MODULE C - LEGAL

1. MODULE C - LEGAL SUBMODULES C1. Conflict Of Interest/Code Of Ethics C2. Antitrust C3. Torts C4. Intellectual Property C5. Speaking For The Society ASME C&S Training Module C3

2. REVISIONS DATE SLIDE CHANGE 6/16/06 3 & Notes, 4, 9, 14, 24 4 Notes 8 Notes 9 Notes 14 Notes 15 15 Notes 16 & Notes 17 Notes “accreditation” changed to “conformity assessment” “accreditation” changed to “conformity assessment (accreditation and certification) ” Last bullet, first listed item revised. “accreditation” changed to “conformity assessment” and last bulleted item deleted. “accreditation” changed to “conformity assessment” and notes added “accreditation” changed to “product certification” “accreditation” changed to “product certification” in the heading; “An accreditation body” changed to “A certification body”; and Note revised. “accreditation” changed to “product certification” in heading and second listed item revised. First paragraph revised. ASME C&S Training Module C3

3. C3. Torts

4. OBJECTIVES This submodule will • Describe the potential tort problems that can arise in standards development and conformity assessment activities • Provide guidance in how to avoid these liabilities ASME C&S Training Module C3

5. AGENDA • What is a Tort? • Potential Tort Problems in Standards Development • Potential Tort Problems in Conformity Assessment • Potential Tort Problems in the Timely Implementation of New Technology ASME C&S Training Module C3

6. I. WHAT IS A TORT? ASME C&S Training Module C3

7. WHAT IS A TORT? • Definition • Civil wrongs recognized as grounds for a lawsuit filed by an injured party • Example • “Negligence” resulting in harm to persons or property ASME C&S Training Module C3

8. WHAT IS A TORT? • Purpose of tort law • To provide monetary relief for damages incurred • To deter others from committing the same harms • Source • Primarily, state court decisions • Some national consensus on issues affecting ASME ASME C&S Training Module C3

9. TORT - POTENTIAL APPLICABILITY • Negligent Tort • Defendant’s actions were unreasonably unsafe • Plaintiff must demonstrate that the defendant • Owed a duty of care • Breached or failed to discharge duty • Breach of duty was direct or proximate cause of injury to plaintiff’s person or property ASME C&S Training Module C3

10. ASME AND TORT LAW • Source of liability • Fostering reliance creates a duty to use reasonable care • Activities creating potential problems • Promulgating voluntary codes and standards • Administering conformity assessment programs ASME C&S Training Module C3

11. II. POTENTIAL TORT PROBLEMS IN STANDARDS DEVELOPMENT ASME C&S Training Module C3

12. NEGLIGENT STANDARDS DEVELOPMENT • Party must • Demonstrate a failure to exercise reasonable care • Demonstrate this failure increased the risk of harm ASME C&S Training Module C3

13. NEGLIGENT STANDARDS DEVELOPMENT • Potential applicability • Adoption of a standard could be held to constitute approval of an “unsafe” level of safety • Especially likely when manufacturers, regulators, insurers and users rely on the standard • Standard of care • Higher standard for a professional than for “reasonable person” • Conduct judged by what a “reasonable engineer” would have done ASME C&S Training Module C3

14. AVOIDING LIABILITY • Guidelines • Members must exercise reasonable care by • Carefully weighing all views • Using their best professional judgment • Objective, documented technical basis for the standard or code ASME C&S Training Module C3

15. III. POTENTIAL TORT PROBLEMS IN CONFORMITY ASSESSMENT ASME C&S Training Module C3

16. NEGLIGENT MISREPRESENTATIONIN CONNECTION WITH ASMEPRODUCT CERTIFICATION • Party must demonstrate • Either that there was a failure to exercise reasonable care in ascertaining whether a stamp was to be issued • Or that inadequate care was taken in overseeing the use of the stamp ASME C&S Training Module C3

17. NEGLIGENT MISREPRESENTATIONIN CONNECTION WITH ASMEPRODUCT CERTIFICATION • Issues • The presence of an ASME symbol may be misinterpreted as a ASME’s representation that the stamped item meets the ASME standard. • The actual certification of a product’s compliance is made by the ASME-authorized manufacturer. • Misinterpretation is likely where others rely on the stamp as an assurance of code compliance. ASME C&S Training Module C3

18. AVOIDING LIABILITY • Guidelines • Reviews and surveys must be carried out by competent and qualified personnel. • ASME must act promptly, within the limits of due process, upon the receipt of a report of non-conformance • Curtail Code Symbol use • “Quarantine” stamped products ASME C&S Training Module C3

19. IV. POTENTIAL TORT PROBLEMS IN THE TIMELY IMPLEMENTATION OF NEW TECHNOLOGY ASME C&S Training Module C3

20. (cont’d) TIMELY IMPLEMENTATION OF NEW TECHNOLOGY • Potential liability • Exists where new safety-enhancing technology is introduced but the consensus process delays a revision to the standard • New Jersey Supreme Court’s decision in Snyder vs. American Association of Blood Banks ASME C&S Training Module C3

21. TIMELY IMPLEMENTATION OF NEW TECHNOLOGY • Potential liability (cont’d) • Suit against the National Spa and Pool Institute • NSPI is a trade organization • NSPI failed to change a standard ASME C&S Training Module C3

22. AVOIDING LIABILITY • Guidelines • Take advantage of advances in communication technology • Streamline the standards development process ASME C&S Training Module C3

23. POP QUIZ #1 Name three “Do’s” that will help avoid tort liability when developing standards or running an accreditation program. 1. __________________________________ 2. __________________________________ 3. __________________________________ ASME C&S Training Module C3

24. CLOSING REMARKS • Things to keep in mind • Operation of standards development process and accreditation programs involves risk • Constant vigilance is required on the part of all individuals involved in the process • Direct questions to ASME officers or staff ASME C&S Training Module C3

25. SUMMARY • What is a Tort? • Potential Tort Problems in Standards Development • Potential Tort Problems in Conformity Assessment • Potential Tort Problems in the Timely Implementation of New Technology ASME C&S Training Module C3

26. REFERENCES Legal Implications of Codes and Standards Activities: “A Guide to Tort Law Compliance for ASME Volunteer and Staff Members” adopted by Codes and Standards Board of Directors March 23, 1982 ASME C&S Training Module C3