Controlling product liability and recall risk

Out-Law Guide | 09 Feb 2011 | 4:46 pm | 1 min. read

There are some measures that businesses must routinely take if they are to minimise risk from their products. These may appear mundane and many businesses assume these measures are in place, but we have found when auditing companies that it is very common for processes and systems to be incomplete or incompletely implemented.

These are the gateways that allow poor product into the field and product risk to escalate even to the point of causing recalls.


Review sale and purchase terms at least every three years.

Review your implementation systems to make sure terms are likely to be incorporated and you know when they are not.

Have exception reporting where your terms are rejected.

Audit supplier & customer contracts regularly to check that:

  • your terms are agreed/incorporated in fact;
  • if not agreed what terms you have contracted on;
  • identify key suppliers and customers and focus on these;
  • evaluate the risk posed by given suppliers/customers not contracting on your terms;
  • evaluate supplier credit worthiness/insurance backing.


Have a responsible manager to undertake and document product risk assessments and implement/evaluate risk control systems.

Regularly assess the risks that your product might pose both to safety and commercially.

Are there effective and complete  systems addressing the main risk areas posed by the product for safety and recall purposes ?

Audit your R & D, suppliers, goods inward, WIP and finished goods recording, sampling, traceability and QA systems – are they demanding enough?

  • Are they documented in a structured way and for sufficient time periods?
  • Are samples, QA and R & D records retained in a structured way?
  • Are critical suppliers quality  audited at outset and periodically ?
  • Are sampling systems in place and  statistically valid?
  • Is good traceability maintained from supplies , through production and to end customer ?
  • Are processes and product requirements documented and observed in production?

Product Crisis Planning

Plan for a product crisis in advance. Have a team which is familiar with the issues and is trained. Have a crisis plan with pre-developed materials and think about a communications strategy.