Many people understandably assume that the liable party in a product liability claim is the company that made that product. While it’s true that the manufacturer may bear primary responsibility, they’re not usually the only liable party.
Chain of distribution liability is a legal doctrine that imposes liability on every party that played a part in the consumer getting the product – the manufacturer, the wholesaler, the distributor and the store that sold the product.
The basic idea is the consumer was injured because they bought the product at the store, which got it from the distributor, which shipped it from the wholesaler, which got it from the manufacturer who made the defective product.
Does the chain of distribution liability doctrine mean all these parties bear equal responsibility? Not necessarily, although there’s no fixed allocation of fault based on the role each party played.
Some states have what’s known as joint and several liability, in which every party who is liable can be made to pay the full amount of damages. Texas uses a modified proportionate responsibility doctrine. Parties that are less than 50 percent responsible only must pay their proportion of damages, meaning if a distributor is 20 percent at fault, they are only required to pay 20 percent of the damages.
Why Would Businesses Be Held Responsible for Products They Didn’t Produce?
Part of the reasoning is simply that the injury may not have occurred had each party not done their part in delivering the product to the consumer. Another factor is the implicit warranty inherent within the consumer system, which essentially means consumers have a right to assume a product they purchase does what it purports to do safely and effectively.
In some cases, these parties have a more direct role in the making of the product or introducing the defect. For example, a distributor may play a role in labeling, packaging (or repackaging) or providing instructions and attaching safety warnings. They could be primarily at fault if the defect is related to their work on the product. An injury could also be attributable to damage the product suffered while in transit, like a piece of safety equipment breaking off due to rough handling.
These parties might also have shared liability built into their contracts with each other. These types of agreements can help ensure no one party pays the full price if they are ever targeted by a product liability lawsuit. Contracts are complicated and not always fully enforceable, especially if disputes arise in court, so just because liability is shared on paper doesn’t mean it will be after litigation.
Judges and juries can play an outsized role in deciding exactly how liability is shared when it comes to chain of distribution liability. Leeway is built into the legal system because the facts of cases can (and should) influence who is held primarily responsible for injuries.
The nature of the defect, which party is truly responsible for the defect and each party’s actions leading up to the injury are all factors that might ultimately determine how a judge or jury decides to apportion blame.
How Does Chain of Distribution Liability Affect Plaintiffs Who Were Injured?
There are potential benefits and disadvantages for plaintiffs when it comes to chain of distribution liability. The good news for plaintiffs is there’s a bigger pool of defendant resources since each party will have their own commercial liability policy. If a plaintiff has particularly high damages from medical costs, lost wages and pain and suffering, they may be more likely to receive full recovery from the deep pockets involved.
Downsides can come from the number of parties involved, each of which has their own legal team and insurance company lawyers. Cases with multiple defendants can get particularly complex, which can increase the cost of litigation for plaintiffs and their lawyers.
Having multiple parties involved can also lead to complexities during settlement negotiations since more parties will have a say in the settlement agreement. This can also lead to longer cases in general, which means it might take longer for a plaintiff to receive payment than it would in a case involving a single defendant.
Get Help With Your Personal Injury Claim
The Houston personal injury lawyers at the Weycer Law Firm have extensive experience in all areas of personal injury litigation, including complex product liability cases against manufacturers, distributors, retailers and other parties in the chain of distribution.
If you’ve been injured in the Houston area, call us at (713) 668-4545 for a free consultation.
