The Importance of Hazard
Analysis in Product Design and
Product Liability Litigation:
Why an FMEA (or Something Like It)
Is Needed in Product Files
Yves St-Arnaud
Bombardier Recreational Products Inc.
726 St-Joseph Street
Valcourt, Quebec, J0E 2L0 Canada
(450) 532-6367
(450) 532-6494 [fax]
yves.st-arnaud@brp.com
J.K. Leonard
Naman Howell Smith & Lee, PLLC
10001 Reunion Place, Suite 600
San Antonio, TX 78216
(210) 731-6358
(210) 785-2958 [fax]
jkleonard@namanhowell.com
Yves St-Arnaud is the Director of Legal Services for Bombardier Recreational
Products, Inc., a leading manufacturer of recreational products including personal
watercraft, sport boats, all-terrain vehicles, sport utility vehicles, and motorcycles. In this capacity, Mr. St-Arnaud is responsible for managing the legal affairs of
BRP, including product liability, IP commercial and employment claims. He is also
actively involved in BRP’s product safety initiatives. Mr. St-Arnaud frequently contributes as a speaker on product liability issues with numerous legal organizations,
including DRI and the Product Liability Advisory Counsel.
J.K. Leonard is a member in the San Antonio, Texas, office of Naman Howell Smith
& Lee PLLC, where he maintains an active trial practice representing manufacturers
of recreational products, agricultural and construction equipment, consumer household appliances, industrial electrical equipment, automation systems, and cranes
and other overhead lifting equipment. He also advises clients with respect to preventive measures in the design and manufacture of products. Mr. Leonard is a frequent
lecturer to legal, trade and industry groups on product liability and prevention
issues. He is currently chair of the Agricultural, Construction, Mining and Industrial
Equipment (ACMIE) Specialized Litigation Group of the DRI Product Liability Committee and is also a member of the IADC and FDCC.
The Importance of Hazard Analysis in Product
Design and Product Liability Litigation:
Why an FMEA (or Something Like It) Is Needed in Product Files
Table of Contents
I.Introduction..................................................................................................................................................47
II. So—What Is Hazard Analysis Anyway?......................................................................................................47
III. Why Hazard Analysis Is Important.............................................................................................................48
IV. Goals of a Hazard Analysis...........................................................................................................................49
A. Identification of Hazard........................................................................................................................49
B. Reduction of Hazard/Risk.....................................................................................................................49
C. Achieve a “Reasonably Safe Product”..................................................................................................50
V. Methods of Hazard Analysis........................................................................................................................50
VI.Conclusion.....................................................................................................................................................53
The Importance of Hazard Analysis in Product Design and... ❖ St-Arnaud and Leonard ❖ 45
The Importance of Hazard Analysis in Product
Design and Product Liability Litigation:
Why an FMEA (or Something Like It) Is Needed in Product Files
I.Introduction
It can hardly be argued that most manufacturers take great efforts to design and produce a product
that is safe, effective and in demand. The technological advancements of the past half-century are staggering;
yet, so to is the increasing sophistication of those who “grade” a product’s safety. Regulations in the 20th century grew exponentially. The 21st century has seen a refreshed focus on additional regulations and, perhaps
more importantly, aggressive regulators. As the globalization of the economy has progressed over the past two
decades, there has been increasing focus on harmonizing regulations and standards. This includes regulation
of the pre-production assessment of potential hazards in a products use. What for years was reserved to informally determined activities and documentation has evolved into a myriad of approached and documentation.
While no longer in its infancy, hazard/risk analysis continues to mature and develop, with new approaches
and methods constantly appearing. This overview will address several reasons a manufacturer should implement a formal hazard analysis and discuss factors to consider in how to approach a product safety program.
II. So—What Is Hazard Analysis Anyway?
At a 50,000 foot view, hazard analysis is simply a systematic approach to evaluate the potential hazards posed by a product, a process, or a workplace. It can take many forms, but regardless of form it is an aid
in determining what hazards are present in the interface between man and machine/process/environment. In
the context of product design, the focus can be on the potential failure of the product itself, or in the potential
consequences of a perfectly working product that, nonetheless, raises the potential of a hazard in its use. In a
recently published standard, hazard analysis is defined as “a process that commences with the identification
of a hazard or hazards and proceeds into an estimate of the severity of harm or damage that could result if the
potential of an incident or exposure occurs.” ANSI/ASSE Z590.3-2011, Prevention Through Design, Guidelines
for Addressing Occupational Hazards and Risk in Design and Redesign Process, §3.7. This definition combines
what was traditionally considered two separate activities – (1) the hazard analysis, which identified the potential hazards present or possible and (2) a risk assessment, which quantified the risk posed by those hazards,
typically by frequency and severity. “Risk Assessment” has itself been defined in various ways. Definitions
provided in recent standards include “the entire effort of identifying hazards, assessing risk, reducing risk,
and documenting the results” (ANSI/PMMI B155.1-2006, Safety Requirements for Packaging Machinery and
Packaging-Related Converting Machinery, §3.25) and “the process by which the intended use of the machine,
the tasks and hazards, and the level of risk are determined (ANSI B11.0-2010, Safety of Machinery – General
Requirements and Risk Assessment, §3.69).
At its core, a hazard analysis is a tool to be used in the process of designing and manufacturing a safe
product. It is not, however, the only tool, and it is not the only activity to be considered. Obviously, sound,
practical engineering judgment must always be used in the design of the product and in the application of
information learned in the use of a hazard analysis.
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III. Why Hazard Analysis Is Important
There are many reasons why a prudent manufacturer includes hazard analysis in the design process.
A detailed review of these reasons is beyond the scope of this presentation. However, the following is a nonexhaustive list of possible reasons for doing so (in no particular order of importance):
• It is good engineering design practice. A hazard analysis is now considered “state of the art”
for most products or processes. Most engineers entering the profession have been taught that
a hazard analysis is standard operating procedure, not a luxury or “extra step.” This is true of
most products, not just those traditionally considered as “advanced engineering” products such
as automotive, aerospace, pharmaceutical, etc. Virtually every product, from toys, to clothes, to
tools and equipment, now undergoes some form of hazard analysis.
• It may be required. Product regulations, such as in the form of mandatory standards, often
require a hazard analysis. Beyond that, the distinct trend over the past decade is for voluntary
consensus standards to include some formalized hazard analysis as an element of design activity.
Admittedly, the trend was first noticed in the international (ISO) community, but has grown to
include many domestic (ANSI) standards. It is safe to assume that this trend will not only continue, but accelerate. In addition, a documented hazard analysis is a pre-requisite to obtaining a
CE mark, a virtual must in today’s global marketplace.
• It provides information. An effective hazard analysis can provide information helpful to manufacturers in many respects. This includes information that may lead to design improvements on
other products, information helpful to installers/servicers/integrators of the product and, not
surprisingly, information that can be included in literature that accompanies the product (i.e.,
warnings and instructions).
• It can result in cost savings. A hazard analysis can identify potential issues early in the process.
This can mean costs savings because the cost to address them is much more controllable at the
design stage than after the product is released and a recall may be necessary. A hazard analysis
also often helps identify issues that lead to adjustments in the manufacturing process that can
save time and money, as well.
• Your consumers expect it. Consumers are savvier than ever before. Product safety is a primary
expectation of today’s consumer. For the sophisticated industrial users, a documented hazard
analysis is often required before a product is accepted into their work environment, particularly
as more such users are performing detailed hazard analyses of their workplace to ensure worker
safety.
• When (not if) litigation strikes, a hazard analysis is necessary. This is really a multi-layer issue.
First, manufacturers can be certain that it will be requested to produce a documented hazard
analysis in products liability litigation. The failure to have a documented analysis can be more
than just uncomfortable – it can be used as evidence that the standard of care was not met. Kia
Motors Corp. v. Ruiz, 348 S.W.3d 465, 479-80 (Tex. App. – Dallas 2011, pet. filed)(failure to produce FMEA sufficient to uphold jury finding of breach of industry standard of care in design
of air bag system). Second, it is a detailed road map for the defense of a product liability case.
While strict liability focuses on the product, not the conduct of the manufacturer, a documented
hazard analysis plays two important roles in the defense of these cases – it provides a story board
for establishing that the product is “reasonably safe” and it provides evidence of the care and
48 ❖ Product Liability Conference ❖ April 2012
attention put into the design process so that the manufacturer can defend against claims of punitive damages.
• Post-sale duties may be controlled. Several jurisdictions recognize at least some level of a postsale duty to warn. See, e.g., Lovick v Wil-Rich, 588 N.W.2d 688, 694-95 (Iowa 1999)(post-sale
duty to warn when substantial risk of harm is known or reasonably should be known to supplier,
supplier can reasonably identify those needing a warning, warning can be effectively communicated and acted upon and rick involved justifies the burden of providing the warning); Vassallo v.
Baxter Healthcare Corp., 696 N.E.2d 909, 923-24, 428 Mass. 1, 22-23 (1998)(manufacturer under
a continuing duty to warn of risks discovered following sale, at least insofar as original consumer
purchaser is concerned); Tabieros v Clark Equip. Co., 944 P2d. 1279, 1229 fn. 11, 85 Haw. 336,
356 fn 11 (1997)( manufacturer under a continuing duty to warn of dangers discovered following sale and delivery of product); Lunghi v. Clark Equip. Co., 153 Cal.App.3d 485, 494, 200 CalRptr. 387 (1984)(manufacturer or supplier under a continuing duty to warn after product leaves
its possession); Cover v Cohen, 61 N.Y.2d 261, 274-75, 461 N.E.2d 864, 473 N.Y.S.2d 378 (1984)
(manufacturer under a post-sale duty to warn if it receives notice of danger through an accident
or advancements in the state of the art). A documented hazard analysis provides support for an
assertion that there was no defect in the product at the time it was manufactured, thereby providing some level of insulation to certain post-sale duties, but also decreasing the likelihood that
conditions triggering the post-sale duty would be present.
IV. Goals of a Hazard Analysis
A manufacturer conducting a hazard analysis should expect to achieve several goals from the effort.
While there may be intrinsic goals that vary by industry and by company, some of the important goals for any
hazard analysis are the following:
A. Identification of Hazard
The initial goal in conducting a hazard analysis is the identification of potential hazards in the design
and use of a product. While many potential hazards may be considered “obvious”, a thorough analysis of the
product and it use will likely reveal information that can direct further design refinements and/or warnings,
if the design cannot reasonably be changed. The analysis should consider not only the expected normal use
of the product, but also any “reasonably foreseeable” misuse. Unfortunately, the concept of “reasonably foreseeable misuse” can lead to competing interpretations and often forms the basis for litigation after an incident is experienced. However, as an example, “reasonably foreseeable misuse” has been defined as “the use
of machinery in a way not intended by the supplier or user, but which may result from readily predictable
human behavior. See, e.g., ANSI/PMMI B155.1-2006, Safety Requirements for Packaging Machinery and Packaging-Related Converting Machinery, §3.23 and ANSI B11.0-2010, Safety of Machinery – General Requirements
and Risk Assessment, §3.61. There is good news and bad news here. The good news is that the documenting of
this process can be used to show that foreseeable misuse was considered in the product’s design such that the
features of the product account for that misuse. The bad news is that there is no end to skilled practitioners
arguments that just about any misuse is foreseeable.
B. Reduction of Hazard/Risk
Once a hazard (or hazards) has been identified, steps can be taken to reduce the risk posed by that
hazard. The steps can include a re-design to eliminate or reduce the hazard. Design changes may include
The Importance of Hazard Analysis in Product Design and... ❖ St-Arnaud and Leonard ❖ 49
safety guards or devices to protect against the hazard. However, there are times when nothing can be done
from a design perspective to address the hazard and maintain the usefulness or integrity of the product. In
this instance, a decision must be made whether to press forward with the product and provide warnings and
information to address the hazard, or to abandon the design altogether. The decision on how to proceed must
be guided by practical and sound engineering practices.
C. Achieve a “Reasonably Safe Product”
If the initial goal in the hazard analysis undertaking is to identify potential hazards, the ultimate
goal is to achieve a product that is reasonably safe, both in its intended use and any reasonably foreseeable
misuse. In reaching this point, manufacturers must realize that there is no product that can achieve “zero
hazard” status. Rather, as specifically recognized by several standards, a level of “acceptable risk” should be
obtained. “Acceptable risk” means just that – a level of risk that is determined to be acceptable considering the
hazard(s), the efforts made to reduce risk during the hazard analysis and design processes and the disappearing return on further risk reduction features.. Again referring to recent standards, ANSI B11.0-2010, Safety of
Machinery – General Requirements and Risk Assessment, §3.1 (and interpretive notes) defines it as follows:
3.1 acceptable risk: A risk level achieved after risk reduction measures have been applied. It is
a risk that is accepted for a given task (hazardous situation) or hazard. For the purposes of [the]
standard, the terms “acceptable risk” and “tolerable risk” are considered to be synonymous.
Informative Note 1: The expression “acceptable risk” usually, but not always, refers to the
level at which further technologically, functionally and financially feasible risk reduction
measures or additional expenditure of resources will not result in significant reduction in
risk. The decision to accept (tolerate) a risk is influenced by many factors including the
culture, technological and economic feasibility of installing additional risk reduction measures, the degree of protection achieved through the use of additional risk reduction measures, and the regulatory requirements or best industry practice.
Informative Note 2: The user and supplier may have different level(s) of acceptable risk.
Informative Note 3: A similar phraseology used in some ISO standards is as follows: “the
risk has been adequately reduced.”
While a manufacturer can never remove all risk from a product, the benefit of conducting a hazard
analysis, engaging in risk reduction activities, and reaching the point of “acceptable risk” is advantageous. It
not only prevents, in all likelihood, many situations from ever occurring, but also provides ammunition for a
manufacturer when a claim is made that a detailed review was made and that the situation at hand either did
not rise to the level of “reasonably foreseeable misuse” or was such a remote issue that further risk reduction
efforts were not warranted.
V. Methods of Hazard Analysis
There are various methods to performing a hazard analysis. The selection of which method to choose
is based on many factors – including the product, the use/market, the available or readily discoverable information on the product and its use (and users), and the risk tolerance of the manufacturer. Perhaps the best
known model is the Failure Modes and Effect Analysis or Design Failure Modes and Effect Analysis (FMEA
or DFMEA). Heavily used by the automotive industry, this method is a “systematic engineering analysis
undertaken for the purpose of recognizing and evaluating potential failures of a product. See, Dixie Steel Erectors, Inc. v. Grove U.S., L.L.C., 2005 WL 3558663, at 4, fn.7 (W.D. Okla. 2005). A prime characteristic of this
50 ❖ Product Liability Conference ❖ April 2012
approach is that it focuses on the product and the consequences of what might occur if the product, or a component of the product, fails. FMEAs do not, however, consider user interaction. As such, differing methods of
hazard analysis have evolved over the years. These include, but are not limited to:
• Fault Tree Analysis (FTA)
• MIL/TR3 Matrix
• Preliminary Hazard Analysis (PHA)
• Others
Most forms of hazard analysis involve a rating/ranking of the severity of encountering the hazard(s)
(consequences) as well as the exposure rate (or frequency of exposure) in order to quantify the risk posed.
Obviously, a low consequence, low frequency risk is one that may not warrant further risk reduction efforts,
whereas a high severity risk encountered infrequently may warrant action. Examples of this type of analysis
tool are the MILSTD 882 system (found in ANSI B11.0-2010, Safety of Machinery – General Requirements and
Risk Assessment, Annex D, Table D-1):
Severity
Probability
Catastrophic
Critical
Marginal
Negligible
Frequent
High
High
Serious
Medium
Probable
High
High
Serious
Medium
Occasional
High
Serious
Medium
Low
Remote
Serious
Medium
Medium
Low
Improbable
Medium
Medium
Medium
Low
as well as the ANSI B11.TR3 system (found in ANSI B11.0-2010, Safety of Machinery – General Requirements
and Risk Assessment, Annex D, Table D-2):
Severity of Harm
Probability of
Occurrence of Harm
Catastrophic
Serious
Moderate
Minor
Very Likely
High
High
High
Medium
Likely
High
High
Medium
Low
Unlikely
Medium
Medium
Low
Negligible
Remote
Low
Low
Negligible
Negligible
There are numerous tools from which to choose when selecting a hazard analysis approach, including software-based programs. The key is that a manufacturer should make an informed decision about what
approach best fits its product, its industry and its business. In approaching product hazard analysis, the following suggestions may prove helpful:
The Importance of Hazard Analysis in Product Design and... ❖ St-Arnaud and Leonard ❖ 51
A.Select a team – A team approach typically yields better information and, thus, better results
from a hazard analysis undertaking. There are several areas of specialty and/or experience from
which to choose one or more members of this team. They include:
(1) Engineers – Persons involved in the product design and as well as the design of the manufacturing processes are arguably the most knowledgeable about the product and its potential uses and hazards;
(2) Sales personnel – Those with user contact on what is available in the industry and what
requests are being voiced by users often provide “new” information;
(3) Field/Service personnel – Those with user contact on similar products or processes may
provide “cross-over” intelligence on what is actually being seen in the field;
(4) Claims/Legal personnel – These persons may help provide insight on foreseeable misuse,
standards, etc.;
(5) Experts – Both design professionals and safety/human factors experts can be invaluable, if
the platform warrants the investment.
B.Information sources – In conducting the analysis, some effort should be devoted to a review of
available literature and other information sources. The potential sources of information in conducting the analysis may include:
(1) Design History – A manufacturer can often translate “lessons learned” from other products
to a new or redesigned product;
(2) Demographics of expected users – Demographic information provides potential insight
into users habits and propensities and may also provide guidance for languages to be used
with literature and labeling;
(3) Brainstorming – A brainstorming session of those familiar with the product or process
can be helpful in initially identifying potential hazards, uses, misuses and items to further
investigate in the analysis;
(4) Industry/Competitive information – It can be helpful to survey competing products, technology and information. However, don’t assume a competitor is compliant. Do the leg work
yourself!
(5) Regulatory/Standards reviews – A thorough review of applicable mandatory and/or voluntary standards which may apply is a must. Manufacturers should also check global standards for items that may be treated differently than under prevailing domestic standards.
(6) Literature review – A literature review includes a brochures, manuals, advertisements,
websites and the like. It is important to know how the product is or will be marketed in
order to ensure that as many relevant uses as possible are considered in the analysis
(7) Litigation history – For new products, this is, obviously, somewhat difficult. However, there
are often approaches taken in litigation that translate to most products made by any particular manufacturer and, again, provide a broad spectrum of considerations for risk reduction. Also of importance is how the manufacturer’s design philosophy has been received
in the litigation context. If the philosophy has been met with severe criticism and was difficult to defend in past cases, it likely won’t change just because the product is different. On
the other hand, if the company’s philosophy has received broad acceptance by opponents,
52 ❖ Product Liability Conference ❖ April 2012
juries, courts and/or regulators, it provides some comfort if the process is once again followed.
C.Document the process – It is increasingly critical that any hazard analysis activity be thoroughly documented. Not only do several standards contemplate or require this, but the documented process can become a manufacturer’s “playbook” for defending and trying liability cases.
The documented analysis is much more effective that simple testimony to the effect that “we did
it but it was not written down, trust us.”
VI.Conclusion
A formalized, documented hazard analysis program is no longer a luxury. It is increasingly SOP for
the prudent manufacturer and expected by regulators, users, claimants, plaintiffs’ experts and counsel and,
importantly, jurors. A prudent manufacturer will embrace this development and make use of a formalized
hazard analysis to provide better, more reliable and safer products. As risks are reduced to an acceptable level,
the process provides benefits to production, to sales, and to consumer acceptance and satisfaction. Finally, the
documented process provides comfort to the manufacturer who faces the following actual discovery requests:
• Identify any and all safety analyses, safety audits, fault tree analyses, failure mode and effect
analyses or hazard analyses that you have conducted, or caused to be conducted with respect to
any dangers, risks, or hazards associated with the foreseeable uses of your product. This interrogatory obviously includes any hazard analyses concerning the risk that the [event would
occur], and any hazard analyses that identifies ways to reduce or eliminate that risk by design,
manufacture, marketing and/or instruction for use.
• Produce any documents that discuss the details of any design review, FMEA (failure modes
and effects analysis), or other safety inquiries you made (and have continued to make) to identify the potential hazards associated with the different….systems (or associated with [activity]).
This includes documents involving the analysis at the design stage, manufacturing stage, at the
time of sale or thereafter, you made in analyzing the potential hazards or risks of serious injury
or death associated with [activity] used with the [product] you sell. This includes documents
involving the cost (manufacturing, dealer and consumer cost) when comparing the different
optional…systems you offer or offered in comparison to the standard…system as well as documents involving the profit margin or the difference in the profit margin of each system…
• Documents pertaining to the philosophy of providing additional protection to innocent bystanders, service people and slightly careless but not negligent operators. This includes documents to
support your contention regarding whether [Plaintiff] was unsafe or unreasonable.
The Importance of Hazard Analysis in Product Design and... ❖ St-Arnaud and Leonard ❖ 53