Install

Get the latest updates as we post them — right on your browser

. Last Updated: 07/27/2016

Exporters, Prepare for Lawsuits

Russian producers may not be flooding international markets with their goods yet. But when they do, they had better be prepared for a Western-style surprise: litigation.


"If you're going to design a product here and sell it in Europe and the United States, be prepared for lawsuits," said Dr. Ray Hagglund, a U.S.-based expert in product liability.


Hagglund brought his crusade for consumer safety to Russia last week, delivering the gospel of product liability to some 150 Moscow engineering students.


The students of Baumansky University heard Hagglund's cautionary tales of death and dismemberment at the hands of drill presses, back-hoes, planers and cars, and learned to think about product safety through the looking-glass of the litigious West.


An engineer by training and a professor at Worcester Polytechnic Institute in Massachusetts, Hagglund has provided safety analysis in high-profile product-liability lawsuits against such companies as Ford and American Motors.


With his lectures to Baumansky's engineering students, Hagglund said he hoped to train future Russian designers to take into consideration all the accidents that could come from the use -- and misuse -- of their products.


In the United States, product-related accidents can translate into millions of dollars in court judgments if plaintiffs can prove producer negligence. As a result, U.S. manufacturers have become hypervigilant in designing injury-proof new products and machinery.


In Russia, on the other hand, there is little incentive -- even U.S.-style negative incentive -- for manufacturing safe products.


Russia has only one product liability law on the books, according to Olga Gyurdzham, an attorney at the Russian law office Lebor Legal Services. She called the Russian Federation law "On the Defense of Consumers' Rights," last revised in 1995, "very general."


"It gives the general understanding that consumers have rights that should be protected," she said. "But there are no details."


Offering details on such a law are all the more crucial in Russia, a civil law society. In common law societies such as the United States, court decisions form valuable precedents and serve as a notice to future producers. But in a civil law society, regulatory standards must be hashed out by legislators, said Walter White, managing director of Steptoe & Johnson International in Moscow.


"There's no reason they couldn't put those regulatory standards in place next week," White said.


With liability law undeveloped, product liability suits are rare here, too. Gyurdzham recalled the notorious exploding color television sets manufactured by the Soviet producer Rubin in the 1980s, which caused deaths, injuries and fires. Consumers had little recourse: Some gained reparations from the factory, some from the vendor. Awards measured from 250 to 400 rubles, she said. That may be enough to pay for a new television set, but not enough to instill fear into producers.


Russian exporters used to lax rules at home could be in for a surprise, however, when they try to export to the United States or Europe.


"If someone starts to sell products in the United States in any volume, they need to expect to be held to U.S. standards, which must be considered very stringent," said White. A case can be opened in the United States, he said, if that is where the goods were sold.


"Once they start selling goods into the U.S., they can expect plaintiffs to attempt to exercise jurisdiction over them in the U.S," White said.


U.S. lawsuits could provide expensive setbacks for Russian producers. That is why Hagglund hopes to impart in future Russian engineers the analytical skills to anticipate all of the creative ways consumers in a litigious society could misuse a product. "If you don't ask the questions, you won't get the answers," he said.


Hagglund was invited to Moscow by the Lebor law office and Tatyana Uzhva, the rector of the Moscow School for Business, Political Science and Law and the organizer of a project in conjunction with the Baumansky School to create a joint program in engineering and law.


The project's initiators do have more than consumers in mind: They also want to make Russia safe and profitable for product liability lawyers. "The idea is to help the consumer as well as the lawyer," said Lebor's general director Boris Titov, a lawyer and engineer.