Newstead Discusses How Businesses Can Prepare for Recalls

“When a potential product safety issue arises, your reaction needs to be swift and effective,” writes Shook Hardy & Bacon Partner Alison Newstead in Corporate Counsel article about how businesses should prepare for a recall.

Noting that poor handling of recalls can greatly tarnish a company’s reputation and its business, Newstead offers five steps for creating a recall plan to “help guide the business calmly and effectively through a procedure” that is often complicated, disruptive and costly.

According to Newstead, companies should first implement a “straightforward” recall plan that considers “who will need to be involved, both internally and externally, for effective investigation and redress.” In addition to considering suppliers that may have certain statutory obligations to assist with a recall, companies should remember not to limit contractual wording to “recalls” only.

Because companies often lack focus on what needs to done, within what time limit and by whom, it is therefore important to “identify a small core incident management team that is familiar with all these immediate concerns,” says Newstead. Policies should include training all staff on their responsibilities in the wake of a recall.

Next, companies need to ensure support systems and resources are in place. Newstead recommends that key documents – including stock lists (with model and batch or lot numbers), distribution lists, complaints registers and technical information about the product – are kept easily accessible for the incident management team.

The final step to preparing your company for a recall is to have an adequate traceability system set up which requires all critical components to be appropriately identified and labeled. “The business needs to quickly and easily identify (i) what stock was affected; and (ii) where it is,” says Newstead. Failure to implement adequate traceability systems can seriously hamper the investigation process and appropriate corrective action.

“No business wants to be faced with a recall situation,” concludes Newstead. “However, taking these five simple pro-active steps now will ensure that your business is ‘recall ready’ and able to deal swiftly with any potential safety issue that may arise.”