Legal Protection Always Beats Liability Exposure
James Kolka is an expert in risk assessment, especially international regulatory compliance, which includes both the requirements of regulatory authorities and the legal implications of compliance, non-compliance, and documentation (or lack thereof) that could result in litigation.
Kolka has written extensively about risk management, risk assessment, risk analysis, and hazard analysis. These are essential for the design and manufacture of safe products, including medical devices and pharmaceuticals. Kolka notes the European Union has done an excellent job of identifying product essential safety requirements, asking companies to identify what EN (Euro Norm) harmonized standards they are using to demonstrate conformity to those requirements.
“The EU’s Principles of Safety Integration spells out the classic design trilogy: (1) Design out hazards, (2) Guard against those hazards that can’t be designed out, and (3) Warn against those hazards that can’t be designed out or guarded against,” says Kolka. “Of course, as always, the devil is in the details. Since several new approach directives allow for manufacturer self-certification, there is an opportunity to be sloppy.”
That last comment will seem like an understatement when you read the examples below.
Kolka was asked to examine the litigation records of a manufacturing division of a parent corporation that was losing so much money in lawsuits that it erased their profits. The absence of design records, hazards analysis, design changes, safety manuals, etc. was, in his words, “appalling.” “Had plaintiffs’ counsel been more competent and examined the company’s design records, the losses would have been far greater,” Kolka adds.
Perhaps the biggest blow was the decision of the company’s insurance carrier to pay a plaintiff $5 million dollars and increase the company’s deductable to $2 million per lawsuit. The various “machinery safety manuals” described safety features and safety options, oblivious to the liability exposure presented by safety options that should have been safety features.
Kolka then noticed CAUTION and DANGER decals on the finished machines and asked what type of hazards analysis was used to determine what warnings were used and why. He was directed to a company that provided the decals. “They said they were a printing company that provided the decals ordered by the manufacturing company,” says Kolka. After further inquiry he discovered that nobody there had any idea about the origin of the warnings and how they were determined. They simply replicated what existed on existing machines. “The concept of hazards analysis was completely foreign,” says Kolka. “Following a litigation analysis, corporate counsel and management decided to sell the division.”
CE marking lawsuits in U.S. federal courts have involved industrial accidents and, in one instance, a defective machine at the center of a contractual suit. Just like ISO 9001 where requirements are contained in a document outlining the specifications for certification, CE-marked machines are governed by the requirements set forth in the EU Machinery Directive and related directives.
“While the Machinery Directive allows companies to self-certify in most instances, specific sets of requirements exist, including an Annex VII Technical File Part A (the index) and Part B (the actual file in paper or electronic form). Information that should be in these files includes:
- Description of the machinery, detailed drawings, and documentation of a risk assessment
- A list of the essential health and safety requirements that applies to the machinery
- Description of the protective measures implemented to eliminate identified hazards or to reduce risks and when appropriate, and the indication of any residual risks
- The standards and any other technical specifications used, indicating the essential health and safety requirements covered by the standards
- Technical reports giving the results of the tests carried out either by the manufacturer or applied by a body chosen by the manufacturer or its authorized representative
- A copy of the instructions for the machinery
- Where appropriate, the declaration of incorporation for included partly completed machinery and the relevant assembly instructions for such machinery
- Where appropriate, copies of the EC declaration of conformity or other products incorporated into the machinery
- A copy of the EC declaration of conformity
The directive also specifies the technical file must be made available to the authorities of the Member States for at least 10 years following the date of manufacture of machinery or, in the case of series manufacture, the last unit produced.
“Needless to say, it isn’t difficult to determine if a manufacturer honestly attempted to comply with the requirements of the Machinery Directive and related directives,” says Kolka. “The issue of the particular directives in force when the machine was manufactured, and specifically the EN harmonized standards that were in force when machine was manufactured, are minor technical issues easily resolved.”
In a recent case that was settled out of court, Kolka reviewed what he termed a “junk file” that didn’t meet any of the Annex VII Technical File requirements. “Worse yet, the most relevant EN harmonized standard for this particular machine not only wasn’t followed, but the required protective shield did not meet safety specifications of the standard, resulting in a fatality and two workers injured for life, requiring 24-hour medical care for the rest of their lives. Finally, there wasn’t anything remotely approaching a required risk assessment. Writing an Affadavit for the Court was not difficult.” The end result was an $8-million settlement.
The opposite of legal protection is liability exposure.
“The absence of a competent risk assessment provides a plaintiff with a wonderful opportunity to examine what, if any kind, of risk assessment existed and counter with a detailed breakdown of what risks should have been examined,” says Kolka. “The best way for a manufacturer to avoid this is to follow the EN Risk Assessment Standard that was in place when the machine was manufactured. Then review the directive(s) requirements and examining the EN harmonized standards to be sure conformity with the essential requirements has been met.”
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