The Business Ethics Blog

Here’s a quick peek into the complexities of product safety, from a legal, regulatory, and ethical point of view.

From the WSJ: U.S. Probes Off-Road Vehicles After a String of Accidents

The Yamaha Rhino, a hit in the off-road-vehicle market, promises to go “almost anywhere” with an “amazingly high level of comfort and ease.” Now, federal safety regulators are investigating the vehicle following reports of some 30 deaths involving it, including those of two young girls last month.

The Rhino also has drawn keen interest from the plaintiffs’ bar: Yamaha faces more than 200 lawsuits in state and federal courts, many alleging the Rhino’s design is unsafe. Yamaha has settled some but recently beefed up its defense and says it may start to fight rather than settle.

Yamaha stands behind the design of the Rhino….

What the story casts as a tough regulatory problem — the lack of regulatory standards for new categories of products — can also be seen as a tough moral problem for manufacturers. Here’s what the WSJ says about the regulatory problem:

The Rhino matter shows how federal safety regulators sometimes struggle to respond to what they call “emerging hazard” areas. There are no regulatory standards for the new breed of off-road vehicles, the CPSC said.

They aren’t subject to ATV safety standards because of design differences such as having a steering wheel, in contrast to the ATVs’ handlebars. But the novel off-road vehicles also aren’t subject to the much-tougher standards for cars. Owners of UTVs don’t have to register them.

“When there is no standard in place, we have to basically determine if there’s a substantial risk of injury and death, and there’s a hurdle there that has to be met,” says Jay Howell, acting assistant executive director of the CPSC’s office of hazard identification and reduction.

This is how consumer regulation often works: Products hit the market governed by no particular safety standards. If injury reports later arise concerning a product, these gradually get the attention of both manufacturers and regulators — often with a spur from lawyers for those injured.

If this poses a challenge for regulators, it also must pose an ethical challenge for well-intentioned companies and the safety engineers who work for them. You need to ask: at what point (as information about the dangers of their product accumulates) would Yamaha have to start changing its designs? At what point should they withdraw their product altogether? Surely one or two injuries are not enough. And in a new product category, benchmarking by comparison with other products may not be very helpful. I point this out not to generate sympathy for poor ol’ Yamaha. Rather my point is that if you’re seriously interested in product safety, you need to do more than react to individual cases.