Whether you are a product manufacturer, a distributor, a water park operator, a premises owner, or a retailer, you know that there are certain “industry standards” that you are expected to meet.  Some of these are performance standards.  Others are safety standards.

Performance standards are a good measure on how you compare to others in the industry.  But safety standards … that is where you are judged in court.

Most states allow evidence of whether you met industry standards into a lawsuit.  Sometimes, proof that you adhered to safety standards is dispositive.  That is, if you can prove that you met industry standards, you win as a matter of law.

More often, evidence of meeting industry standards is allowed as evidence that you did not violate a duty to the plaintiff.  Still, it is powerful evidence that if you meet industry standards, you did everything “appropriate” to ensure that nobody would be injured in your operations or by your product.

Some safety standards are incorporated into law.  For example, ladder standards promulgated by ANSI are incorporated into OSHA standards.  Thus, not only are “industry standards” the standards of the industry, but they carry the force of law.

Some standards are simply organizational safety standards.  For example, the WWA promulgates standards for water parks.  These are “voluntary” standards.  But failure to adhere to these standards is admissible in court to show that you did not maintain your water park to the standards set by a major industry group. The same is true for ANSI standards applicable to products.

Not surprisingly, European and Canadian standards are compulsory, and are established by either a government agency or independent third parties in partnership with the regulators.  In either case a product must meet or exceed the criteria in order to be placed into the stream of commerce.  In the event that an unapproved product is sold, the seller can be subject to fines or other sanctions.

Even if you are not a member of the standard setting group (for example, not a member of WWA), you are expected to act “reasonably.” Industry standards are, at minimum, evidence of what is meant by “reasonable” conduct and responsibilities

While compliance with standards cannot guaranty a victory in court (the plaintiff can still argue that standards are a “minimum” and a reasonable person would have done more), it is strong evidence that you acted “reasonably” because you met, or exceeded, the standards of your industry.

 HOW ARE STANDARDS WRITTEN?

 Generally, standards are written and updated by people who have a stake in the standards: industry representatives, user groups, consulting engineers and other interested parties. .

This means that those who are affected by the standards and willing to get involved in the process are making a meaningful contribution to the development of the standards.  It also means that these people are writing standards that, once promulgated, will be applicable to everyone – even those who are not participating in the writing of the standards.

Some people are surprised to learn that, occasionally, people on these committees try to develop standards that, essentially, limit or eliminate their competitors.  Sometimes this is done through the simple changing of definitions or basic requirements.  These things often go unnoticed in practice – until someone points out that his competitor does not even meet industry standards.

Furthermore, sometimes a product or operation has special considerations that the committees do not recognize.  Perhaps a new product is in development, or a new attraction is being added to your water park.  These new products, although not on the market, could be undermined if regulations are not drafted or revised that allow the new product or attraction.

It is not uncommon for products or business practices to proceed faster than standards and regulations.

You can avoid having YOUR products or  YOUR attractions precluded by participating in the standard-writing committees.  You can ensure that your business can thrive, and that the  applicable standards for your industry or product provide a measure of safety without stifling growth and product development.

Sometimes, companies develop newer and safer products that, by definition, do not meet industry standards. Usually because they were not contemplated when the standards are written.  Only by participating on the standard writing committees can you ensure that your products, policies and procedures are considered, including those which you are considering for the future.

The standards are written to ensure that minimum, objective performance is maintained.  However, sometimes a company and its leadership are so far ahead of the curve that existing standards prevent the development of safer, better products and procedures.  This is where it is even more important  that the company is involved with writing the standards.

If the company is in court, it is always a good thing for the corporate representative to say “safety is important to us”.  That  is why we participate in making sure that there are safety standards – not only are our procedures outstanding, but we care about the safety procedures for everyone in our industry.”

Furthermore, we have found that if you have a special need for standards that address your particular operation, you can often have the issue addressed, but only if you participate in writing the standards.

Standards work to your advantage.  They help you  show that you meet industry standards.  If there are no standards that address your particular  product or operation, then when you are in court defending your product or operation you will come up against an “expert” who will opine on his or her own standard – which will be impossible to meet.

However, by ensuring that there is a standard that properly addresses your operation, you can also ensure that your internal procedures meet (or exceed) that standard.  In that way, you can say that your procedures are BETTER than industry standard, and that you adhere to tougher standards than the industry requires.

You can only make this argument only if there are standards that address your products, your operation or your business.  And this usually means volunteering time and making a commitment to the drafting of meaningful standards that contemplate not only your operation, but similar operations.

Your participation on standard-writing committees will benefit you.  It makes you a more “qualified” representative of your company; It also helps the general public (by making the operations of competitors meet the standards of safety that might not otherwise exist).

As an additional bonus – it makes the job of your litigation manger and attorneys much easier when we know that there are standards that address your industry, and that you exceed those standards (which, incidentally, you helped write).

ACTIVITY REPORT

Over the past quarter RRS closed 36 claims including 3 lawsuits and 33 non-litigated matters.

Two lawsuits (controlled by Risk Retention Services) resulted in settlements averaging $17,500.  The other lawsuit was controlled by the insurer. It resulted in a settlement of $345,000.

Of the 33 non-litigated matters, all were controlled by RRS. 31 of those matters were closed without any payment to the claimant.  The other two claims were resolved through settlement for an average of $752 per settled claim.  Using all claims, indemnity averaged $75 per claim.