Out-Law Guide | 10 Mar 2020 | 4:12 pm | 2 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:
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, work-in-progress (WIP) and finished goods recording, sampling, traceability and quality assurance (QA) systems – are they demanding enough?
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.
Capture field and factory information about faults: what are they, how many are there, when were they discovered, what are the batch details?
Collect as many samples as possible, take photographs, find inspection reports, identify common factors, identify the affected population.
Beware of admissions in internal or external documents, including emails, before position is established and advised on.
Once enough information is available assess the likelihood of injury and the likely severity.
Once there has been a risk assessment and lawyers have advised, consider whether you are obliged to notify a regulatory.
Be prepared to advise what corrective/recall action is being taken and why or why none is appropriate.
Involve your lawyers from the start to guide on:
If the issue is likely to be large scale or serious, involve PR professionals to support communication with press, customers and government. Ensure that a point of contact for all media enquiries is established and brief all staff, including those answering phones, to direct all queries to the point of contact.
Consider material to include on website.
Notify any liability or recall insurers urgently. Seek to keep insurers abreast and bought in to any recall activity.
Assemble a senior crisis team to be responsible for and to coordinate the handling of the issue.
Consider quarantining product that is suspect in a factory, warehouse or distribution chain while information is gathered and assessed.
Recover and store in conditions where it will not degrade fault examples or all recalled product if possible and practical to evidence any recovery claim.