The Five P's of product recall
BMW recently recalled over 100,000 cars in the UK and approximately 1.3 million worldwide due to a product safety concern regarding their battery cable covers.
Whilst less than 1% of cars tested had suffered from the incorrectly fitted battery cable covering, there was wide spread press stating that the affected cars could catch fire! However, the precautionary stance and the way that BMW has handled the issue, combined with the sensationalistic reporting of the world press, has resulted in BMW actually gaining goodwill amongst parts of its customer base. Internet forums are rife with people raving about the quality of after sale service that they receive from BMW and stating that this recall is just a further example of that quality service.
The lesson to be learnt from this latest recall is that, in light of the all-encompassing nature of digital media and the evermore stringent product safety laws, disaster planning is not an option. Before placing goods on the market all retailers should ensure that they have an incident management team and associated incident management plan to deal with any product safety concerns that may subsequently arise. The BMW product recall has highlighted that with good planning, retailers really can make the best of a bad situation when it comes to product safety issues, and can even gain competitive advantage in the way the issue is handled.
Product safety law in the UK is contained in the General Product Safety Regulations 2005 which requires retailers to put only "safe products" on the market. Furthermore, these regulations also require retailers to notify the enforcement agencies and take remedial action, including "as a last resort, recall", in the event that they discover that goods are unsafe after putting them on the market.
The Regulations define a "safe product" as a product which, under normal or reasonably foreseeable use, presents either no risk or the minimum amount of risk acceptable in consideration of the products use, and consistent with the high level of protection for consumers.
In the event that a product falls below the definition of a "safe product" it is essential to instigate the incident management plan immediately. The next step will then usually be to get expert advice as to what specific action or inaction is required both technically and legally.
A range of steps can be taken from taking no action to instigating a full product recall. It is essential for retailers to consider which of these steps will be sufficient in any given situation. Whilst a full product recall will not always be required, it is necessary to deal with any product safety issue proportionately and in a prompt and uniform manner, to avoid reputational damage.
So the 5 P's are:
Plan – Design and implement incident management and recall policies, with clear lines of responsibility.
Process –Ensure that the policies are built into and form part of the company's processes.
Promote – Ensure that staff understand the policies and process, to ensure a unified response.
Proactivity – Planning for product safety issues now can help to avert disaster at a later date.
PR – The key link between you and your customers. Convey the right message at the right time!
This article was co-authored with Nicky Loadsman, specialist in product liability at Bond Pearce LLP.
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