Legal Concerns about Product Recalls

Recalls or product recalls are requests made to the maker of a batch or an entire production run of a product owing to the discovery of safety issues. This is an effort to limit liability for corporate negligence. Such negligence can lead to costly legal penalties being imposed. The recalls also seek to improve or avoid damage to corporate publicity. Recalls are costly to the company as there may be the need to replace the recalled product or making payments for damages caused in use. Nevertheless this is less costly then the indirect cost that will need to be borne owing to damages caused to brand name

To proceed with making product recalls legally the following sequence of steps need to be followed-

• The manufacturer or dealer notifies the authorities responsible about their intention for recalling a product. There are communication channels set up like consumer hotlines etc. and the scope of the recall that is the particular serial numbers or batch numbers of the products recalled are specified.

• The announcements relating to product recall are released on concerned government agency’s website if it is applicable. Alongside, announcements are to be made in paid notices in the metropolitan daily newspapers.

• A consumer group becoming apprised of the recall will also notify the public by various means.

• It is advised that the consumer returns the goods in whatever condition they may be in to beget complete refund or modification.

The possible ways in which the consumer will be compensated will be varying as per the specific laws related to the consumer trade protection and the particular cause of recall. The particular procedures may however vary according to the local laws prevalent at the place.

It is a fact that there are many recalls that simply go ignored. There are a large percentage of products subject to recall that remain on the road and in the home. The recall system is partly to be blamed for this as this is a complex, decentralized system granting recall authority to six federal agencies- each of which has its own set of rules and regulations. There are also a number of factors that make it difficult for consumers to find out about recalls:

• The manufacturers who are supposed to make a good-faith effort to notify/inform customers who have purchased a defective product may not actually do the needful.

• The web sites of companies may not be posting recall notices online as they are not legally bound to do so.

• It is only the serious drug recalls that are widely publicized as the pharmacy companies are required to review records and contact patients for the Class 1 recalls. This relates to the most serious of the three classes in the Food and Drug Administration’s reporting system.

What consumers need to do is connect to the six agencies handling recalls. They can report unsafe products, research the recall history of some products and register for receiving free weekly e-mail newsletters from the Food and Drug Administration and important safety announcements from the Consumer Product Safety Commission.



By Somdev Mukherjee | Posted on 2009-03-15 21:21:53

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Definition:

A product recall is a request to return to the maker a batch or an entire production run of a product, usually due to the discovery of safety issues. The recall is an effort to limit liability for corporate negligence(which can cause costly legal penalties) and to improve or avoid damage to publicity. Recalls are costly to a company because they often entail replacing the recalled product or paying for damages caused in use, albeit possibly less costly than indirect cost following damages to brand name and reduced trust in the manufacturer.

A country's consumer protection laws will have specific requirements in regard to product recalls. Such regulations may include how much of the cost the maker will have to bear, situations in which a recall is compulsory (usually because the risk is big enough), or penalties for failure to recall. The firm may also initiate a recall voluntarily, perhaps subject to the same regulations as if the recall were compulsory. In the case of a compulsory recall, consumers who fail to dispose of it or return it to the manufacturer for replacement or refund could be fined for as much as $5000.

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