7/19/2009Last Friday, the Consumer Products Safety Commission announced that New York-based Haier America had agreed to pay over $500,000 in fines due to their failure to promptly convey to the Government complaints it had received indicating that their fans had a design defect that posed a fire hazard. Predictably, by agreeing to this settlement with the CPSC, Haier continues to deny any wrongdoing.
The significance of this story lies in why Haier was fined. Apparently, Haier had received numerous complaints (more than 10) over a 5 month period, during which period of time Haier conducted its own testing in an attempt to ascertain whether their fans had a defect in design which was causing these electrical fires to occur. In derogation of federal law anyone in the chain of distribution of a product to advise the CPSC within 24 hours after the company has a credible reason to suspect that its product has a defect that could render the product hazardous, dangerous or unsafe), however, they did not report these incidents to the CPSC until after the CPSC contacted them about these incidents. Big mistake.
Although, as noted in "Why There Are So Few Successful Defective Products Lawsuits," a product recall in and of itself will not, in and of itself, prove that the product was defective, and if the recall was issued after your particular accident, it may well be deemed inadmissible at trial, the fact that a recall was issued remains important, because the underlying reasons for the recall, such as prior incidents, may help demonstrate that the manufacturer, distributor or retailer either knew, or had reason to know, that the product was defective before your particular incident, and that may actually help you prove that they were negligent.
Category: Defective Products
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