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By John Kristensen of Kristensen, LLP posted in News on Friday, May 25, 2018.
California Poised To Ban Confidentiality Product Liability Settlements

California is poised to pass a law that bans secret settlements for product defects in Los Angeles and all across the state. California could join a number of other states that have passed similar bills in recent years.

The point of the new legislation is to prevent manufacturers in Los Angeles and all across California from reaching settlement agreements that remain confidential and prevent the injured parties from speaking publicly about the dangerous products and environmental hazards.

“If the bill passed, it would once and for all ban settlement agreements that keep secret information about defective products and make it impossible for other consumers to find out about the defect and, therefore, prevent injuries or even death,” explains our Los Angeles product liability attorney at the Kristensen LLP.

The bill, if signed into law, would be a major game changer for those suing negligent or reckless manufacturers for defective, dangerous, or inherently unsafe products.

What are these confidentiality settlements for?

Our best product liability attorneys in California explain that the new legislation would ban product liability settlements that require injured victims to stay silent about the defects. It would no longer be legal for manufacturers to reach settlements with injured persons on condition that the information about the defects in the product would be kept confidential.

It is a widely used practice by manufacturers to settle defective product liability claims filed by consumers that were injured by a defect to prevent the case from going to trial. “Once a product liability case goes to trial,” explains our Los Angeles product liability lawyer, “It gives publicity to the defect, as lawsuits become public record instantly.”

That is why many manufacturers are willing to settle claims sooner, but on one condition: the consumer must agree to confidentiality. More often than not, such manufacturers will get a protective order from the court that would prevent the injured victims from disclosing information about the matter after reaching a settlement.

Banning confidentiality settlements could prevent injuries and deaths

And while it is understandable why manufacturers want to keep that information secret (to protect their reputation and prevent loss of sales), lawmakers in Los Angeles and all across California want to put an end to this practice once and for all. Lawmakers argue that such confidentiality settlements prevent the public from learning about a potentially defective or harmful product and, therefore, being unable to keep themselves safe.

Such confidentiality settlements prevent federal and state regulators from discovering the defects and often make it impossible to prompt a safety recall. Recalls translate into loss of profit and tarnished reputation. But in no way does it mean that manufacturers will no longer be interested in entering into settlement agreements if the legislation passes into law.

It will still be possible to reach a settlement with the help of a Los Angeles product liability attorney and prevent the case from going to trial, which is both expensive and exhaustive for the two parties, the plaintiff and defendant. The new legislation would no longer allow dangerous or defective products to stay on the market for a long period of time.

Contact the Kristensen LLP to get a free consultation about your particular case. Call our offices at 310-984-1297 or fill out this contact form.