It was disturbing, if not surprising, that a recent survey concluded that, in the course of performing a spot check on 120 fireworks enterprises located within seven Chinese provinces, nearly half of the fireworks tested failed to satisfy basic quality standards. The inspection was performed by the State Administration of Quality Supervision and Inspection and Quarantine, and the results were published in February 2005.
The reality is that the Chinese fireworks industry remains highly fragmented, being composed of many small and medium-sized fireworks manufacturers located in remote townships and villages. For the most part, these manufacturers either lack the resources or desire to meet government requirements; and China’s notoriety for lax work safety standards should always be a cause of caution and concern for anyone doing business with a Chinese fireworks producer.
The study determined that a major defect due to inferior fuses affected more than one-third of the samples tested; either the fuse was too long or too short to be in compliance with established standards. The introduction of banned chemicals was another source of criticism, since many of the substances identified can easily burn or explode in an unintended manner. Additionally, the report indicates that 20% of the tested items contained hidden safety problems, and many producers were also improperly packaging the items. While these various shortcomings may have previously been a little known secret among industry insiders, the open publication of the report in various media introduces a real and credible risk for importers, retailers and users of fireworks made in China.
In the United States, an importer, retailer or user of fireworks produced in China may be found to be liable for injury to person or property under theories of strict liability, vicarious liability, or mere negligence. Accordingly, the extent of one’s knowledge of the issue of quality control, or lack thereof, is a threshold issue. Naturally, if one has obtained first-hand knowledge of a product’s defect(s) or a producer’s unsatisfactory quality control procedures, liability may attach. Ignorance may be of no value since it may be determined that one should have known the true facts and circumstances, and one’s failure to obtain the needed information is not likely to be an acceptable excuse.
While it is impractical and, perhaps, impossible, to guarantee that a fireworks product is not defective, various precautionary measures designed to diminish the exposure to liability as a result of injury to person or property are available to U.S. importers, retailers and users. The most common device is the incorporation of a broad hold harmless and indemnity provision to any purchase agreement that you may enter into with a Chinese producer. Care should be taken to ensure that the language to be used is both clear, complete and, most importantly, enforceable in the United States as against the Chinese producer. Another precautionary measure is procurement of broad product liability insurance coverage. Lastly, to the extent that a registry of prior complaints or violations regarding a specific producer is available, a search of that database would be wise; this search would not void liability, however, it may assist you in determining whether or not is it prudent to conduct business with a specific producer.
In conclusion, a sophisticated plaintiff’s attorney representing a party that has suffered injury to person or property in connection with the use of a fireworks product will likely assert a product liability claim as against all defendants that are determined to be in the stream of commerce for that particular fireworks product. Given the expectation of such a claim being made there exist the consequent responsibility to ensure that the producer maintains proper quality control standards that meet or exceed all government regulations. The failure to investigate is not a full defense; indeed, the failure to investigate may help to establish a theory of negligence on your part due to your omission to investigate. In the final analysis, the survey conducted by the Chinese government, and the various publications of the results of that survey, may become an exhibit to a product liability action that has to be reckoned with.
