Responsibility for a product defect that results in injury lies with all the sellers of the product within the distribution chain. Generally, given regulations that manufacturers must comply with, a product is expected to meet the ordinary expectations of the consumer. When a product does not meet these expectations, manufacturers and sellers are vulnerable to legal action from consumers.

A product can be found liable by contract breach or by law. Where the issue of product liability cannot be answered by the contract or the governing laws, private international law must be deferred to in order to fill in the gaps.

Product liability tort covers lawsuits to settle claims of injury or dispute due to negligence or strict liability on the part of the manufacturer or those responsible for the product in question.

As a result, product liability standards have steadily increased in most parts of the world including Europe, Asia and North America.

As with other aspects of both public and private international law, there is a need to govern or harmonize disparate national laws and proceedings more uniformly with respect to product liability.

This includes evidentiary standards, uniform reward of damages and punitive actions.

Many governments have passed legislation to limit the occurrence of product liability. The following examples provide a brief description of some of the legislative measures implemented by various governments around the world.

1. U.S.

Most product liability laws are enacted at the state level and while they vary from state to state with regard to standards of proof, since the 1960s most are based on strict liability as opposed to proving the manufacturer’s negligence.

Under the theory of strict liability, the manufacturer, regardless of whether or not they caused the defect, is liable for a defective product and must pay or compensate the injured parties. There is no manufacturer liability cap to date.

2. EU

As of 1977, the EU also began to move toward the theory of strict liability to reinforce its commitment to a common market where all members have common laws. The 1981 preamble to the Treaty of the European Union states, “liability without fault on the part of the producer is the sole means of adequately solving the problem, peculiar to our age of increasing technicality, of a fair apportionment of the risks inherent in modern technological production”.

Recent EU Court of Justice rulings regarding risk in the absence of proof of physical injury with regards to cardiac pacemakers and defibrillators that belong to a defective series will impact product liability proceedings moving forward.

Signed in 1985 and implemented in 1988, the Product Liability Directive holds producers and manufacturers responsible for damages caused by product defects.

The legislation only applies to products put on the market from the time the directive was enacted. The Directive provides a 10 year statute, and caps manufacturer compensation (per defect) at EUR 70 million.

3. Australia

Replacing the common law principles of tort that had governed compensation due to loss or injury from product defects, Australia’s product liability law enacted in 1992, closely resembles the EU directive of strict liability.

There is a 20-year statute of limitation in the Australian law as well as directives for representative action to be taken by the Trade Practices Commission on behalf of consumers.

Interested in a broader look at the topic that also includes service development? Then the FITTskills Products & Services for a Global Market course is for you!

4. Taiwan

In 1994, Taiwan imposed a strict liability law to replace the existing negligence-based laws that required injured parties to prove the manufacturer was at fault or negligent.

5. Japan

Going into effect January 1, 1995, Japan’s Product Liability Law holds a manufacturer (which also includes the processor and importer) responsible for property damage or personal injury caused by a defect (here, defect means a lack of safety a product should normally provide) in a product.

Instead of strict liability, Japan’s legislation provides manufacturers with a defence on the grounds of not knowing about the defect when the product was sold. Japan also puts a claim limit of 3 years from the time of injury for injured parties to seek compensation. Similarly, manufacturers cannot be held responsible if it has been more than ten years since the product was delivered.

6. China

Quality legislation enacted in China’s 1993 Product Quality Control Law holds manufacturers, producers and importers responsible to uphold national and international standards for products and their packaging, and to see that unreasonable danger is not posed to people or property. If found liable, manufacturers are responsible for damages or injuries to people and property.

Like Japanese laws, China’s claims have time limitations and are defensible if the manufacturer did not put the product on the market, did not know about the defect at the time due to scientific or technical limitations or the defect was not present when the product was put on the market.

A major amendment of the Law on Protection of Consumer Rights and Interests entered into effect in March 2014—the first major development in the product liability regime since the implementation of the Law in 1994.

The Law puts in place new consumer-friendly provisions, reversing the burden on the consumer to prove non-conformity with quality warranties where such non-conformity is discovered within six months of receipt of the goods or services and conferring a right of return within seven days of consumers buying goods at a distance.

7. Hong Kong

The only product safety law in Hong Kong is the Toys and Children’s Product Safety Ordinance (1993), which states that reasonable safety is required for all toys manufactured, imported or supplied.

Manufacturers, importers and suppliers must ensure that general safety requirements are met according to one of a number of international toy standards (for example, the International Committee of Toy Industries’ Voluntary Toy Safety Standard).

While defensible, if found liable, enforcement and penalties start at a HKD 100,000 fine and a year in prison and grow with each subsequent offence.

The post 7 examples of how product liability laws change from country to country appeared first on Trade Ready.

The first three articles published in this series provided information on where to review U.S. opportunities, who the key players are, the rules of the road, and how to register to do business with the U.S. Government.

Now it’s time to focus on that flipside that opportunity so often presents – the challenges!

There are many obstacles and delays that can impact a contract award before it happens, or even after it happens! All of these barriers must be overcome to succeed.

The dreaded bid appeal

A scenario that I’ve seen happen to Canadian companies is the following:

You are jumping up and down because it has been announced that your company has been awarded a U.S. Government contract. A few days later you get the bad news that the award is being appealed by a competitor. What do you do?

You should fight it by hiring a U.S. lawyer who is experienced in this type of case. If you don’t know any, call the Trade Commissioner Service at the Canadian Embassy in Washington and ask them to connect you to a few lawyers who specialize in these appeals.

Once connected, you can discuss your situation with them and settle on the right lawyer for you, based on experience and price.

The Government Accountability Office (GAO) is an independent agency that works for the U.S. Congress. It has various functions, one of which is to adjudicate bid protests. If you search for “Canada” on the “Bid Protest Decisions” search engine, you will find Canadian companies that have gone through the bid protest experience.

The main hurdles you could face

Some of the obstacles that you may discover very quickly in attempting to win a U.S. government contract are:

1. The Buy American Act of 1933; (See Buy American and Defense Contracts)
2. Small Business Set-Asides, Small Business Act of 1953;
3. Buy America Act – Transit (not the same as Item 1.);
4. Buy America Act – Highways;
5. Buy American -Airports;
6. DFARS Part 225; and
7. DFARS Part 225.7002 Berry Amendment.

It is extremely important to understand the comprehensive list of barriers and helpful hints to address them, whenever possible, by using the resources of the Canadian Trade Commissioner Service.

Once at the site, note the “Other Key Information” box on the right hand side of the page. It is suggested that you review all the information contained under the specific headings. Actually, the whole page contains a wealth of important information you need to know.

Getting the help you need

Both buyers and sellers need help! The challenge is in connecting the right two organizations, so they can help each other. There are always obstacles or constant challenges, some big and some small, that must be overcome to succeed.

Regardless of where your company is located in Canada, help is available to you. Companies need opportunities, and financing and good networking will eventually get you the first two.

In Canada, we are fortunate to have local, regional and national associations in most industries, especially in the aerospace and defence fields. A list of some of these organizations is available on the Innovation, Science and Economic Development Canada web site. Also see WCDIA.

All of the associations have experience in dealing with the same obstacles you might be facing today; networking is key to getting help. Most likely, someone or some company has already experienced the same challenge you are now facing.

Canadian Trade Commissioners are your friends

Help is always available from the Canadian TCS. If you don’t know whom to contact first, try the Defence and Trade Sections at the Canadian Embassy in Washington.

They have direct contact with key DoD players who are always willing to listen and help if they can. A call from the Pentagon to a U.S. unit or base can certainly help to open doors for Canadian companies.

If you see an opportunity on FBO.gov, but the bid package is classified, it may be releasable to Canada.

Contact the Industrial Security Directorate to see how they can request it if you have the appropriate level of security clearance. Also, don’t be afraid to contact the Canadian manager at the Joint Certification Office if you are trying to visit a U.S. base and running into difficulty.

Remember, experience says that in dealing with U.S. Government organizations, if they want what you have, they will find a way to buy it!

Further Reading

Some interesting web sites that may be beneficial are:

1. General Services Administration (GSA schedules-another need to know-maybe)
2. Navy League of the United States (Large trade show)
3. Association of the United States Army (Large trade show)
4. U.S. Commercial Service Canada (Offices in Canada)
5. export.gov  (List of Canadian events U.S. companies are attending in Canada)

The post Overcoming the biggest hurdles in gaining export contracts with the U.S. Government appeared first on Trade Ready.

Newly elected Prime Minister Justin Trudeau made a litany of campaign promises to Canadian voters over the course of his election campaign, one of them being to improve relations with Canada’s southern neighbor.

Relations between Canada and the U.S. had grown testy under the outgoing Harper regime, largely due to differences in opinion over the XL Keystone pipeline.

Harper was insistent on the project, going so far as to call it a ‘no-brainer,’ while U.S. President Barack Obama was lukewarm on the project, before officially rejecting the project in early November.

But now that Trudeau has assumed his new role, he will first have to contend with a long-burning trade issue between the two countries: that of softwood lumber.

Softwood lumber trade put a sliver in US-Canada relations

Disputes over the softwood lumber trade – which applies to wood originating from conifers, about 80% of the global lumber industry – have plagued bilateral relations between the two states since the 1980s, and have most recently been addressed by the 2006 agreement.

Under this agreement, which was scheduled to expire in 2012 until being extended for another two years, the U.S. agreed to lift antidumping duties so long as lumber prices remained above a certain level.

Canada was responsible for enforcing lumber restrictions, while provincial governments were expected to make reforms to remove any form of subsidies on the good.

The 2006 agreement expired Oct. 12.

Reuters reported,

A Canadian group representing the industry is calling for a simple extension of the 2006 deal, while U.S. industry representatives are calling for changes to the agreement.

“The 2006 agreement is now outdated,” Reuters quoted U.S. Lumber Coalition chairman Charlie Thomas on Oct. 26.

“If Canada continues to stay away from the negotiating table, the U.S. industry will eventually have no choice but to use our rights under U.S. trade laws to offset the unfair advantages provided to the Canadian industry.”

The U.S. is impatient for an update to the dated agreement

A report from the Canada West Foundation, a nonpartisan think tank, argues that U.S. market share of lumber is unlikely to decrease under the current agreement.

The foundation points to the fact that the U.S. timber supply outstrips the Canadian supply, and underlines that this decrease in supply has already hit the industry in British Columbia, where the industry is largest.

Since 2005, the report contends, 24 mills have shut down; of these, 21 remain shuttered. U.S. production of timber continues to increase, Canada West stated.

BC timber exports to the U.S. amount to C$3 billion, annually, while critics argue that the U.S. desperately needs Canadian timber for its housing needs.

Canada West expects another court battle before the World Trade Organization for the issue to be resolved, once again.

B.C. paper industry also under fire from the U.S.

A smaller trade dispute, also affecting British Columbia firms, is coming to light.

Two companies, Catalyst Paper and Irving Paper, have been on the receiving end of high duties of up to 19% from the U.S. over the export of its specialty paper.

U.S. customs officials maintain that Canadian companies are subsidized and are “dumping” the product in the U.S., where producers of the same product cannot afford to sell at equally cut-rate prices.

The duties were fixed after the U.S. Department of Commerce followed up on a complaint made in February 2014 by a U.S. group representing the paper industry.

The department investigated two Canadian firms, Hawkesbury Paper and Resolute Paper, before making its decision.

Catalyst told the Vancouver Sun that it has had to pay C$1.3 million to the U.S. Treasury Department for shipping 17,000 tonnes of its products. Catalyst expects to pay more once another ruling from the Treasury Department is made.

Do you think these issues will quickly be resolved under the new Canadian government? What do you think a new lumber agreement will look like?

The post Softwood lumber trade is first U.S.-Canada issue facing newly elected Prime Minister Trudeau appeared first on Trade Ready.