AN OWNER'S GUIDE TO MAINTAINING, SERVICE AND REDUCE
THE OPERATING COST OF A FORKLIFT FLEET.
FORKLIFT LIABILITY
February 1, 1997 Modern Materials Handling
INDUSTRIAL TRUCK REPORT
An inside look at lift trucks and liability
Product liability lawsuits raise the costs of owning or leasing industrial trucks. Here's an exclusive report on
how claims translate into millions of dollars.
Les Gould, Editorial Associate
For manufacturers as well as users of materials handling equipment and systems
sold in the U.S., the costs generated by product liability claims have long been a significant part of the overall
expense of doing business. These costs are especially keenly felt by the makers of industrial trucks and, to a
lesser extent, by end users. Reason: Lift trucks, among all the types of materials handling equipment, tend to
be singled out most often in product liability cases in the courts of the U.S.
The "deep pocket"
syndrome is at work here. The reality is that even in cases of gross operator error, negligence, or carelessness,
there is a tendency to sue the party that appears to have the greatest financial resources-and that usually means
the truck's manufacturer. The fact that such a case may have little or no foundation does not necessarily deter
a plaintiff from a lawsuit alleging negligence.
The result for the end-users of lift trucks is, quite simply, a higher price for the trucks. Every U.S. lift truck
manufacturer individually spends millions of dollars each year to defend itself from product liability claims-both
legitimate and frivolous. That cost is born by manufacturers, distributors, and end-users.
The legal basis of liability
Surprisingly, there is no one single set of product liability laws in the U.S. Instead, the laws vary according
to which state a case is tried in, and even which court within that state.
Three liability theories form the basis for product liability in the U.S.: negligence, strict liability, and breach
of warranty. In general, liability for breach of warranty is limited to jurisdictions that do not recognize strict
liability. Strict liability and negligence are therefore the two most important theories.
Negligence involves actions or omissions that are inconsistent with a person's duty or standard of care. The question
of whether a particular action or omission is actually negligent is dependent upon the existence of a duty, and
the subsequent breaching of that duty.
What this means to the manufacturers of materials handling equipment is that they must use reasonable care in the
design and manufacture of their products. Failure to do so could result in a design defect or a manufacturing defect.
In addition, the manufacturer must also warn the equipment user of any dangers that might result from use or misuse
of the product.
The concept of negligence, then, is based on the reasonableness of a manufacturer's conduct. In the case of strict
liability, on the other hand, reasonableness doesn't matter. Strict liability is concerned only with whether a
product is defective and unreasonably dangerous.
Even though the manufacturer may have taken the greatest care in making the lift truck, a jury may still find that
it is defective and unreasonably dangerous. The manufacturer may then be liable for significant damages.
Impact on prices
For Steve Finney, president of the Industrial Truck Association (ITA) and president of the Hyster Company, the
long-term fallout of the product liability issue is a source of concern. "The product liability situation
as it exists today has some serious implications for the users of lift trucks and other types of materials handling
equipment," Finney explains. "Given the size of the awards that may be given to the plaintiff in a suit,
manufacturers may be understandably hesitant to invest in technological innovations that might be the subjects
of suits one day. Equipment manufacturers may also choose to not launch a new product on the U.S. market at all
for the same reason."
What is the actual impact on the end-user in dollars and cents? On average, product liability defense costs add
approximately 1.4% to 1.6% to the purchase price of every new lift truck sold in the U.S. today. However, because
industrial truck distributors must also contend with liability claims, the distributor will add an additional amount
to the price of the truck to cover distributor costs. For a typical "heart-of-the-line" counterbalanced
lift truck, the end-user will pay at least $400 extra due to the issue of product liability.
Mac S. Dunaway, who is the legal counsel to the ITA and an expert in the field, believes that internationally uniform
product design and safety standards may well be the best solution to the problem. "The development of a comprehensive,
universal safety standard for lift truck manufacturers not only will enable a lift truck manufacturer to produce
a uniform product for sale and use around the world," says Dunaway, "it will also strengthen a manufacturer's
position that conformance to the worldwide standard demonstrates the absence of negligence or of a manufacturing/design
defect."
Trade associations and standards-generating groups in Europe, the U.S., and Japan are already working together.
If they achieve a single comprehensive, universal design and safety standard, it will be the end-users of materials
handling equipment who will ultimately emerge as the winners.
And for the defense
Two of the more common defenses against product liability claims in the U.S. are contributory negligence and assumption
of risk.
Contributory negligence is used only to defend against claims of negligence-not strict liability (which involves
issues of whether a product is defective and unreasonably dangerous). In order to prove contributory negligence,
the manufacturer must show that it was the plaintiff's own negligence that lead to the accident or injuries.
An "assumption of risk"
defense may be used to defend an equipment manufacturer against claims that are based on strict liability. Here
the manufacturer must prove that the plaintiff knew and understood the risk of danger involved in certain actions,
but proceeded to go ahead with those actions anyway.
Another defense is a manufacturer's conformance to the relevant design and safety standards. In the case of industrial
trucks, the main U.S. standard is the ASME/ANSI B.56 Standard.
Modern Materials Handling- Feb 01, 1997
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