Product Liability Verdicts on the Rise: How Manufacturers Can Avoid Costly Lawsuits

The manufacturing industry is facing a growing threat: escalating product liability verdicts. In 2024 alone, product liability cases accounted for an astonishing $13.7 billion in verdicts. This surge in “nuclear verdicts”—those exceeding $10 million—demands that manufacturers prioritize product safety and implement robust risk management strategies to protect their bottom line and brand reputation.

Understanding the Rising Tide of Product Liability

Product liability lawsuits hold manufacturers, distributors, and sellers accountable for injuries caused by defective or dangerous products. These cases have been on a consistent upward trajectory, reflecting a growing awareness among consumers of their legal rights and a judicial system that continues to refine liability laws associated with defective or dangerous products. According to the most recent data from 2022, approximately 5,830 product liability cases were filed in the U.S., signaling heightened consumer awareness and evolving regulatory standards.

Several factors contribute to this concerning trend:

Increased Consumer Awareness: Consumers are more informed about their rights and are more likely to take legal action when injured by a defective product.
Aggressive Plaintiff Attorneys: Plaintiff lawyers are becoming increasingly sophisticated in their strategies, leveraging social, regulatory, and legal environments to maximize damages.
Litigation Funding: Third-party litigation funding is contributing to more and increasingly costly lawsuits, turning the tort system into a massive investment mechanism.
Shifting Jury Demographics: Millennial jurors tend to be more pro-plaintiff than prior generations, potentially leading to larger verdicts.

Types of Product Liability Claims

Product liability claims typically fall into three categories:

Manufacturing Defects: These occur when something goes wrong during the production process, making the product dangerous even though the original design was safe. Examples include subpar materials, contamination, or errors on the assembly line. Manufacturing defects are the most frequent cause of product liability claims.
Design Defects: These are inherent flaws in a product’s design that make it dangerous when used as intended. A design defect impacts the entire product line, not just a specific unit.
Marketing Defects (Failure to Warn): These involve insufficient instructions, warnings, or labels to inform consumers of potential risks associated with foreseeable use. Inadequate risk warnings, insufficient instructions for safe use, or misrepresentation of a product can all contribute to the potential for injury.

A fourth cause of action, slightly different from the first three, may also support a claim. If one of the following common causes of product liability in San Diego led to your recent injury, a product liability attorney from our team could guide you through the claims process and help you pursue the compensation you may be entitled to receive.

The High Cost of Non-Compliance

The financial consequences of product liability lawsuits can be devastating. In 2024, product liability cases accounted for an astonishing $13.7 billion in verdicts, making it the single most significant factor behind nuclear lawsuits. The median nuclear verdict in 2024 was $51 million, more than double what it was just four years ago.

Beyond monetary damages, manufacturers also face:

Reputational Damage: Negative publicity from a product liability lawsuit can erode consumer trust and damage brand reputation.
Legal Fees: Defending against a product liability claim can be incredibly expensive, requiring legal teams, expert consultants, and extensive discovery processes.
Lost Productivity: Employees must dedicate time and resources to address the lawsuit, disrupting normal business operations.
Increased Insurance Premiums: A product liability claim can lead to higher insurance premiums, further impacting the bottom line.

Proactive Strategies to Avoid Costly Lawsuits

Manufacturers can take several proactive steps to mitigate product liability risks and avoid costly lawsuits:

Implement Robust Quality Control Measures: Quality control is the cornerstone of risk mitigation. This includes rigorous testing of products for safety and performance, regular audits of manufacturing processes, and thorough documentation of quality assurance activities. Adhering to internationally recognized standards such as ISO 9001 for quality management systems demonstrates a manufacturer’s commitment to quality.
Prioritize Product Safety in Design and Development: Design products that are reasonably safe during foreseeable use, unforeseeable use, service, and maintenance. This involves using proper materials, complying with safety and industry standards, and providing adequate warnings.
Provide Clear and Comprehensive Warnings and Instructions: Clear warning labels must explicitly communicate potential hazards, while comprehensive user manuals provide detailed guidance on safe operation and maintenance. Together, these elements ensure users are properly informed, reducing the likelihood of misuse and associated claims.
Maintain Transparent Communication with Suppliers and Partners: Establish clear communication channels with suppliers and partners to ensure timely information exchange. Regular updates to contract terms further align expectations and responsibilities, minimizing ambiguity.
Establish a Product Liability Prevention Program: Such a program can help organizations take a top-down approach to product safety, reduce accidents, and prevent product recalls. Key areas of focus can include management coordination and control, risk transfer, design and product development, manufacturing and quality control, sales and marketing, vendor management, record retention, and recall planning.
Implement a System for Monitoring Consumer Complaints and Reports: Setting up processes to monitor consumer complaints and reports of adverse events can help identify potential issues before they become larger problems. Investigate quickly and consistently, and follow established processes for remedying any substantiated concerns.
Secure Adequate Product Liability Insurance: Invest in comprehensive product liability insurance to protect against potential financial losses. An insurance policy tailored to the specific needs and risks of the business can provide a critical safety net in the event of litigation.
Stay Informed About Changes in Product Safety Standards and Regulations: Manufacturers need to stay informed about changes in product safety standards and regulations to ensure ongoing compliance.

Defenses Against Product Liability Claims

Even with the best preventative measures, manufacturers may still face product liability claims. Several defenses can be raised in these cases:

Misuse: A manufacturer is only responsible for making a product safe for predictable use. If someone is injured using it for a purpose or in a manner not intended, the manufacturer may argue that they could not have reasonably foreseen that specific situation and cannot be held liable for the injury that resulted.
Assumption of Risk: This defense argues that a reasonable person would know the product in question could cause an injury through normal or abnormal use.
Lack of Causation: Defendants may argue that the product design or defect wasn’t the cause of the plaintiff’s injury, citing other factors as the primary cause, making the injury unpredictable and unpreventable by design or warning.
Statute of Limitations: The expiration of the statute of limitations for personal injury claims serves as a defense across all types of product liability actions, requiring plaintiffs to file lawsuits within a specified time frame.

The Bottom Line

Product liability verdicts are on the rise, posing a significant threat to manufacturers. By prioritizing product safety, implementing robust risk management strategies, and staying informed about the latest legal developments, manufacturers can protect themselves from costly lawsuits and maintain consumer trust.