Cutting Corners? How Choosing Cheaper Materials Can Lead to Product Liability Lawsuits

In today’s market, manufacturers face immense pressure to minimize costs and maximize profits. However, the temptation to cut corners by using cheaper materials can have severe repercussions, potentially leading to product liability lawsuits. A seemingly small change in material selection can compromise product safety, resulting in injuries, property damage, and significant legal consequences. According to the United States Consumer Product Safety Commission, around 400,000 new product injuries are reported each year, a number that has been steadily increasing [16]. This blog post explores how choosing cheaper materials can increase the risk of product liability and what manufacturers can do to protect themselves and consumers.

The Allure and the Risks of Cost Reduction

The pressure to reduce manufacturing costs is relentless. In a competitive market, even a small price difference can significantly impact sales volume. Opting for cheaper materials appears to be a straightforward solution. However, this decision is fraught with risks that extend far beyond the initial cost savings.

Compromised Safety: Cheaper materials often lack the durability and reliability of their higher-quality counterparts. This can lead to premature product failure, increasing the risk of accidents and injuries [14].
Increased Liability: When a product fails due to substandard materials and causes harm, the manufacturer can be held liable for damages. This can include medical expenses, lost wages, property damage, and even punitive damages [2, 5].
Reputational Damage: A product liability lawsuit can severely damage a company’s reputation, leading to a loss of customer trust and decreased sales [8, 7].
Legal and Financial Consequences: Defending against product liability claims can be expensive, even if the manufacturer ultimately prevails. Settlements and jury awards can reach millions of dollars, potentially bankrupting smaller companies [15, 19].

Understanding Product Liability

Product liability law holds manufacturers, distributors, and retailers responsible for ensuring that their products are safe for consumers [4, 18]. If a product has a defect that causes injury, the injured party can file a lawsuit to seek compensation. Product liability claims typically fall into one of three categories [1, 6, 12]:

Design Defects: These defects exist from the outset, meaning the product was inherently dangerous due to a flaw in its design [4, 6].
Manufacturing Defects: These defects occur during the manufacturing process, causing the product to deviate from its intended design [1, 6]. Substituting a cheaper fastener for a heavy-duty one is an example of a manufacturing defect [6].
Marketing Defects (Failure to Warn): These defects involve inadequate instructions or warnings about potential hazards associated with the product’s use [1, 6].

How Cheaper Materials Contribute to Product Liability

Choosing cheaper materials can increase the risk of all three types of product liability claims:

Design Defects: If a product is designed using substandard materials to cut costs, it may be inherently unsafe, leading to a design defect claim [6].
Manufacturing Defects: Substituting specified materials with cheaper alternatives during production can introduce defects and increase the risk of product failure [6, 17].
Marketing Defects: Manufacturers may fail to adequately warn consumers about the limitations and potential hazards of using products made with cheaper materials [6, 22].

Real-World Examples

Several high-profile product liability cases illustrate the dangers of cutting corners on material quality:

Ford Pinto: In the 1970s, Ford chose not to reinforce the Pinto’s fuel tank, despite knowing it could rupture in a rear-end collision. This decision, driven by cost considerations, resulted in numerous deaths and injuries and led to significant legal and financial repercussions for Ford [11, 18].
Takata Airbags: Takata used a cheaper propellant in its airbags, which caused them to explode upon deployment, sending metal fragments into vehicle occupants. This defect led to one of the largest automotive recalls in history and cost Takata billions of dollars in fines and settlements [11, 12].
General Motors Ignition Switches: GM knowingly produced cars with defective ignition switches that could shut off the engine while driving. This defect, stemming from cost-cutting measures, resulted in numerous deaths and injuries, leading to substantial lawsuits and settlements [6].
McDonald’s Hot Coffee: McDonald’s served coffee at dangerously high temperatures, leading to severe burns for a customer. The case highlighted the company’s failure to warn consumers about the risks and resulted in a significant jury award [11, 18].
Johnson & Johnson Talcum Powder: Johnson & Johnson faced lawsuits alleging that its talcum powder products contained asbestos, a known carcinogen. Plaintiffs claimed the company knew about the risk but failed to warn consumers, resulting in substantial damages awarded to victims [11, 18].

Proving Negligence

To win a product liability case based on negligence, the plaintiff must prove the following elements [1, 2, 3]:

Duty of Care: The manufacturer, distributor, or retailer had a legal obligation to ensure the product was safe for consumers [1, 2].
Breach of Duty: The defendant failed to meet the expected standard of care, such as by using cheaper, substandard materials [1, 2].
Causation: The breach of duty directly caused the plaintiff’s injury [1, 2].
Damages: The plaintiff suffered actual losses, such as medical expenses, lost wages, and pain and suffering [1, 2].

Best Practices for Manufacturers

Manufacturers can mitigate the risk of product liability lawsuits by implementing the following best practices:

Prioritize Safety: Make safety a top priority in product design and manufacturing. Never compromise safety for cost savings [11, 26].
Thorough Testing: Conduct rigorous testing of materials and products to ensure they meet safety and performance standards [2, 3].
Quality Control: Implement strict quality control measures throughout the manufacturing process to prevent defects [2, 17].
Transparency: Maintain open communication with suppliers and consumers about material choices and potential risks [9, 11].
Adequate Warnings: Provide clear and conspicuous warnings about potential hazards associated with product use [1, 22].
Insurance Coverage: Obtain adequate product liability insurance to cover potential claims [22, 12].
Legal Counsel: Consult with experienced product liability attorneys to ensure compliance with relevant laws and regulations [2, 12].
Monitor Product Safety: Continuously monitor the safety of products and address known defects immediately [11].
Avoid “Bad Facts”: Avoid decisions that indicate the manufacturer opted for a cheaper but less safe material [15].
Holistic Approach: When appropriate, take a holistic approach and show how the company has provided help for people and the community [15].

The Right to Repair

The “right to repair” movement advocates for laws that allow consumers and independent repair shops to fix their own devices and equipment [23]. This can help extend the lifespan of products and reduce waste. However, some argue that right-to-repair laws could incentivize companies to create cheaper, less durable products [23].

Conclusion

While the temptation to cut costs by using cheaper materials is strong, manufacturers must carefully weigh the potential risks and consequences. Compromising product safety can lead to devastating injuries, costly lawsuits, and irreparable damage to a company’s reputation. By prioritizing safety, implementing robust quality control measures, and maintaining transparency, manufacturers can protect themselves and consumers from the dangers of cutting corners.