Modern vehicles are incredible machines, and automakers add more complexity, automation, and technology with each generation of vehicle.
Under the stylish body and shiny instrument panel is a maze of mechanical, electrical, and software systems that must be able to work seamlessly together, or else there are going to be some very bad results for both driver and automaker.
Engineering failures in vehicles cause more than a poor reputation – they can lead to significant financial loss, costly lawsuits, expensive product recalls, and criminal investigations.
There are times when automakers have been brought to their knees by a single defective part. This article will describe the nature of those legal fees, how they arise, and how to avoid them to begin with.
What Counts as an Engineering Defect?
Not all car issues are a result of engineering defects. Legal and regulatory purposes have deemed defects to be categorized as failure to warn, manufacturing defect, or design defect.
- Design defects are flaws in the product (always), and arise when the product is designed with an inherent flow. Although the car was built as intended by the designer, the plan was dangerous.
- Manufacturing defects arise during production. In the event there is a defect in production, the product could fail even though the design is solid and not defective.
- Failure to warn pertains to failing to adequately inform the user of potential dangers and/or safe uses. Defects may be unavoidable, but a company can still be liable for providing poor guidance.
Think of defective air bags, brakes that fail suddenly, or gas pedals that stick at unexpected times. These are problems that could lead to death, not just mechanical errors. It’s no surprise lawsuits often follow the injury or death of a victim.
Who’s Legally Responsible?
Generally, the legal system follows a concept of “product liability” which says a “manufacturer or seller can be liable if that product causes injury due to a defect.” In the automobile industry, those parties include:
- The manufacturer
- The parts supplier
- Technicians or engineers involved in design or taking it through testing
- Executives making decisions to shortcuts
- Dealerships skipping necessary inspections
Most of the issues are identified and investigated by agencies, like NHTSA (National Highway Traffic Safety Administration), who have the authority to enforce recalls and fines when wrongdoings occur.
In some cases, the Feds may get involved if warranted. If you have been a victim of a vehicle defect, speaking with an auto accident attorney can help you understand your options for a lawsuit and your rights.
The Cost of Lawsuits and Settlements
It is very rare for only one individual to be liable for a defect that causes an accident. There could be a company that designed the vehicle, the manufacturer of the parts, quality control teams, and even some cases of individual engineers.
The financial consequences of engineering mistakes can be staggering. Typically, the money is used for more than just injured motorists. In addition, automakers have to deal with costs connected to government fines, settlements, litigation fees, costs of recalling and retrofitting millions of cars.
In addition, there’s that long-lasting harm done to public trust, which can take years to recover from. In these situations, many victims contact a car wreck lawyer to get assistance with pursuing compensation from the automakers or parts manufacturers.
Let’s look at some examples from the real world:
- GM Ignition Switch Recall: In several GM vehicles, defective ignition switches caused the airbags not to deploy when the engine spontaneously shut off. The flaw led to over 100 deaths. Ultimately, GM paid over $2.5 billion for recall costs, fines, and settlements.
- Toyota Unintended Acceleration Disaster: Unintended acceleration in numerous models of Toyota vehicles resulted in deadly crashes. In addition to individual and class action lawsuits from victims, the company spent over $1.2 billion in criminal fines, plus they recalled millions of vehicles.
- The Takata airbag recall is one of the largest and most expensive recalls in history. Excessive booster charges on defective Takata airbags caused injury and death when they exploded. The Takata airbag recall has affected over 100 million cars of many brands, and automakers have spent a billion of dollars trying to address the consequences since Takata filed for bankruptcy.
These examples are not one-offs. Together, they demonstrate how one ignored detail in the manufacturing or engineering process can create a world crisis.
The Hidden Cost of Recalls
Although recalls are expensive, they are frequently viewed as a means for businesses to act morally. Automakers have to handle customer service, logistics, and public relations in addition to the upfront costs of repairs or replacements.
Recalls are often delayed for further investigation or to avoid immediate financial losses. But dragging your feet can backfire. Companies that do not act promptly may be fined by regulators, and the relatives of victims may use the delay as proof of carelessness in court.
Long-term consequences may persist even in cases where a recall is managed effectively. Customers might stop trusting the brand. Share prices may decline along with sales. Some customers will never buy from a company that sold them a risky vehicle again.
Criminal Charges: When Mistakes Become Crimes
Paying a settlement is one thing for a business. The possibility of jail time for its employees is another. Criminal charges may be brought in the worst situations, when it is evident that engineers or executives willfully disregarded safety hazards.
For instance, internal records in the GM ignition switch case showed that the company was aware of the flaw for years prior to taking action. Serious legal repercussions, such as congressional hearings and criminal investigations, were made possible by that delay. GM’s safety procedures were completely redesigned as a result of the scandal, even though no executives were imprisoned.
Although they are typically not the focus of these inquiries, engineers are not always exempt. It is much more difficult to defend the business in court when emails or reports reveal that technical staff members voiced concerns that were disregarded or kept quiet.
How to Prevent Legal Trouble
No engineering team intentionally creates a subpar product. But sometimes shortcuts are taken in a world of budgets, deadlines, and market pressure. Process control, ethics, and accountability become crucial at that point.
Companies can lower their legal risk by doing the following:
- Invest in thorough, real-world testing: While simulations can be useful, nothing can take the place of long-term reliability studies and actual stress testing.
- Pay attention to engineers: Safety concerns should be taken seriously when they are voiced by technical staff. Ignoring them can result in avoidable catastrophes.
- Avoid delaying recalls: Taking prompt action not only safeguards consumers but also improves a company’s legal position in the event that litigation is later brought against it.
- Educate staff on compliance: Teams’ incomplete knowledge of regulatory standards leads to many defects. These gaps can be closed with continued training.
- Establish a transparent culture because issues only get worse when they are concealed or denied. Defects are more likely to be discovered early in a company culture that promotes transparency.
Final Thoughts
There is more to the legal cost of automotive engineering flaws than just spreadsheet figures. These errors can cost businesses billions of dollars, destroy lives, and undermine trust. Many of these failures could have been avoided with better oversight, ethical leadership, and open communication between teams.
The field of automotive engineering carries significant risks. Every design choice has consequences. The potential hazards are only going to grow as autonomous cars and increasingly integrated electronics become more commonplace. But so are the resources and know-how to avoid failure.
At its core, safety isn’t just a technical responsibility, it’s an ethical one. The cost of ignoring it is far too high. Furthermore, the cost of making a mistake is just too great.