Lying About Product Safety Defects: Legal Liability

Lying About Product Safety Defects: Legal Liability

Companies have a responsibility to make safe products, but sometimes greed and pressure to maximize profits lead them to cut corners. When defective products cause injuries, companies may try to cover up the defects through lies and deception. However, legal liability awaits companies that engage in such unethical practices. This article examines the laws around product defects, the consequences for companies that lie about defects, and potential defenses.

Product Liability Laws

Several laws impose liability on manufacturers and sellers for defective products. The main ones are negligence, breach of warranty, and strict liability.

Negligence means the company failed to exercise reasonable care in making the product safe. Plaintiffs must prove the company owed a duty of care, breached that duty, and caused injury as a result. Companies have a clear duty to avoid designing/making products they know are dangerous.

Breach of warranty claims focus on broken promises about a product’s safety and suitability. Express warranties come from specific claims by the company. Implied warranties of merchantability and fitness for a particular purpose arise by operation of law.

Strict liability is the harshest standard, making companies liable if a product has a defect that causes injury, even if the company wasn’t negligent. Plaintiffs only need to prove defect, causation, and damages.

Lying About Defects

When companies become aware of defects through testing, consumer complaints, or injury lawsuits, some consider covering up the problem to avoid liability and loss of sales. This may involve:

• Failing to notify regulatory agencies like the CPSC about known hazards
• Issuing false public statements denying any problem exists
• Blaming injuries on user error rather than a defect
• Settling lawsuits confidentially so others don’t learn of the hazard

Such deception defrauds customers relying on the product’s safety. It also prevents regulatory agencies from investigating and ordering recalls, allowing more people to be harmed.

Legal Consequences

Lying about defects can multiply legal liability in several ways:

• Punitive Damages – Plaintiffs can recover punitive damages if the company’s conduct was particularly reprehensible. Courts punish deception harsher than mere negligence.
• Criminal Penalties – Federal law prohibits making false statements about product safety issues. Violations can result in millions in fines and jail time for executives.
• Increased Compensatory Damages – Lies and cover-ups prevent consumers from avoiding the product, causing more injuries. More victims mean higher compensatory damages.
• Attorney Fees/Costs – Plaintiffs may recover attorney fees and costs if the company’s deception unnecessarily prolonged the case. Destroying evidence can also lead to such sanctions.

Potential Defenses

Companies caught lying about product defects often argue they were simply engaging in aggressive defense tactics, not outright deceit. Some potential defenses include:

• Conduct was on advice of counsel so shouldn’t be punished
• Statements were opinion or puffery, not lies about material facts
• Employees acted without management’s knowledge or approval

However, such defenses face an uphill battle when there is clear evidence of intentional falsehoods. Courts and juries rarely sympathize with deceit by large corporations.

The Bottom Line

Lying about product safety issues is unethical and usually backfires. Companies should be transparent about known defects and invest in designing safe products. Taking responsibility isn’t just the right thing to do, it’s the smart legal strategy. Deception leads to harsher liability that ultimately costs more than making amends.