Product Safety Newsletter

In the August edition of the Product Safety Newsletter, current Marsh Risk Consulting Senior Vice President and former Consumer Product Safety Commission (CPCS or "Commission") Director of the Office of Compliance Alan Schoem discusses the consequences of increased civil penalites for products falling under the CPCS's regulatory supervision. Many believe that the changes brought about through the Consumer Product Safety Improvement Act of 2008 (CPSIA) will lead to increased litigation, which has been few and far between in the CPSC's 36 plus year history.

In the past, many companies that entered into a civil penalty settlements with the CPSC did not have to admit guilt for an accused violation. However, the CPSC has recently started to issue press releases that identify the specific violation for which the civil penalty was settled over, something that the language in specific settlement agreement does not state.

Schoem states:

"The language in the press releasesthat are at odds with the settlement agreements is more than a difference of semantics. It strikes at the heart of settlement agreements. If the Commission is to continue its practice of settling civil penalty cases prior to the initiation of litigation, its press releases announcing settlements should accurately reflect the language in the settlement agreements. If not, companies must determine wheter entering into a civil penalty settlement agreement with the Commission is in their best interest."