Research Trends & Conclusions: Product Liability Defence 2011

In a time when many areas of legal work have slowed to a standstill, product liability defence experts are continuing to find their services much in demand. Heightened regulatory requirements are increasing the need for counselling and compliance work, while new laws and the ever expanding globalisation of business are seeing issues playing out across more countries than ever before. The qualities exhibited by the area’s leading practitioners, listed in the following pages, are developing and broadening in the face of the evolving requirements of their clients.

GLOBAL PROFILE

This edition is the largest to date, with more lawyers identified as experts in the field than ever before. We pick out practitioners from 36 countries, seven more than the 2005 edition, as the increasing amount of work makes greater levels of specialisation possible, and this expertise is recognised by the market and relayed to our researchers. As the graph above demonstrates, the United States continues to be home to over half of the practitioners selected for inclusion, reflecting the sophistication of the US plaintiffs bar and the country’s continuing pre-eminence in activity levels and consequent sophistication of product liability defence. As the graph illustrates, while the US continues to provide a steady proportion of the world’s leading lawyers, an ever increasing number of specialists from other countries are also gaining recognition. We have observed a particular growth in Latin America in this respect, with lawyers from Colombia, Costa Rica, Honduras, Uruguay, Chile, Brazil, Guatemala and Argentina all added to our books since 2007.

There is also an inevitable correlation between countries with provisions for class actions and consequent size and depth of the defence bar. This is particularly evident in Canada, described as “even more friendly than the US” to potential suits. Certain provinces were singled out in this respect – “if someone sneezes in the US there is a copycat in Ontario almost immediately” in the words of one source – and the threshold for certification was cited as materially lower in Canada than the US. The country as a whole consistently registers one of largest contingents in the book, and has risen 36 per cent in total since the 2009 edition.

Looking ahead, there is the anticipation of further expertise emerging from countries such as China, as local regulatory regimes come into force. In some cases the laws have been based on existing regimes in other countries, bringing foreign legal concepts into play in new jurisdictions and potentially opening the way for international law firms to gain a foothold in burgeoning Asian markets.

Analysis of the leading firms across our last five editions reveals several firms which have performed strongly in recent years. It was suggested to researchers that the market is developing along the lines of firms with a track record in this area looking to build up their practices – Shook Hardy; Reed Smith; and Hogan Lovells have all increased their presence in these pages in recent years – and that there has not necessarily been an influx of new firms practising in this sector. This would appear to be born out by our figures, which show a decrease in the number of firms in this edition even as the overall number of featured lawyers and countries increase.

In the course of the research, the single most cited development observed by private practitioners was a marked increase of desire from their clients for unified, multinational legal support. It is becoming rare to find companies whose products are only sold in a single country, and the rise of the internet has meant that local problems can quickly become international issues. With new laws coming into force around the world and cases being brought across multiple jurisdictions, it becomes imperative for the defence to take legally and financially consistent positions in order to win on a global case. In the hypothetical example of one interviewee, a lawyer could win a case with an argument that convinces the local court, but that same argument could prove fatal to the other 30 cases the client is facing worldwide. The plaintiffs bar is also becoming more organised and international in scope, further driving the demand for a unified multinational defence strategy. Defence experts spoke of the need to “send out a message” early in the development of the market in new jurisdictions, so clients are not perceived as “an easy payday”. As such, if a product is not defective then even though settling the case would make sense economically, it could lead to further cases down the line. This dynamic is driving increased levels of litigation in emerging jurisdictions. Experts predict further “internationalisation” of product liability work, and this can already be observed in the presence of the leading market players: Shook Hardy; Freshfields; Reed Smith; and Hogan Lovells in particular have all gained a presence in additional jurisdictions in the course of our recent editions.

AREAS OF ACTIVITY

Recent years have also seen a change in industries whose products have been the source of such claims. Cases relating to tobacco and asbestos – which once drove huge levels of work – have fallen away and improvements in technology were cited for a drop off in aviation related claims – the last major air crash in the US was nearly 10 years ago.

The above graph illustrates the number of lawyers in our product liability books over the last three editions that have also been recognised as expert in our aviation and life sciences publications for their products-related expertise. As the number of aviation specialists has decreased, so the proportion of lawyers defending cases relating to pharmaceutical products and medical devices has grown. While consolidation in the market – such as Pfizer’s acquisition of Wyeth - is limiting the number of potential clients and hence levels of work to a certain extent, this industry was by some distance the single most regularly cited source of work for the nominees in this edition.

Looking to the future, a range of industries were suggested as fertile ground. In the US, consumer fraud class actions were repeatedly mentioned as an area of potential growth, as was nanotechnology. Furthermore, in many countries lawyers are seeing the regulatory side of their practice growing as new product safety statutes are brought in, increasing the scope of products under regulation and an increase in investigation and enforcement powers for the authorities. This is expected to result in a larger number of product recalls as companies err on the side of caution in the face of newly empowered regulators. This in turn will drive further work, as in the words of one source “class action lawsuits follow recalls as night follows day”. In addition, climate change is also expected to be the source of significant future work, indeed this may have already begun: the number of product liability lawyers in this book who are also recognised in our environment research has doubled in each edition since 2007.

Overall, this is an area of expertise that is expanding, both in terms of total amount of work and in the range of countries in which this work is required. The innovation and dedication of the plaintiffs bar continues to keep demand for defence counsel high, and the increase in local regulation and new laws around the world mean this trend is likely to continue in the years to come.