Product Liability: How Exposed Are You?

Product Liability: How Exposed Are You?

Mark Crawford

According to regulatory compliance expert James Kolka, management too often ignores the legal and financial threats posed by product liability lawsuits.

“Management often believes that compliance with FDA’s Quality System Regulation (QSR) protects the company from product liability exposure,” says Kolka. “Consequently, the task of product liability management is invisible and not audited. It seems to materialize when there is a lawsuit and a mad scramble to find who is or should have been responsible.”

In fact, says Kolka, the leaders who should be most interested in product liability—quality managers and regulatory managers—rarely view product liability exposure as something that concerns them.

Start-ups are at Risk

Kolka cites a study by an insurance company that indicates management failures (unawareness) were a leading cause of problems with medical device companies in the start-up stages, with or without clinical trials.

“In such cases, failure to recognize product liability and/or clinical risk potentials appeared to arise from the normal evolution of a medical device manufacturer, but this lack of recognition and potential risks were not visible to the management team,” says Kolka.

OEMs are at Risk

The insurance company was surprised to learn that some original equipment manufacturers and contract manufacturers mistakenly believed that they were immune to product liability because of their manufacturing relationship with one another.

“There were situations where no risk management techniques were applied before beginning manufacturing and consequently no actions taken that could have avoided the potential exposure to product liability lawsuits,” adds Kolka. “Some clinical researchers and physicians also expected to be protected from any and all liability potentials and all acts that might occur during the clinical studies.”

Liability Risk Spans the Spectrum

Other major product liability issues related to medical device manufacturing that were noted in the study include:

  • Not fully disclosing the risks and hazard potentials to patients involved in new product testing
  • Researcher credentials were sometimes not authenticated
  • Failure to comply with FDA quality management system regulations for contract manufacturing agreements
  • Failure to adequately investigate and analyze post-study medical device incidents
  • Lack of product safety policy statements or references to patient or product safety in the manufacturer’s quality statements and the mistaken belief by company management that their quality statement alone was adequate protection
  • Lack of documented methods, processes, and procedures for communicating product safety concerns and/or including these methods in the manufacturer’s business processes
  • The management team for many start-up firms was frequently unfamiliar with product liability avoidance
  • Hazard analysis often did not include appropriate analysis of raw materials for biocompatibility
  • Poor management of post-production complaint data
  • Lack of triggering mechanisms to provide an early warning within customer complaint handling systems to allow early intervention by QA/RA personnel
  • Lack of clear product-liability policy statements, or mention of patient and product safety, in a manufacturer’s quality management statements
  • Assumptions by management that compliance with FDA, EU or ISO standards was enough to prevent product liability claims
  • Lack of diligent review of a medical device manufacturer’s Internet websites to identify misleading claims, statements, and testimonials

Proactive Protection

“A surprising number of companies have no coherent structure in place for examining safety concerns and product liability exposure,” stresses Kolka. “There needs to be clear statements, protocols, and personnel assigned to address product liability exposure. A product safety and product liability audit of the medical device manufacturer’s quality management system and practices is also highly recommended. Companies must be aware of their legal exposure and make intelligent decisions instead of bleeding their money because of ignorance, arrogance, or imprudence.”

James Kolka is an international regulatory compliance consultant who specializes in product safety and product liability. Reach him through his blog at or

Pilgrim Quality Solutions

Pilgrim pioneered quality management software more than 25 years ago for regulated enterprises that needed a better way to deliver, track and oversee quality-related activities.

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