Research firm Clyde & Co. is reporting that car and food recalls have increased dramatically worldwide over the last five years, as covered by Financial Times.
The firm studies recalls from both the car and food industries, finding that manufacturers are now more likely than they were in 2013 to recall defective items. In the European Union, for example, food recalls went up by 58 percent and car recalls are up by 150 percent since 2013. In the US, around 37 million vehicles from various manufacturers, including Toyota, Ford and General Motors, are currently under recall because of Japanese manufacturer Takata’s defective airbags.
Clyde & Co. legal director Jason McNerlin said that governments worldwide are paying closer attention to problem products today than they have in the past. McNerlin added that more precautionary steps are taken in the food industry if the environment has regulators who are watching more closely for potential issues, and that better detection techniques have made it possible to detect problems that would have gone unnoticed before. In the UK, for example, the government recently created an office that will manage large-scale recalls and identify risks to consumers.
The automotive industry is a little more difficult to oversee, the legal director noted. The increasing use of the same components in a big number of products can cause a recall that affects several manufacturers, as seen in the airbag recall from Takata. The growing complexity of some of these products is another factor, with problems not becoming obvious until the products have already been sold to the public.
A product recall can be very expensive. German insurer Allianz’s research, which was released last year, indicated that the average large recall claim in the auto industry was about $17 million, while the food claim average is around $11 million. The insurer stated that automotive companies are more likely to have claims under product recall policies (accounting for 42 percent of all claims), followed by food items and domestic appliances.
Even though there have been far more recalls over the past five years than ever before, companies are still only moderately successful in their efforts to get customers to return the defective items. In the US, there are currently some large auto recalls that only have a success rate of 50 percent of the total affected vehicles. This may be due in part to convenience, which US research has found is a major factor for many consumers. If the recall is inconvenient, consumers may make a snap decision not to take part in the recall. Auto recalls can cause a person to be without their vehicle for a period of time or involve spending a few hours or more at the dealer’s center, and for some, it’s simply not worth it.
Product recalls don’t appear to be going away any time soon and are only likely to increase in the near future, given the current trends. If you have been injured by or suffered losses from a defective product, speak to an experienced defective product injury lawyer today.
Thanks to our friends and contributors from Richard J. Banta, P.C. for their insight into food and auto recalls.