Recently, we have explored the roles different business departments play in product recall management, from accounting to customer service. The legal department (or legal counsel), however, perhaps plays the biggest role. A legal team navigates ever-evolving legislation that pertains to product recall management and finding alternative resolutions to product liability lawsuits, court action, and civil/criminal penalties.
In the latest part of our blog series, we take a deep dive into the functions of the legal department for product recall management.
What Does the Legal Department Do in Product Recall Management?
There are many legal components of product recall management. When the government issues a recall notice because a product, ingredient, or component is faulty or potentially dangerous, organizations must act quickly. Otherwise, they could face legal consequences. These consequences include penalties and criminal sanctions.
Various federal government agencies administer and manage product recall notices, eliminating all kinds of potential threats. However, the three biggest agencies are:
- Food and Drug Administration (FDA)
- Consumer Product Safety Commission (CPSC)
- National Highway Traffic Safety Administration (NHTSA)
Generally, the FDA and CPSC are responsible for product recall notices in the food and beverage, prescription drug, medical device, and consumer product sectors. The NHTSA is responsible for recall notices that concern the automobile sector, such as faulty vehicle parts.
When an organization receives a recall notice from one of these three agencies (or another government agency), they work with their legal counsel and establish best practices for dealing with the threat. The severity of the notice will typically influence the steps the organization takes next.
Why is the Legal Department So Important in the Recall Management Process?
Failing to respond to recall notices poses all kinds of problems for organizations. The FFDCA and CPSA, for example, issue civil and criminal penalties for product recall violations, which could cost organizations hundreds of thousands of dollars.
It’s up to the legal department to minimize any potential litigation from recall violations, such as slow recall response rates. Legal teams, which comprise attorneys and paralegals, also deter civil action from other organizations and customers because of failures in the product recall management process.
Legal teams ensure organizations adhere to relevant product safety legislation at the federal and state levels. This legislation includes the Consumer Product Safety Act and National Traffic and Motor Vehicle Safety Act (for organizations in the automobile sector), as well as any local laws. As you can see, the legal department has various roles and responsibilities that prevent organizations from getting into legal trouble.
What Challenges Does a Legal Counsel Face?
Legal departments face all kinds of challenges with product recall management. This is because product safety laws are complex and ever-changing. A legal counsel also has to make sure other departments are adhering to relevant product safety laws, which can be difficult.
Many product liability lawsuits arise because organizations are slow to respond to product recall notices. When an organization receives a notice, time is of the essence. (Faulty or dangerous materials, for example, can put millions of people at risk.) Legal teams step in when other departments are taking too long to respond to notices. Otherwise, the entire organization could face an expensive lawsuit (or penalties from the government.)
Part of the problem is the technology organizations use to share information about recall notices. Outdated technology makes it difficult to improve recall responses, while too many programs complicate the recall management process.
Organizations that use a product recall management system solve these problems.
What is a Product Recall Readiness and Mock Reall Planning?
Manufacturers and retailers have to respond to a product recall, and it’s critical that companies have a proper recall management strategy in place. Implementing this kind of strategy is tougher than it sounds.
If you are in one of the following industries, it is imperative that you prepare your business and team members for a product recall.
- Medical Devices
- Pharmaceuticals
- Food & Beverage
- Cosmetics
- Manufacturing
Product recalls impact all departments within an organization, but those working in supply and distribution will feel the effects more than most. The truth is, recalls influence every aspect of a supply chain, from sourcing materials and ingredients to distributing products to retailers and customers.All departments are affected by product recalls. Below are just a few examples of how some can be impacted by a product recall.
Meet Mock Recalls
MockRecalls is a mock recall training and consulting program to test your recall readiness. We are purely focused on protecting your product investment by working with you to create a new recall plan or analyze your current recall plan and then put it through a mock recall or recall simulation test to insure you are prepared for a possible product recall.
Final Word
Legal departments prevent product liability cases from ending up in court and protect organizations from expensive government penalties. A legal counsel performs an ever-important role in the recall management process.
Looking to test your product recall readiness with your legal department? MockRecalls will help create and/or test your recall program. Click here to learn more or call us!
Learn more about each department’s role during a product recall