It isn’t until a business finds itself in the unfortunate position of having to conduct a product recall that the realisation dawns what a complicated, stressful, brand damaging and costly exercise it can be. Over the last couple of decades the newspapers have regularly reported high profile and damaging stories regarding recalls which have had to be made by some of the largest global businesses.
The reality is that, damaging though they can be, product recalls are much more common than is realised. Notwithstanding the modern quality control standards, products can still present risks and in order to ensure “the high degree of consumer protection” on which the legislation is premised, such products must be recalled.
If you were to spend any time on the VOSA, MHRA, or Trading Standards websites, you would find many thousands of recalls, this year alone, which have never achieved any press profile. And yet for many the words “product recall” cause an involuntary shudder. For others product recalls are part and parcel of doing business and, because they are familiar and planned for, are dealt with as part of routine business, and not an exceptional dramatic event.
The situation has been reached where any manufacturing business ought to be planning for a product recall in advance, so that should such an unplanned event take place, the process to be followed is not unfamiliar.
The EC Guidance (Guidelines to Businesses to Manage Product Recalls and Other Corrective Actions) places great emphasis on the development of proper recall policies as part of a business’s compliance with its legislative duties: to retain relevant information about products and product components, to have such information available to regulatory authorities and to ensure traceability of products. It also provides excellent guidance on risk assessment and a structured decision making process for a recall itself.
Surprisingly our experience shows that until a business has to recall a product, little thought or planning has been given to such an eventuality. In some cases this has inevitably led to a less than impressive response, made decision making and effective action harder and slower, and led to a lack of confidence on the part of the regulator in the business, increasing scrutiny.
The decision to make a product recall can often be difficult, particularly where there is considerable financial pressure. In practice, however, the decision to recall should not be difficult if using the EC Guidance to aid proper risk assessment and decision making.
Our experience shows that one aid to good decision making and putting any financial pressure in a proper context, is an understanding that the General Product Safety Regulations provide for personal liability and potential imprisonment of the decision maker(s):
“Where a body corporate is guilty of an offence under these Regulations in respect of any act or default which is shown to have been committed with the consent or connivance of, or to be attributable to any neglect on the part of, any director, manager, secretary or other similar officer of the body corporate or any person who was purporting to act in any such capacity he, as well as the body corporate, shall be guilty of that offence and shall be liable to be proceeded against and punished accordingly.”
Throw into the mix the potential for Corporate Manslaughter or Gross Negligence Manslaughter charges and the need for caution is obvious.
Often what is overlooked pre and post recall are those aspects which are in some ways peripheral to the decision making and execution of the recall itself but actually essential:
- The notification of and relationship with the regulator.
- The potential supply chain implications and contractual liabilities/matrix.
- Replacement of suppliers at short notice to service existing commitments.
- Whether an independent expert needs instructing.
- Capturing the time spent on the recall and ancillary costs for claims purposes.
- Whether insurance is available and notification of insurers.
- A press plan and PR/Customer Services support plan.
- Business continuity – everyone loves a drama, but who runs the business?
- Properly evidencing the decision making process in case of challenge.
- Dealing with any claims by the consumer.
With proper planning, a business can give itself every chance of conducting a calm and effective recall and minimise the business risks as well as ensuring proper legal compliance. Whether it’s the policies and planning, training, dealing with the regulator, or assisting with the potentially difficult decision to recall and the civil claims which follow, our experienced Litigation and Regulatory team is here to help.