Surviving in the legal jungle: Huge US product liability claims can give unprepared British exporters a nasty shock. Roger Trapp reports

IT IS not only European tourists that face a mugging when they travel to the United States. Companies, too, can be severely done over.

The dangers lie not in dark alleys and airport sliproads, but in the courthouses of the most litigious nation on earth. While anxious tourists brush up their self-defence, exporters sign up for seminars designed to demonstrate how the risks of huge product liability claims can be reduced.

The point has been brought home by the record dollars 100m ( pounds 65m) award made against General Motors, the US's biggest vehicle manufacturer. In February, a jury in Atlanta, Georgia, decided that the company should be held responsible for the death of a youth whose pick-up truck caught fire after a crash with another GM truck.

Although the other driver was drunk and the accident took place at high speed, GM was considered jointly liable because of the design of the truck's external fuel tank, which blew up after the crash.

Since the decision has prompted a government inquiry that could lead to nearly 5 million vehicles being recalled, the eventual costs to the ailing car maker could be 10 times the size of the court damages.

The case is an extreme example of a situation that James Tipler, the US attorney who is leading the seminars here, says has been exaggerated. However, he does warn that companies attracted to exporting to the US, particularly at a time when the dollar is relatively strong, could be crippled or even destroyed if they do not pay attention to the country's product liability legislation.

The exact cost of product liability actions is not known. But official estimates put the price of civil compensation - of which product liability is a part - at about dollars 15bn a year.

'It's a real fear, but it's a manageable fear,' he says, adding that it would be foolish to give up the chance of selling into the world's biggest market without knowing what the true picture was. 'It's not just a case of throwing your product into a mad system. There are rules to it.'

Recently, the first group of companies, ranging from pharmaceuticals groups to toy makers, heard him set out those rules. If they went expecting a stinging denunciation of the US legal system, they would have been disappointed. As a lawyer who represents the victims rather than the manufacturers, he is a stout defender of the situation, even of the principle of juries deciding on the scale of damages.

Mr Tipler acknowledges that this has the potential to produce large awards, but believes that juries are in better touch with personal emotions than many judges.

'If you look at jury awards they are commensurate with what has happened. They are terrible things. People don't slip on a banana peel and get a million dollars.'

What somebody like himself has to prove in front of a jury is that the product in question was defective and caused an injury to somebody even if the manufacturer acted properly.

He admits that this is a vague definition that causes widespread concern, particularly among manufacturers. However, he insists that this is part of its power. Through being so wide-ranging, it encourages companies to make their goods safer.

As evidence, Mr Tipler cites the fact that by the end of this decade nearly every car in the US will be equipped with an airbag, while very few will be in Europe. 'Products in the States in general are safer than those elsewhere,' he said.

Not surprisingly, lawyers bringing these cases have the support of consumer groups such as the Centre for Responsive Law headed by Ralph Nader, who made his name with his campaign against the Chevrolet Corvair car under the slogan 'Unsafe at any speed'.

Even cars made by US companies for export to Europe are not as safe as the same goods sold in the domestic market.

For instance, when the steering wheel is moved to the other side of a car other changes are made that require different safety measures. Since these are expensive, they are not carried out unless they are necessary.

Mr Tipler's first lesson, then, for European companies seeking to expand into the US is that they should make make their products to American standards.

'YouE can't prevent a law suit even with the best of intentions,' heTHER write error said. But there are things that can be done that will help a company to win.

Foremost is what is known as the test protocol. Even in the US, products are not required to be totally safe. Instead, they have to meet standards set by experts to determine whether a company's products are 'state of the art' for safety.

Exceeding such standards greatly enhances the chances of winning the case. Discussion of these tests can become highly complicated, creating a great role for experts in explaining to juries what the tests amount to and in challenging evidence.

Mr Tipler accepts that some companies may feel that improving safety measures is too expensive. But he points out that the most obvious alternative - taking out insurance - is hardly cheap.

A third option - relying on one country's laws not being enforceable in another - is not available to British companies because of the strong links between the British and US legal systems. Not surprisingly, Mr Tipler is not anxious to emphasise where taking such an approach might work.

Indeed, for all the advice he is proferring, he is showing no signs of going soft on manufacturers. The man who started his legal career representing entertainers and film studios accepts that he is turning from poacher into gamekeeper for the purposes of the series of seminars that continues in July. But it is not a permanent change.

Already unusual in having offices spread between southern California, Florida, Alabama and Washington DC, he has just opened a London operation that will make it possible to bring cases in the US on behalf of Europeans injured by products made by US companies.

(Photograph omitted)

Start your day with The Independent, sign up for daily news emails
Arts and Entertainment
Books should be for everyone, says Els, 8. Publisher Scholastic now agrees
booksAn eight-year-old saw a pirate book was ‘for boys’ and took on the publishers
Life and Style
Mary Beard received abuse after speaking positively on 'Question Time' about immigrant workers: 'When people say ridiculous, untrue and hurtful things, then I think you should call them out'
tech
Life and Style
Most mail-order brides are thought to come from Thailand, the Philippines and Romania
life
News
i100
Life and Style
tech
Voices
Margaret Thatcher, with her director of publicity Sir Gordon Reece, who helped her and the Tory Party to victory in 1979
voicesThe subject is being celebrated by the V&A museum, triggering some happy memories for former PR man DJ Taylor
ebooks
ebooksA special investigation by Andy McSmith
  • Get to the point
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Ashdown Group: Business Analyst - Financial Services - City, London

£50000 - £55000 per annum: Ashdown Group: Business Analyst - Financial Service...

SThree: Trainee Recruitment Consultant

£18000 - £23000 per annum + OTE £45K: SThree: At SThree, we like to be differe...

SThree: Trainee Recruitment Consultant

£20000 - £25000 per annum + competitive: SThree: Did you know? SThree is the o...

Recruitment Genius: Administrator - IFA Based

£22000 - £24000 per annum: Recruitment Genius: This is an opportunity to join ...

Day In a Page

General Election 2015: Chuka Umunna on the benefits of immigration, humility – and his leader Ed Miliband

Chuka Umunna: A virus of racism runs through Ukip

The shadow business secretary on the benefits of immigration, humility – and his leader Ed Miliband
Yemen crisis: This exotic war will soon become Europe's problem

Yemen's exotic war will soon affect Europe

Terrorism and boatloads of desperate migrants will be the outcome of the Saudi air campaign, says Patrick Cockburn
Marginal Streets project aims to document voters in the run-up to the General Election

Marginal Streets project documents voters

Independent photographers Joseph Fox and Orlando Gili are uploading two portraits of constituents to their website for each day of the campaign
Game of Thrones: Visit the real-life kingdom of Westeros to see where violent history ends and telly tourism begins

The real-life kingdom of Westeros

Is there something a little uncomfortable about Game of Thrones shooting in Northern Ireland?
How to survive a social-media mauling, by the tough women of Twitter

How to survive a Twitter mauling

Mary Beard, Caroline Criado-Perez, Louise Mensch, Bunny La Roche and Courtney Barrasford reveal how to trounce the trolls
Gallipoli centenary: At dawn, the young remember the young who perished in one of the First World War's bloodiest battles

At dawn, the young remember the young

A century ago, soldiers of the Empire – many no more than boys – spilt on to Gallipoli’s beaches. On this 100th Anzac Day, there are personal, poetic tributes to their sacrifice
Dissent is slowly building against the billions spent on presidential campaigns – even among politicians themselves

Follow the money as never before

Dissent is slowly building against the billions spent on presidential campaigns – even among politicians themselves, reports Rupert Cornwell
Samuel West interview: The actor and director on austerity, unionisation, and not mentioning his famous parents

Samuel West interview

The actor and director on austerity, unionisation, and not mentioning his famous parents
General Election 2015: Imagine if the leading political parties were fashion labels

Imagine if the leading political parties were fashion labels

Fashion editor, Alexander Fury, on what the leaders' appearances tell us about them
Phumzile Mlambo-Ngcuka: Home can be the unsafest place for women

Phumzile Mlambo-Ngcuka: Home can be the unsafest place for women

The architect of the HeForShe movement and head of UN Women on the world's failure to combat domestic violence
Public relations as 'art'? Surely not

Confessions of a former PR man

The 'art' of public relations is being celebrated by the V&A museum, triggering some happy memories for DJ Taylor
Bill Granger recipes: Our chef succumbs to his sugar cravings with super-luxurious sweet treats

Bill Granger's luxurious sweet treats

Our chef loves to stop for 30 minutes to catch up on the day's gossip, while nibbling on something sweet
London Marathon 2015: Paula Radcliffe and the mother of all goodbyes

The mother of all goodbyes

Paula Radcliffe's farewell to the London Marathon will be a family affair
Everton vs Manchester United: Steven Naismith demands 'better' if Toffees are to upset the odds against United

Steven Naismith: 'We know we must do better'

The Everton forward explains the reasons behind club's decline this season
Arsenal vs Chelsea: Praise to Arsene Wenger for having the courage of his convictions

Michael Calvin's Last Word

Praise to Wenger for having the courage of his convictions