Post Sale Duty to Monitor Product Risks / Accidents: Boating Industry
We note this post sale monitoring requirement can extend to aftermarket parts and accessory manufacturers as well.
The point of this post is that in order for a manufacture to warn customers of post sale of risks discovered after the sale, the manufacturer must monitor its products in the field, sometimes called post sale or post market surveillance to identify those risks.
This series of posts is NOT PROFESSIONAL LEGAL ADVICE. It was written to stimulate further discussion of the topic.
This post is part of a series of posts. Links to the other posts can be found in the Introduction.
Legally, in the U.S. the requirement comes from the American Law Institute’s publication of the Restatement (Third) of Torts: Product Liability (1998). Their restatement and certain case law requires manufacturers and certain suppliers to warn customers, repair, or recall products in certain instances. While the restatements have no force of law, they have great influence on the courts.
The restatement requires four conditions to be met before a post sale warning would be required:
- the seller knows or reasonably should know that the product poses a substantial risk of harm to persons or property; and
- those to whom a warning might be provided can be identified and can reasonably be assumed to be unaware of the risk of harm; and
- a warning can be effectively communicated to and acted on by those to whom a warning might be provided; and
- the risk of harm is sufficiently great to justify the burden of providing a warning.
The restatement requires a warning when the manufacturer KNOWS of the risk, plus certain other conditions are met. It does NOT require an active monitoring of field safety issues. It only requires action when the manufacturer knows of the risk and certain other conditions are met.No guidance is provided upon how hard the manufacturer should be looking for such risks, but as consumers, we hope they do not deliberately stick their heads in the sand.
Numerous authors and sources discuss the post-sale / post market duty to warn. Courts have generally found no duty to warn if the product was reasonably safe at time of sale (only had minor safety issues at time of sale and did not include a latent defect), a duty to warn post sale if the risk existed at time of sale but was only later discovered, and a duty to warn when a reasonable manufacturer would do so. Not all courts agree on these matters.
Among the variables discussed in the duty to issue post sale warnings by the courts, are the same variables discussed by the restatement: the manufacturers knowledge of the problem, frequency and severity of the resulting injuries/fatalities, the ability of the manufacturer to identify owners of these specific products, and their ability to communicate with them.
Some note that in today’s age, many manufacturers maintain an ongoing relationship with their customers via social media, loyalty cards, warranty issues, software updates, marketing associated products to them, brand loyalty, providing purchase financing services (like the boating industry), providing insurance, providing goods or services by subscription, phone apps, etc.
Some boating industry manufacturers have maintained customer relationships by offering remote engine monitoring / troubleshooting / diagnostic services (Volvo Penta). Engine oil analysis services are offered by some marine engine manufacturers (Cat S.O.S. Services).
These ongoing relationships provide systems through which customers could be warned of risks discovered after the sale. The stronger those continuing relationships are and the more effort the manufacturer spends in maintaining them, the harder it will be for manufacturers to explain why they did not warn these same customers of hazards/risks discovered post sale.
Phases of Product Use
Accidents in the field typically happen in one of four phases of product use.
- Product preparation (such as during assembly or installation)
- Direct use (like while boating, fishing, skiing, floating, rafted up)
- Post-use (trailering, storage, marina slip, etc)
- Disassembly or removal (during repairs, during repowering, towing, annual winterizing, etc)
Most of the accidents we (PropellerSafety.com) are concerned with occur during direct use. Monitoring programs would do well to categorize accidents by phase of product use to see if clusters exist that may need addressed.
46 U.S. Code No.4310 Repair and Replacement of Defects
The Coast Guard’s authority to force manufacturers to warn customers and recall their products comes from U.S. Code. More specifically, it comes from 46 U.S. Code No.4310 Repair and Replacement of Defects. The statue basically says that if a manufacturer of recreational vessels or associated equipment becomes aware of a substantial risk/hazard after the product leaves the place of manufacture, or if the manufacture finds the product fails to comply with No.4302 (regulatory safety standards for individual products or safety devices), they are to provide notification as provided by subsections of this rule within a reasonable time after that discovery.
The U.S. Code applicable to recreational boats and associated equipment says NOTHING about any duty to actively monitor their products post sale. It only says that if manufacturers do become aware of a problem, they are required to attempt to notify users within a reasonable amount of time.
Some other industries have much more defined monitoring requirements, plus this industry is subject to the Third Restatement of Torts in many jurisdictions.
We are just pointing out “U.S. Code” specifically applicable to recreational boats and associated equipment is pretty silent on any requirements to actively monitor products post sale.
Consumer Product Safety Commission
While the U.S. Consumer Product Safety Commission (CPSC) does NOT cover boats, most consumer goods companies turn to the CPSC for guidance in this area.
CPSC has three major resources relevant to monitoring products post sale.
- The Recall Handbook
- National Electronic Injury Surveillance System (NEISS)
- SaferProducts.gov (incidents database)
Known as the Recall Handbook, its lengthy official title, “A Guide for Manufacturers, Importers, Distributors and Retailers on Reporting Under Sections 15 and 37 of the Consumer Product Safety Act and Section 102 of the Child Safety Protection Act and Preparing for, Initiating, and Implementing Product Safety Recalls Including CPSC Fast Track Product Recall Program and use of Social Media” is much more descriptive of its purpose.
The Recall Handbook provides detailed guidelines for manufacturers of goods subject to the Consumer Product Safety Commission. The handbook defines recalls are needed and how they should be conducted. Again, boats and boat motors are NOT subject to the CPSC, but manufacturers can still learn much about what consumers expect of them from the Recall Handbook.
In November 2013 the CPSC proposed significant changes to its voluntary recalls and the recall process. The proposed changes were strongly objected to by industry but provide insight into the expectations of the CPSC.
Proposed changes include requiring firms to mount social media campaigns in conjunction with recalls (which is now required), and to monitor and respond to sales activities of online auctions, and possibly others when goods subject to recalls are being sold.
One of the major tools used by the CPSC to monitor consumer product injuries and fatalities in the field is the National Electronic Injury Surveillance System (NEISS). Several hospitals across the United States and its territories collect patient information from every emergency room visit associated with consumer products. The sample of hospitals reporting is large enough to allow national estimates to be made.
Manufacturers of consumer products can monitor and query NEISS to watch for accidents in their industry and those with their products.
Boating injuries are specifically NOT reported in NEISS. We have long campaigned for their inclusion, but the Coast Guard only briefly funded their inclusion long ago.
SaferProducts.gov provides an environment where consumers can report safety hazards and manufacturers can directly respond to their comments. The resulting database of complaints is a very useful tool for manufacturers of consumer goods trying to monitor post-sale risks and accidents involving their products and similar products built by others. If you sell consumer products covered by the CPSC, SaferProducts.com should definitely be part of your post sale information gathering program.
Some Industries are Much More Advanced in Their Monitoring Methods and Expectations
Some industries are much more advanced in their post sale monitoring methods and in their ability to quickly warn customers should the need arise. The food industry, cosmetics, medical devices, and pharmaceuticals are examples. Some companies in those industries are actually in the business of providing the service of post sale monitoring / surveillance of your products. The Food and Drug Administration (FDA) has taken a leading role in defining the need for post sale monitoring and warning in several of these areas. Some of those industries have regulatory requirements forcing them to actively monitor their product post sale.
Boating industry companies interested in setting up a post sale surveillance / monitoring system could learn from observing these industries.
The boating industry’s consensus standards organization, American Boat and Yachting Council (ABYC), publishes a newsletter called “The Reference Point”. In 2007-2008, The Reference Point published series of articles on product liability topics written by employees of a law firm known for defending major recreational boat and drive boat manufacturers. One of those articles focused on warnings. In it, the author said boating industry manufactures should be aware of the warning practices used by their competitors. He said: “Additionally, the manufacturer should keep abreast on how competitors are addressing particular hazards. While no manufacturer should blindly follow the practices of a competitor, the fact that others have addressed a particular hazard through an alternative design feature or warning warrants consideration in the context of the manufacturer’s own product.”
Europe Leads the U.S. in Defining the Need to Monitor Product Safety Issues Post Sale
A decade ago, in January 2004 the European Union’s General Product Safety Directive (GPSD) increased the responsibilities of manufacturers and for distributors to report safety problems to government agencies. Distributors also have to keep and provide information for tracing the origin of products, and cooperate in actions taken by manufacturers and government agencies to avoid the risks identified. Manufacturers and distributors are to immediately notify government agencies when they know or should have known a product on the market poses a risk to consumers not in accordance with the requirements of the GPSD.
Somewhat similar to the Recall Handbook produced by the Consumer Product Safety Commission, the EU produced a pamphlet titled, Product Safety in Europe: A Guide to Corrective Action Including Recalls. Section 1.2.2 of the pamphlet (pgs.11-12) outlines post sale monitoring requirements in Europe:
Product Safety in Europe: A Guide to Corrective Action Including Recalls
“Producers and distributors must have procedures for monitoring problems with their products. This means you need to have systems to collect and analyze the following information:
- Reports of accidents involving your products
- Complaints from customers, directly or via retailers
- Warranty claims
- Insurance claims or legal actions
- Non-compliances reported by the company’s quality control procedures or by other organisations
- Results of product testing
- Information from service engineers
- Reports on returned components and products
- Any evidence of hazards arising from sales to unexpected user groups
- Any evidence of consumer abuse or misuse of the product
- Any evidence of malicious tampering with products
This information needs to be reviewed regularly for signs that there may be a risk to consumers from any of the company’s products. This is especially important when the design of products changes or new component suppliers are used. If distributors have this information, they should share it with producers.”
Most major boating and marine drive companies are selling in Europe. Their products are designed to meet the RCD (Recreational Craft Directive) to receive the CE mark and they have agreed to meet the requirements listed above in order to sell there. Should we expect less of them here, their own home country in many instances?
The EU pamphlet goes on to explain assessing risk and taking corrective actions when appropriate.
The European Commission continues to discuss how best to handle product monitoring and recall issues.
Several years in the making, International Standards Organization (ISO) ISO 0393:2013 Consumer Product Recall – Guidelines for Suppliers, is an ongoing attempt to harmonize these requirements for consumer products over many nations, and to assist nations with no current requirements.
Lawyers: Monitoring Tips and the Internet
Lawyers use the “post sale duty to warn” restatement (a requirement in at least 14 states by 2008) to insure their unwarned, injured clients are justly compensated. On the flip side, Kenneth Ross at Product Liability Prevention is well known for publishing in this field (post sale duties of manufacturers) and for working with manufacturers to help minimize liability by post sale monitoring of accidents and the proper use of post sale warnings.
Mr. Ross provides some additional monitoring tips including:
- Plaintiff experts may provide some insights on how your products could be made safer
- Competitors at trade shows
- Trade associations
- Post sale information posted on the Internet
- Accidents, lawsuits, verdicts, settlements, or recalls involving a competitor’s product that is similar to yours
- Websites established by plaintiff attorneys and safety expert witnesses pinpoint alleged safety issues
- Similar information from other countries (recall notices, customer complaints, notices of lawsuits claims or accidents from anywhere in the world)
- Claims of near misses from anywhere in the world
- Publications and websites of consumer groups that report on safety issues
Kenneth Ross notes some companies monitor the Internet, especially sites their customers might interact with, and closes his comments regarding monitoring the Internet with this quote;
“Each manufacturer will need to determine whether a follow-up investigation of safety issues raised by customers or product owners who post such information is warranted. Ignoring such information can be perilous. However, following up on all alleged safety problems could be very time-consuming.”
In another publication, Mr. Ross said this of the challenges of monitoring post sale / post market incident reports:
“One big problem with much of this information is that it is unverified and unverifiable. It can be inaccurate, incomplete, a complete lie, overstated, or even understated. For example, many consumers who contact a company overstate the problem in order to try to get a new, free product and possibly be compensated for some alleged injury or damage. Some dealers and retailers, who usually take the side of their customer, the consumer, also tend to overstate the problem or understate the consumer’s fault so as to get some compensation or some damage covered under warranty. And we all know what reporters and plaintiff’s attorneys do. It can be very difficult and time consuming to get to the truth involving these various sources of information.”
A 2008 Connecticut Law Tribune article, Online Efforts Can Put Companies at Risk, said this of Internet resources with respect to post sale duty to warn:
Online Efforts Can Put Companies at Risk. Sarah Olson. Connecticut Law Tribune. 2008.
“No court has yet suggested that manufacturers have a duty to monitor the Internet generally to identify consumers’ concerns about products, in order to issue post-sale warnings. However, where a product complaint becomes widespread on the Internet, it could become evidence of what a manufacturer “should have known.” Certainly, where a consumer makes a complaint directly to a company, prudence would suggest that the manufacturer investigate whether other reports of similar problems are circulating on blogs or other Web-based sites.”
New Safety Technologies
Sometimes products are built with known safety risks (industries refer to some of them as open and obvious hazards), other times users have long been trained in how to avoid a known hazard/risk (like slipping on a wet fiberglass or wood deck). Occasionally new technologies come along that prevent those types of risks. When those new technologies are cost effective and “solve the problem” manufacturers sometimes have a duty to notify their customers of this new solution to an old risk.
For example, if the flesh sensing table saw (Stop Saw) technology was economical and retrofittable, table saw manufacturers would be hard pressed to explain why they did not notify their existing owners of this new safer technology.
Forget Geographical Barriers
Safety problems in one country are indicative of safety problems in other countries. Pool your monitoring lists to better spot problems before they become more widespread.
As Kenneth Ross said earlier, companies need to be monitoring post sale safety incident issues worldwide.
Sometimes manufacturers do their best to insure safe products leave their door, but something unexpected happens in the field, unanticipated misuses, new technologies, new applications for their product, new unanticipated user groups adopt their product, etc.. These changes can lead to accidents. Manufacturers need to monitor those accidents and pre-establish certain cut off points (related to accident severity, accident frequency, and acceptable risks) at which they immediately move those accidents up the chain for closer examination.
The Duty to Monitor Products Post Sale is NOT New
The U.S. Coast Guard has been monitoring safety issues in the field for decades. USCG established the Boating Safety Circular in November 1969 to communicate safety issues to boat and equipment manufacturers, distributors, dealers and others concerned with boating safety. The USCG recall database still lists some recalls from the early 1980’s. Those recalls were generated by manufacturers and the Coast Guard monitoring the performance of boats in the field.
I attended a presentation at Boating Week 2000 in Orlando Florida titled, Failure to Warn: A Product Liability Issue by Richard J. McAlpin of McAplin and Brais of Miami Florida. In that presentation Richard McAlipin talked about the post sale duty to warn. Many industry representatives were in attendance. We covered it back then on our RBBI.com site.
Classic product safety management books call for monitoring products post sale.
Product Safety Management Guidelines. Second Edition. National Safety Council. 1997. Pg. 145 states:
Product Safety Management Guidelines
“A company must receive feedback from the field about the performance of its products. The product safety professional should determine the effectiveness of the field information system in providing data about the type of product and the product distribution system involved. The coordinator should thoroughly evaluate the system’s ability (1) to identify and track a product from the raw material through final sales and distribution stages; (2) to acquire and use field data (complaints, incidents, and accidents); and (3) to implement product field-modification or recall action, where appropriate.”
Product Safety Management and Engineering. Willie Hammer. Second Edition. American Society of Safety Engineers. 1993. Pgs.258 and 259 provide an extensive flow chart showing how government agent notices of deficiencies, customer complaints, dealer deficiency reports, and field service deficiency reports can be utilized to correct safety problems.
Existing Risks at Time of Manufacture
Most of this post comes almost directly from countless articles on the topics of post sale duty to monitor and warn. This particular subtopic (existing risks at time of manufacture) is of our own origin.
We suggest that the actual risk levels associated with some long known boating hazards listed below may have changed since many boats were manufactured. New technologies or solutions may now be available in some instances, therefore monitoring of boating incidents in the field could be useful in these instances as well. Improved, more up to date information might cause boat manufacturers to re-think decisions made long ago, especially in certain situations (boat types, boating activities, propulsion types, etc.).
Among the situations that might be rethought with better, more accurate, current incident data are:
- Propeller accidents
- People drowning not wearing life jackets (life jacket wear rate)
- Ejection/ man overboard
- Outboard motors striking submerged objects and flipping into boats
- The striking of unmarked or poorly marked dredge pipes
- Tiller steered outboards slamming into hard turns when hands are removed from the tiller
- Excessive use of alcohol
- Falling off the bow of pontoon boats / some are bow riding
- Circle of death of unmanned boats of operators not wearing kill switch lanyards (kill switch wear rates)
- Boats striking divers / snorkelers
- Party cove events/festivals in which many boats are rafted together and alcohol is a consumed
- Tubing accidents
- Starting in neutral, trouble finding true neutral in control boxes
- The frequency of bass boat accidents of all types during fishing tournaments and their distribution during phases of the tournament (prefishing, blast-off till the wakes are settled and vessels gain more separation from each other, during the tournament, on the way to weigh-in, post tournament while still at the site).
- People hitting the throttle /shifter on their way overboard shifting boat into gear when falling overboard or when jumping over to rescue others
- People being caught in tow ropes onboard or in the water
- Entrapped by boat propeller (caught on the prop by flesh and/or clothing)
- Water jets forcing fluids into body orifices
These types of accidents were well known when modern boats were built, but the decisions to live with them vs. address them were made long ago based on a different population of vessels, a different population of users, a different population of on water activities, a different horsepower distribution of marine drives (much larger drives today), and a different list of available technologies and safety devices.
In addition to the long time risks mentioned in the previous section, several risks are newer or least being encountered more often by boaters and those in the water.
For example, a friend of mine from the gym loves to kayak but is almost afraid to go out after being nearly ran over by several boats and personal watercraft. Kayak, canoe, and paddleboard incidents (the ones that result in injuries, fatalities, vessel and property damage) are highly under-reported in BARD. A real effort by their manufacturers to monitor incidents could result in attracting safer new designs, tools, and related accessories for boats, PWC’s.
Among the more recently emerging issues that could benefit from increased post sale monitoring are:
- Distracted boaters
- South Florida’s giant weekend gatherings (like Nixon’s Sandbar)
- Some states legalizing marijuana – will that impact boat accidents with our products?
- Money buys power/speed the operator may not be capable of controlling
- The increasing popularity and diversity of non-powered or human powered vessel accidents (paddleboards, canoes, kayaks, etc).
- Wake surfing (wake boarding with no rope) behind outboard motors
Conclusions About Duty to Monitor Boating Products Post Sale
I hope we can all agree:
- Boating industry manufacturers have legal obligation in the U.S. to report significant safety hazards discovered by them post sale to the U.S. Coast Guard and to take appropriate actions.
- The legal duty (responsibility) boating manufacturers in the U.S. owe their U.S. customers to actively monitor their products post sale and warn existing owners of significant safety risks discovered post sale is currently in a state of flux. Some states/courts say yes, some courts say no, some courts base decisions on circumstances (size of manufacturer, ability to identify and warn customers, cost to warn vs. risk, etc.), others directly apply the Third Restatement of Torts.
- Boating industry manufacturers have a regulatory obligation to actively monitor their products post sale and to warn their customers of significant safety risks identified post sale meeting certain criteria in the European Union (E.U.).