FEATURE
WHY ROUTINE PRODUCT CLAIMS ARE ESCALATING
The legal climate around product liability has shifted from occasional disputes to a steady drumbeat of claims and class actions in many sectors. Plaintiffs’ attorneys are leveraging sophisticated tactics, including coordinated media outreach, class action strategies, and efforts to expand liability theories regarding warnings, labeling, and marketing practices. At the same time, regulators and consumer advocates are paying closer attention to product safety, recalls, and disclosure, which can lead to followon litigation even when actual harm is limited.
For manufacturers, this means that an incident that might once have been resolved with a straightforward customer service response or a small settlement can now turn into a complex, multi-party lawsuit. Claims may involve allegations of design defects, manufacturing defects, or inadequate warnings and can involve suppliers, distributors, and retailers across the supply chain. Understanding these trends is the first step in building a strategy to reduce risk.
HOW LITIGATION FUNDING IS CHANGING THE GAME
One of the most important and less visible drivers of escalating product liability costs is the rise of litigation funding. Third-party funders provide capital to plaintiffs or law firms in exchange for a share of any eventual recovery, making it easier to pursue lengthy, complex cases that might previously have settled quickly.
With outside financing, plaintiffs may feel less urgency to accept early offers, and cases can remain active for years, increasing defense costs and driving up the ultimate settlement number. For defendants, this often means more discovery, more expert work, and more pressure to manage reputational risk along the way.
BUILDING PROACTIVE DEFENSES BEFORE A CLAIM
Rising“ nuclear verdicts” and increased oversight have made reactive approaches insufficient. Manufacturers now need proactive measures built into their procedures, contracts, and documentation long before any incident occurs. Here are three critical areas where even modest adjustments can lead to meaningful improvements in risk control:
• Strong documentation: Clear design records, testing protocols, quality control logs, and complaint tracking can all become crucial evidence when a product is challenged. Consistent documentation helps demonstrate that you followed reasonable processes and can directly support your defense.
• Contractual risk transfer: Well-crafted contracts with suppliers, distributors, and other partners can allocate risk, require appropriate insurance, and clarify defense and indemnity obligations. Regularly reviewing and updating these agreements can help prevent disputes over who should bear specific losses when a claim arises.
• Supplier oversight: As supply chains become more complex, courts and regulators increasingly expect manufacturers to know how components are sourced, tested, and documented. Practical steps such as supplier audits, standardized quality requirements, and clear communication protocols can reduce the risk that a weakness elsewhere in the chain becomes your problem.
Each of these measures helps shift your position from vulnerable to prepared, making it easier to defend your products and potentially resolve claims more efficiently.
PREPARING YOUR INTERNAL TEAMS FOR LITIGATION PRESSURE
Even the strongest company can feel the strain when a serious claim hits. Engineers, quality managers, sales leaders, and executives may all be drawn into the process, from document collection and depositions to trial preparation. Without guidance, this can be stressful and disruptive. It is important to do the following:
• Train key employees on how to respond when an incident or claim is reported
• Establish internal protocols for preserving documents and coordinating communications
• Help managers and subject matter experts understand what to expect in depositions or trial testimony
• Support teams emotionally and professionally throughout a long legal process
With preparation and clear roles, your people can respond calmly and consistently, which supports both your legal defense and your company culture.
JOIN US TO STRENGTHEN YOUR RISK STRATEGY
Litigation risk cannot be eliminated, but it can be managed. By understanding the forces driving larger, more complex product liability claims and implementing proactive defenses, manufacturers can better protect their operations, reputation, and long-term profitability. +
NesbitAgencies. com • 5