Product Liability Defence 2019 : Trends & Conclusions

The global product liability defence market continues to be a place of upheaval, as the legal market adapts to the challenges posed by technological advancement and increased scrutiny on pharmaceutical and medical device products. As the consolidation of firms continues apace, particularly in the US and the opioid epidemic, it is evident that the legal market is shifting with this dynamic market.

Litigation, funding and "judicial hellholes"

Litigation and trial proceedings are an intrinsic part of the product liability field, reflected by the strong showing of first-class trial lawyers in our research. In the US, the mechanics of conducting individual claims and mass torts are a frequent topic of discussion among lawyers.

Perhaps the most obvious example of this is the identification by practitioners of so-called “judicial hellholes”, a phrase coined by the American Tort Reform Foundation, as well as the practice of litigation tourism. This can be defined as exploitation of favourable jurisdictions by plaintiff lawyers who consolidate claims against defendants, commonly pharmaceutical or medical device-based companies. Practitioners link the favourability of these jurisdictions to judges, with one source stating that “it’s amazing to see what one judge can do” as they let cases “blow up against defendants”. Interviewees report that these “judicial hellholes” are leading to a run on certain jurisdictions and a greater willingness overall by plaintiffs to bring claims. Sources do note, however, that there is “definitely a high degree of pushback on this, with actions being lodged to get the state to look at the statutes and personal jurisdiction rules”.

Another factor fuelling litigation in the area is that of third-party funding. A common element in a variety of legal practice areas, product liability defence is not excepted from the trend with practitioners noting the interest by funders in these cases not solely within the US. One issue around litigation funding that is a common source of debate for lawyers is the issue of transparency and lack of information around the identity of funders. Sources comment: “The funders have really carved out a piece of the market but are not interested in anyone knowing who they are or how much they have invested in cases.” This is echoed by others, with one noting the particular intersection with cases arising out of the opioid epidemic and noting that there are improvements in the area, stating “the dust settled a bit after there were concerns around funders in opioid litigation”. With third-party funding unlikely to disappear anytime soon, it is evident that there will continue to be discussions around transparency surrounding this form of financing and a likelihood that there will be increased calls for ethically minded regulations in the area.

Smart product liability defence

An intrinsic element of product liability defence is founded on the representation of clients creating innovative products. As society becomes more technologically advanced so do the products, mirroring consumers’ increasingly complex demands. A key example of this is the internet of things (IoT) and the potential issues caused by the interconnectivity of consumers’ devices. “Smart” household products connected to the internet are increasingly common, offering consumers greater efficiency or versatility while relying on a sophisticated network of sensors to operate. Interviewees comment in relation to these complex operating systems that “should anything go wrong it is incredibly complicated to figure cause and effect and ultimately liability in those situations”.

Another issue linked to the technological advancements in consumer products is the overlap between product liability and cybersecurity. A product linked to the internet is susceptible to hacking and concerns around privacy and product safety are common in this area. One practitioner highlights these concerns noting that lawyers are “increasingly advising clients in their design phase, before any litigation proceeding - mitigating risk is crucial”.

Lawyers are also focusing on the future of biomedical products and the technological advancements possible in that industry such as precision medicine. The potential of such developments is undoubtedly significant, but sources have particularly highlighted the risks of the inability to conduct clinical trials or categorising people according to their genetic makeup. There is also issue of insurance and the importance of being able to establish responsibility when looking at these sophisticated technological possibilities. What is clear is that the technology at play in the area is fast-developing and complex, with clear implications for the future of the product liability space. 

Confronting competition perceptions

Competition in the market continues to be strong but several key trends are noticeable. Primarily, the market perception remains that consolidation among firms persists, as one source states, “It used to be that a regional or local firm would have a national presence but now manufacturers of a recognisable product will not entrust any proceedings to a local firm.” Fuelling this is the mass tort and cross-jurisdiction nature of claims that often require a multinational or multi-state presence of firms.

However, a variety of practitioners disputed this as the set future for legal competition in the area. One source contends that “these international conglomerate firms will have an undisputed competitive edge but there is an intense pressure to bring prices down”. Others support this, with one lawyer noting, “the client said he would rather meet his numbers for his budget and hire a B- lawyer than hire an A+ lawyer at their rates and win the case”. An obvious influence on this mindset is linked to the size and sensitivity of the case at hand, but it nevertheless demonstrates a shift in thinking by clients.

As a result of this pressure on pricing, one source contends that “the big firms offer a lot in terms of services, while it is actually the mid-tier firms that are under the most pressure”. At the other end of the spectrum, the “boutiques have the advantage of being more specialised with better prices, but they sacrifice the level of services offered”. Ultimately, it is evident that large firms dominate the global product liability market, but it may be too simplistic to note a simple consolidation of firms as driving the level of competition.

Conclusion

The trends developing in the market are a testament to the technologically and legally complex nature of the field. Generally, sources note that the persistence of funding, innovations in product manufacturing and major pharmaceutical mass torts are drivers to their work. All these legal and non-legal factors have implications in the space and practitioners generally note the necessity of maintaining a forward-thinking approach to the practice.

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