Part 1: Introduction and Product Liability Claim Example…
Injuries caused by defective products don’t always lead to product liability lawsuits. In cases with minor injuries it may be possible to negotiate a settlement without filing a lawsuit or hiring a personal injury attorney. This page gives tips and strategies to help you win a product liability claim.
Product liability cases usually have at least two defendants, sometimes three or more. The most common defendants are the product’s manufacturer and the retail store which sells it.
This page discusses the settlement process as it applies to the manufacturer only. You can use the same tips for a case against a retail store, distributor, wholesaler, or whoever else was involved in placing the defective product on the market for public consumption.
Product Liability is a generic term referring to the legal responsibility of manufacturers, retail stores, wholesalers, distributors and other businesses, to users of their products for injuries those products may cause.
There have been, and continue to be, thousands of products on the market which cause serious injuries and death to consumers. Some common forms of defective products are:
- Defective ladders, where one of the steps gave way causing a consumer to fall from a dangerous height.
- A cream meant to soothe one’s skin. It worked for 90% of the public, but 10% of the public had allergic reactions causing burning and scarring of the skin.
- A toy for children which was supposed to help them “throw” their voice like a ventriloquist but became lodged in a child’s throat causing brain damage for lack of oxygen.
- A gasoline station’s pump failed to shut off as it was supposed to when the hose fell out of the customer’s hand. A fire erupted and several people were burned badly.
There are several types of legal theories under which a product liability lawsuit can be brought. Some of those include:
- Breach of warranty
- Strict liability
For our purposes we won’t concentrate on the legal theories, as those are matters which attorneys and courts delve deeply into. Rather, we’ll discuss some of the ways in which product liability is created, including:
- manufacturing defects
- design defects
- failure to warn the public (about a potentially harmful feature)
We’ll focus our attention on the above 3 instances which create product liability, as these are the most common for consumers. Often all three of these are seen in one product liability lawsuit.
For educational purposes we’re going to present a product liability case example. We’ll use that example to discuss how you as a consumer can get recourse against the manufacturer through their insurance company (by negotiating a settlement for injuries).
For our example we’ll discuss a skin cream which caused burning and scarring to a teenager’s face…
Susan Dugan was 14 years old and just beginning to use makeup. One of her friends recommended she use a new makeup remover cream which she’d been using successfully for some time.
Susan went to the mall with her friends and purchased the cream at a major retail store. She took it home and over the next week used it daily. Toward the end of the week she noticed reddening on her face and her skin began to itch and burn. She didn’t know what was causing it and continued to use the cream for several days more. Finally, when the burning and redness became unbearable she and her parents went to the local medical clinic.
The doctor attempted to treat the burn but was only able to quell the symptoms with some pain medication and antibiotics. She instructed Susan to stop using any makeup or creams and suggested she use only a very mild soap and warm water to cleanse her face. Following the doctor’s orders Susan discontinued use of the face cream and used only a mild soap and warm water. Over the next few days the burning and itching subsided. The redness stayed however, and Susan and her parents became very concerned.
They took Susan to a top a dermatologist. She examined Susan’s face and ran some tests to determine what could be done to rid Susan of the redness. The test results indicated Susan had a rare allergic reaction to the skin cream. Weeks went by and the redness didn’t dissipate. The dermatologist had to be the bearer of bad news and inform the parents that the burn on Susan’s face had actually scarred her skin and may not completely heal.
After seeing a dermatological specialist it was determined the only way to attempt to cover the remaining scar was with minor plastic surgery, taking skin from one part of her body and grafting it onto the scarred area of her face.
Susan’s parents were not insured for this type of surgery. They paid what they could and borrowed the rest from friends and family. The hospital and surgery bills amounted to over $20,000 dollars, and there would be additional medical and out of pocket costs during the healing process. Additionally, although the doctors would do everything they could to minimize the scar, it was possible there would still be some scarring on Susan’s face.
What now? The facts surrounding Susan’s injuries are a classic example of a product liability case. It’s clear Susan’s parents want compensation for the tragedy and trauma that befell their daughter and the medical costs they incurred…
- What do Susan’s parents need to know?
- How do they handle this whole matter?
- What should they say to the insurance company?
- What should they demand in a settlement amount?
In the following pages we give tips and strategies to use when negotiating with insurance companies. The lessons in this discussion apply to many other types of product liability claims.
Once we show you some important tips on how to level the playing field with an insurance company claims adjuster, we’ll then review an example dialogue between a claims adjuster and the victim of a defective product. It reveals many common discussions and negotiating tactics used successfully by victims of product liability.
Tip #1: The Beginning…
Contact the manufacturer of the product. Susan’s parents went online and looked up the manufacturer of the skin cream. They found their company location and 800 number.
Calling the company is the first step. You can also send a certified letter, but in this era of instant communications a telephone call will do just fine. When you say what happened you’ll be routed to the customer service department. Tell them what happened, how the product was defective and the injuries you sustained.
Once you give notice of injury you effectively start the settlement of your case. You’ll either be told to submit your complaint in writing or that someone will be contacting you shortly. Either way it won’t be long before you receive a call from a representative of the company’s insurance carrier, known as a “Claims Adjuster.”
Tip #2: The First Communication…
The initial call will not be a negotiation. It’s more akin to “setting the stage” for the rest of the negotiations. The claims adjuster will identify herself and confirm your identity. She’ll ask for the names of your treating physicians, the hospital you visited when injured and the physicians who treated you in the emergency room.
Don’t worry if you don’t have answers to all of her questions, however the more you can tell her now the less work she’ll have to do later.
Speak with the claims adjuster as you would any other professional. If you treat her professionally she should return the favor. You want the adjuster to take you and the negotiations seriously. Commanding her attention and begrudging respect will go a long way toward an effective presentation and consideration of your case.
- Stay calm, this isn’t a race. Speak slowly and clearly. Make sure before the call you have your thoughts organized.
- Don’t come across as angry or shrill. Understand the claims adjuster is just doing her job. If you make communications bitter or caustic you’ll just make her defensive, and that’s counter-productive.
- Don’t sound desperate. Negotiations may take a while and you’ll have to reserve any desperation for the end. Hopefully it won’t become necessary.
- If you’re negotiating on behalf of your child, like Susan’s parents will be in the above example, decide which parent will do the negotiating. Solidarity will be your friend in the coming days, weeks and months.
The adjuster will also probably let you know she’s sending you a “Medical Authorization,” and request you sign and return it. The adjuster needs the authorization to secure medical records related to the incident, your injuries, and your treatment then, now, and into the future. You don’t have to sign the authorization, but not doing so will certainly impede progress on the case.
Tip #3: The Recorded Statement…
When you first speak with the adjuster she’ll ask for permission to record the telephone call. Although referred to as your “Statement”, it will in fact be a recorded question and answer session. This statement is important and in many ways binding so have a clear mind before you give it.
If you don’t already have a cell phone which can record a telephone call, it would be a good idea to invest in a small tape recorder for your phone. The adjuster will be recording your conversation. There’s no reason why you can’t record the conversation as well.
If the telephone call comes at an inconvenient time, possibly when you are tired or ill, tell the adjuster the truth. Be honest and tell her you’re not up to giving a statement quite yet.
In the example above Susan’s parents should speak with her prior to the initial call to see if she has any questons. The adjuster may want to speak with Susan. We’d suggest that Susan’s parents decline to allow her to speak with the adjuster.
There is no compelling legal reason for a minor to speak with a claims adjuster. If the case can’t be settled and litigation becomes necessary it’s probable your child will have to testify at that time. That’s just another reason why it’s so important to be successful in the settlement negotiations.
Tip #4: “The Whole Truth and Nothing But the Truth…”
Tell the truth without embellishment!
Many people, in an effort to do what they think will bolster their case, tend to exaggerate the facts, add facts, omit facts, and worse lie about them. Doing so is the fastest way to damage your chances of an optimal recovery. The facts are the facts.
Tip #5: Be Prepared…
Before the initial call make copies of all medical bills and receipts of any kind related to the injury and ongoing recovery. These may include receipts for medicines, bandages, salves, parking fees at the doctor’s office, and even a notation about the approximate amount of gasoline used to drive back and forth to doctor’s appointments.
Although you’ll have time to present all evidence of costs incurred it’s better to present them in a chronological and clear fashion at the earliest possible time. Organizing your paperwork is a huge help in settlement negotiations.
Tip #6: Legal Duty…
Sometimes people negotiating their own product liability cases begin presuming they’re owed something – that there’s a legal duty for the insurance company to pay not only their medical costs but additional monies for pain and suffering. That’s a false and dangerous presumption.
There’s no legal duty or law which says an insurance company must pay for medical costs or pain and suffering related to injuries. There’s only the threat of filing a product liability lawsuit and winning a potentially huge judgement against them. They don’t want that to happen and would rather negotiatie a product liability settlement out of court.
Settling personal injury claims, as with most negotiations, is a give-and-take. It helps if you have prior negotiating experience, but it’s not absolutely necessary.
Continue with more tips for settling product liability cases here.
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