Tag Archives: Discovery

The Electronic Discovery Trap

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In a recent blog, “Why Naming Multiple Defendents In A Lawsuit Is Common Practice”, I talked about the liberal discovery rules in the U.S. and cost to comply when named as a defendent in a product liability lawsuit.

I wanted to expand on this because so many of the businesses that contact us have never been through a lawsuit and do not have any concept of how extremely expensive it is to comply with discovery in today’s electronic and technological world.

Often overlooked in today’s modern world is the fact that plaintiff attornies have spent the last 20 years perfecting the art of electronic discovery and how to use it against the defendents as a way of making them spend money. 

Did you know that defendents are required to preserve every email? If the emails are in an old system, defendents are required to search out and discover emails in old systems that are no longer supported and make this information available to the plaintiffs in whatever format they want to read it.  Not only is it expensive to ferret out the emails, but what if the emails contain sensitive materials that are protected by HIPPA privacy laws?  The cost to comply goes up.

I think you get the picture.  Even if you have no liability in the lawsuit, our liberal discovery rules in the U.S. allow the plaintiff’s attorney to force you to spend a great deal of money to comply with discovery.  The higher the costs to you the greater the asking price by the plaintiff’s attorney to reach a settlement.

Big Bear American Made Choppers, Inc. Sued For Product Defect

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After working in the product liability industry more than nine years and literally working with hundreds of different types of manufactures and distributors, the custom motorcycle manufactures really stand out.  This group, as a whole, are like the motorcycles they design and manufacture – unique and independent. 

We have quoted and placed many product liability policies for custom motorcycle manufactures and when compared to similar size businesses in different industries, one common thread among custom motorcycle manufactures – this group is more likely to roll the dice and not to carry product liability insurance.

This is why I was drawn to the article,  Syracuse Product Liability Trial Underway Against Big Bear American Made Choppers.  Custom motorcycle manufactures should to take notice of the facts of this product liability case and just how quickly a product liability claim can happen.  Fact one, this accident was caused by just two screws that apparently vibrated out of the front fender causing the fender to contact with and lock the front tire of the motorcycle.  Fact two, the injury was real.  The plaintiff ended up having his right leg amputated above the knee.  Fact three, it took three years of discovery before this product liability case was resolved.  I do not have all the facts regarding discovery, but three years implies hundreds of man-hours and hundreds of thousands of dollars were invested to comply and respond to discovery requests.

I do understand that sometimes economics dictate that not everybody can afford insurance; however, when the failure of your product can result in loss of life or serious injury, you have a higher obligation to those that buy your products and you should carry product liability insurance.

With the custom motorcycle manufactures, I believe there is a macho attitude and rationalization that in their minds they believe a person should not buy a motorcycle if that person is not willing to take a risk.  However, I think most custom motorcycle manufactures will find that most riders will accept responsibility for risking their own lives (e.g. driving too fast or not wearing helmets), but will quickly sue when they believe your product was responsible putting them at unexpected or unintended risk.

Why Naming Multiple Defendants In A Lawsuit Is Common Practice

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When a product liability client is sued, they are usually amazed at how many parties are named in the product liability lawsuit and how many of the named parties have little or no connection to the product that allegedly caused the injury.  

The 3 reasons below will provide a little insight into why there are multiple defendants named when there is a product liability lawsuit.

The first reason there are so many parties named in a product liability lawsuit is  “Alternative Liability Theory”.  This theory allows the plaintiff to shift the burden of proving which of the two or more defendants was responsible for their injury to those defendants in which the plaintiff cannot identify.  Under this theory the plaintiff still has to prove the product caused the injury; however, it relieves the plaintiff of the burden of identifying the source of the product and requires the defendants to prove they were not the source of the injury.  This theory also is a means to get the defendants to identify the guilty parties responsible for the injury in order to avoid being subject to liability themselves.

Of course since product liability law is subject to individual state laws, “Alternative Liability Theory” may not apply in your state.

A second reason so many defendants are often named on product liability lawsuits is because the plaintiff’s attorney could be sued for malpractice, if the attorney fails to name a responsible party to the lawsuit and as a result, the plaintiff misses out on receiving compensation for the injury.  Since legally the plaintiff’s attorney cannot bring the same lawsuit twice, it is the responsibility of the attorney to name all parties that could even remotely have any responsibility for the injury.

The third reason is what makes people so cynical about the legal system.  In the U.S. our Discovery rules are so liberal that attorneys have perfected the art of covering up potential defendants with discovery paperwork.  The costs to comply is so expensive that it is more often in the financial best interest of the defendant’s insurance carrier to provide a settle payment to get release from the lawsuit than to go to the expense of trying to comply with discovery. 

Simply put, by naming as many defendants as possible, the plaintiff’s attorney can increase the amount of money they can collect.  For example, the cost of complying with discovery could potentially cost $10,000; however, by settling for $7,000 the insurance carrier ultimately saves $3,000.  So the next time your insurance carrier decides to settle rather than fight or defend a frivolous product liability lawsuit you will understand that the settlement is based on pure economics.  If you are adamant about defending what you see as a frivolous lawsuit, your insurance carrier may agree to pay you the settlement amount and allow you to hire your own attorney to defend the claim.