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Topics: corporate law
Product liability and product safety in general are globally rising trends, and we have seen a number of developing trends that may over time have far-reaching impacts on especially manufacturers of mobile machinery. More specifically, in my opinion some of the most important themes include the use of proximity detection systems in moving equipment, and manufacturer’s liabilities arising out of diesel fumes. These are both issues that, in my opinion, require manufacturer’s attention already at this point of time, partly due to the following reasons:
The U.S. Mine Safety and Health Administration (MSHA) announced 2015 a final rule that requires underground coal mines to equip continuous mining machines with proximity detection systems. There are certain phase-in times, but the rule states that all machines subject to the applicability of the rule (including machines manufactured and not equipped with proximity detection system on or before March 16, 2015) must be equipped with an approved proximity detection system no later than March 16, 2018. Furthermore, in South Africa employers are required by the amendment to Chapter 8 of Machinery and Equipment Regulations to prevent persons from being injured by collisions with vehicles. This, in practice, must be done with proximity detection systems.
Consequently, such systems will inevitably become quite common in mining equipment. It is also worthwhile to note that even though the MSHA rule and the South African law only concern mining machinery, they are likely to have an impact on other industries as well: as a result of the increasing number of and developments in available technologies, such proximity detection systems are most likely to become more and more commonplace, and the related costs are quite likely to decrease. It is my prediction that as a result of these developments, such proximity detection systems will likely become sooner or later “state of the art” and as such required also in other moving equipment, especially in industrial or otherwise professional use. This, in turn, is in my opinion something prudent manufacturers should proactively consider – especially if the manufacturer receives reports of incidents involving moving equipment.
Diesel exhaust fumes have recently become an increasingly hot topic in the U.S. toxic tort litigation, with plaintiff’s lawyers advertising their services online to persons who have potentially been harmed by diesel exhaust emissions.
In 2012, the International Agency for Research on Cancer (part of WHO) reclassified diesel exhaust emissions as “carcinogenic to humans” in class 1, and the U.S. Department of Labor’s Occupational Safety and Health Administration (OSHA) issued in 2013 a hazard alert concerning Diesel Exhaust / Diesel Particulate Matter. The regulation of diesel emissions has gradually tightened, and an example of this in the EU is the so-called NRMM Regulation on requirements relating to emission limits for internal combustion engines for non-road mobile machinery, passed in September 2016.
I assume that we will see an upward trend in lawsuits where not only the engine manufacturers are sued as defendants, but also other manufacturers whose products are equipped with diesel engines – even though the engine manufacturers are the ones manufacturing the actual engine. This is because it is quite likely that the plaintiffs may simply be looking to maximize the probabilities of success of their lawsuits, but also due to e.g. the fact that plaintiffs overseas (United States, for example) may not be able to prove jurisdiction over a European engine manufacturer.
This all highlights the need of the manufacturers to consider what options do they have at their disposal to mitigate their exposure to liabilities; e.g. not only by taking diesel fumes and prevention of the machine user’s exposure to them into consideration already in product development phase, but also in their agreements.
Even though the lawsuits are not yet coming in in waves, I would advise machinery manufacturers to proactively look into these matters carefully rather sooner than later.
Topics: product liability
The Sveriges Riksbank’s Prize in Economic Sciences in Memory of Alfred Nobel was in December awarded to the Finnish professor Bengt Holmström together with his British colleague professor Oliver Hart. They were rewarded "for their contributions to contract theory". For us lawyers working with contracts the essential message of these Nobel laureates’ work is that contracts should be balanced. The laureates speak about incomplete contracts when obligations and rights are not in balance.
Topics: corporate law