysis, performing design reviews and conducting engineering evaluations to verify compliance with safety and FDA regulatory requirements. This segment also asks about labeling specifications for warnings and documentation concerning installation, operation, and maintenance.
Other sections of the questionnaire asking about product safety standards cover purchasing, manufacturing, and quality functions. For example, in purchasing, there are questions about inserting hold harmless and indemnification clauses in purchase agreements and ensuring that there are appropriate warranties from suppliers.
In manufacturing, have standards been prepared to define handling and storage of the product as it is being manufactured and are procedures in place to prevent the introduction of unreasonable hazards into the product? The questionnaire asks numerous questions about the quality function and whether it ensures that appropriate product safety inspections and tests are performed and documented.
Under the subject “external relations” are questions about marketing literature, advertising and promotional material, and instructional literature. The audit next asks about procedures for handling product safety problems, including dealing with customer complaints and performing product withdrawals or recalls.
It is important to create and retain records that document the division's product safety program. The audit questionnaire elicits information about what documents are created and how they are retained.
The last three sections of the audit pertain to education and training of division personnel, performing the product safety audit, and creating a product safety compliance manual.
Most likely, many of the questions in the audit questionnaire do not need to be answered by each individual receiving this document. Therefore, the time necessary to answer can be short. The major expenditure of time will come in helping the division establish standards where necessary and ensuring compliance.
After a company has performed a risk assessment and audit of its products and procedures, it can then consider what kind of a product safety management program is appropriate. The procedures are well known, but the hard part is to decide what level of resources should be devoted to a particular company’s program.
The decision is based on the perceived level of risk from the company’s products and practices and the risk the company is willing to assume. The following is a discussion of specific components of a product safety management program.
Product Safety Policy
One large U.S.-based multinational company, which has had a corporate product safety policy in effect since the early 1970s, states as its objectives: “Actions shall be taken to identify and minimize potential product hazards during all phases of the product's life including development, design, manufacture, marketing, installation, service, use and disposal. Reasonable measures shall be taken to minimize the risk of injury to persons and damage to property and the environment, giving full regard to applicable federal, state, local and industry safety standards, regulatory requirements, technology, state-of-the-art and conventional standards of care and use required by society.”
This safety directive also states that it is company policy to provide quality products and services that perform their intended functions safely and reliably and with minimum effects on the environment. The policy goes on to say that each functional department in an operating unit is supposed to integrate quality, safety, and reliability into its departmental practices and procedures and that there should not be a separate safety program set up in each operating unit.
From a lawyer's standpoint, having a corporate product safety policy like the above is a “no-brainer.” Every manufacturer should be, and most are, concerned with producing reasonably safe products. Whether you are a manager or a defense attorney, it is helpful to point to a document—endorsed by the board of directors, the chief executive officer, and/or the president—which confirms this safety concern and articulates a commitment to product safety. In addition, it is possible to use this policy in court or before a government regulatory agency to demonstrate a corporate interest in safety.
The safety policy may also clarify the safety-related responsibilities of each department within that manufacturing entity and can discuss the inter-relationship between departments in performing their daily jobs. The policy should also itemize the different departments that are concerned with safety. Such departments usually include general management, marketing, engineering, quality assurance, manufacturing, purchasing, field service, risk management, finance, safety management, and legal.
Also, it may be reasonable for the company to have both a corporate product safety policy and a division safety policy. The division policy may differ in that it is more customized to the division’s structure, product line, and culture. There are very few companies with highly competent and adequate product safety resources at corporate headquarters that can do all of the things required by every division or product line. Therefore, having a division-specific product safety policy, can be very helpful to set the stage for a safety program.
The content of such a policy can be very detailed or very broad. From a legal standpoint, the important consideration is that the policy has goals that are achievable. It is not necessary for them to be achieved today or achieved to perfection. They can be aspirational, but they must be achievable at some time in the future. Don’t raise the bar too high, but also don’t leave the impression that the company’s policy aimed to achieve the bare minimum and created just for a jury.
Product Safety Manager
The company culture, corporate structure, risk tolerance level, and personnel policies will help dictate whether a product safety manager/director is necessary. Companies have said for many years that it is everyone’s job to make a safe product. And it really is. But, product safety can be too difficult to be accomplished by people without any special training or responsibility.
First, let me distinguish between a manager at corporate headquarters and safety personnel at the division level. A corporate product safety manager is likely appropriate if there is a corporate product safety policy, products liability lawsuits are handled at corporate headquarters, and personnel at headquarters are responsible for reporting problems to the FDA.
At either the corporate level or division level, a product safety manager does not have to be a full-time function. It can certainly be combined with the regulatory, quality, or product reliability functions. However, I think it is a good idea to have someone with some amount of training to have product safety in his or her job description. If a full-time manager is appropriate, it is an open question as to where to place that person.
At the division level, the conventional wisdom is that product safety pervades engineering, manufacturing, regulatory, purchasing, quality, parts, sales, and field service. Placing product safety personnel in one of those departments may narrow the focus too much and put that person in possible direct conflict with a supervisor who may not appreciate some of the activities or criticism generated by a product safety professional.
While it is possible for the product safety manager to report to the engineering manager or manufacturing manager, it may not be a good idea because there might be some additional pressures placed on the safety professional in the event that design changes, recalls, or changes to manufacturing procedures are necessary. In addition, having the safety professional report to the general manager of that manufacturing entity further confirms management's commitment to safety and confirms that the safety professional is representing senior management in trying to encourage all personnel to be concerned about safety in that company's products.
Product Safety Committee
While each of the separate functions in any company need to have policies and procedures indicating how safety is to be considered in each person's day-to-day job, it is also possible for the manufacturing entity to create a product safety committee comprised of individuals from various departments. This committee, as with the product safety manager, may be located at both the corporate and division level.
The responsibilities of such a committee could be to:
establish guidelines and criteria for the identification and quantification of product hazards;
perform design reviews and other analyses to minimize product risk to an acceptable level;
establish guidelines and criteria for creating warning labels and instruction manuals;
establish guidelines for creating advertising, promotional brochures, and other printed sales material;
establish guidelines for the creation of product warranties, exculpatory clauses, and contractual disclaimers in contracts and purchase orders;
analyze product problems and determine a need to notify the FDA and/or the need to recall products;
retrofit products or issue safety warnings; and
create a document retention policy and procedure as it relates to safety and reliability.
Additional measures that can be undertaken by the individual members of the product safety committee include:
developing and administering audits of the product safety program;
developing and implementing training programs for company personnel;
developing an accident or incident reporting system with guidelines for follow-up by appropriate personnel;
assisting attorneys in the investigation and defense of products liability claims and litigation;
representing that company in industry-wide or government groups related to safety; and
administering recall/retrofit/warning letter programs for the manufacturing entity.
A product safety manager should chair the committee, whether the manager is part time or full time. Lawyers can have an integral role in overseeing this committee. In that role, a lawyer can provide legal input on design, manufacturing, and marketing questions, review and revise minutes of the committee meetings, and try to ensure that proper documentation is being created and kept of the progress made in solving safety problems.
Since lawyers are trained to be good communicators, their legal role can be expanded to assist product safety committee members express themselves more clearly about safety problems, about the ways in which these problems are managed and solved, and how to improve communications throughout the design, manufacturing, and marketing processes.
While it is not necessary for the safety professional to have a degree in safety, to have worked in safety for many years, or to be part of any safety management society, it is advisable for this professional to have some safety training. There are several reasons for this. First, this training and experience will likely improve that person's performance in this important job. Second, in the event of claims or litigation, in order to convince the other side of the company's commitment to safety, it is helpful to have a safety professional who is professionally trained and has experience in the safety area. Likewise, having a product safety committee is a further example of that commitment.
If a company establishes a product safety policy and does nothing else, an injured claimant can create the impression that the company does not seriously care about the safety of its customers or end-users. A company’s commitment to product safety must be real as demonstrated by the company’s audit practices, the content and implementation of its product safety policy, the formation and activities of its product safety committee, and its retention of qualified, educated safety professionals. While it may be impossible for a company to eliminate risk entirely, the actions that a company takes to ensure product safety can go a long way to improve the company’s defense position should a products liability claim or lawsuit arise.
(1) Remember that the successful use of privilege only protects the oral or written communications between attorney and client and not necessarily the underlying information given by the personnel to the attorney. Therefore, if an engineer feels that the current design of the product is deficient, the other party in the lawsuit can obtain that information during the discovery process, whether or not the information was given to the attorney during the audit.
Kenneth Ross is Of Counsel to the Minneapolis office of Bowman and Brooke LLP where he practices in the areas of product safety and liability prevention and advises manufacturers, product sellers and insurers on ways to identify, evaluate and minimize the risk of products liability and contractual liability. These guides do not constitute legal advice and are very general. You should consult competent legal counsel or Medmarc Loss Control before acting on any of the information in these guides.