Tuesday, March 01, 2005

Do you know who you're selling to, sure about that?

I can remember, before the internet was invented hearing someone who made inflatable boats dismiss the threat of product liability legislation in Europe with the line: ‘we sell them in California, we’re not worried.’

I’d like to think his attitude was because the company could trace each of its boats from the factory to the beach to, if the worst came to the worst, the iceberg. The company doubtless had stringent quality assurance procedures in place, accepted raw materials with the binding assurance they met equally stringent quality assurance standards. Most importantly of all, I hope it had a team of lawyers about the same size at the workforce it used to make the boats. The lawyers probably dreamed of becoming a profit centre rather than a cost centre.

One thing which was not explained at the time, and in my naivety I didn’t appreciate, is that lawyers were capable of suing along the supply chain, back to the firms that supplied their company and so on.

I came across this story on CNI the other day, which, while the situation it describes effectively sidesteps most of these problems, potentially opens up a whole new series of areas for enterprising lawyers.

It is refreshing to hear an admission of incompetence from a government official, so refreshing I’ll repeat it:

‘it is hard for the customs officials to keep track of all the cargoes coming into the country.

According to the story the Philippine government is also scrapping its bonded warehouse system because, to quote the same unnamed official in the report,

‘Most of the smuggled shipments go into these warehouses.’ Alice in Wonderland .

The people who encourage such trade by buying this polymer could be giving themselves a big problem. The liability buck would stop with them, even if the polymer that they had bought was defective. It would be a brave man who’d ask Long John Silver for a refund.

It also raises questions about what responsibility chemicals companies have for their products once they have been sold. Environmental and toxicological responsibility survives the sale, I believe.

Given the large number of ambulance-chasing lawyers who’ll be looking for other things to do in Sate courts in the US, now that Class Actions will be heard in Federal courts only, it can only be a matter of time before one of them looks at this issue, finds someone who’s got a case and gives it a pop.

Do you know what your product managers or colleagues are doing? Are you sure? Do you have anti-laundering processes in place that enable you to ensure you are not selling your product to the underworld either directly or indirectly?

Perhaps you 'd like to let the rest of us know. Please feel free to comment.

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