What’s in this Article
A customer suffers burns from your overheating smart speaker. Their solicitor sends a formal claim letter under the Consumer Protection Act. You have product liability insurance but have never made a claim. Now what?
The claims process from incident to resolution spans months or years, involves multiple parties (insurers, solicitors, expert witnesses, regulators), and requires careful coordination to preserve coverage and minimize liability.
Understanding the product liability claims process—what actually happens, who does what, typical timelines, and critical decision points—helps manufacturers navigate claims effectively and avoid mistakes that jeopardise insurance coverage.
This article explains the product liability claims process UK manufacturers experience, from initial incident through investigation, negotiation, and resolution.
Timelines
Although the steps in the claims process are broadly consistent, the timeline can vary significantly depending on the nature of the incident. Straightforward property damage claims may resolve within weeks, while injury claims — especially those involving medical devices, food contamination, or systemic defects — can take months or even years. The pace is driven by the availability of evidence, the complexity of the product, regulatory involvement, and the willingness of parties to negotiate. Setting realistic expectations early helps manufacturers manage internal stakeholders and maintain operational continuity.
CPA and Negligence
It’s also important to distinguish between CPA claims and negligence claims, because they follow different legal tests. A CPA claim focuses on whether the product was defective, regardless of how carefully it was designed or manufactured. A negligence claim, by contrast, examines whether the manufacturer failed to take reasonable care — for example, inadequate testing, poor quality control, or missing warnings. In real‑world claims, both routes are often pleaded together, and insurers assess them in parallel. Understanding the difference helps manufacturers anticipate what evidence will be requested and why.
The Triggering Event: Incident to Formal Claim
Product liability claims begin with an incident—product defect causing injury, damage, or loss.
Initial incident discovery
Customer experiences injury or property damage from product, seeks medical treatment (if injured), documents damage through photos and reports, contacts manufacturer to report incident and potentially request compensation.
At this stage, no formal claim exists—just incident report and initial contact.
Insurers often reserve rights early
During the early stages of a claim, insurers will often issue a “reservation of rights” letter. This is a standard step that allows them to investigate the circumstances without committing to a coverage position. It does not mean the claim will be declined, but it does signal that liability, causation, or policy coverage needs further examination. Manufacturers sometimes interpret this as adversarial, but in practice it is a procedural safeguard that keeps the investigation open while evidence is gathered.
Manufacturer’s immediate obligations
Document the incident thoroughly (date, product batch, alleged harm, customer details), preserve the physical product if possible for investigation, do NOT admit liability or make settlement offers without insurer notification, notify your product liability insurer immediately as potential circumstance.
Critical timing consideration: Most policies require notification of potential claims “as soon as reasonably practicable.” Delaying notification for weeks or months can jeopardize coverage.
Notify within 24-48 hours of becoming aware of serious incidents or threats of legal action.
From incident to formal claim
Some incidents resolve informally (minor injuries, manufacturer offers goodwill gesture, customer accepts without legal action). Others escalate to formal claims when:
Customer’s solicitor sends Letter of Claim (formal notification of intent to pursue damages), court proceedings are issued (Claim Form filed), customer rejects informal settlement and demands formal legal process.
Once formal claim arrives, the insurance claims process begins in earnest.
According to Ministry of Justice litigation statistics, approximately 60-70% of product liability incidents that reach solicitors’ involvement result in formal claims, with the remainder settling through informal negotiation or manufacturer goodwill responses before litigation commences.
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Immediate Claims Notification to Insurer
The moment you receive a formal claim (solicitor’s letter or court documents), notify your product liability insurer.
What to provide in notification
Copy of claim letter or court documents, details of the incident (date, product involved, batch/serial numbers), nature of alleged injury or damage, customer details, any correspondence with customer or their representatives, photos or evidence of the product and damage, internal incident investigation results if available.
Insurer’s initial response
Acknowledgement of notification (usually within 48-72 hours), assignment of claims handler to your case, request for additional information or documentation, confirmation of policy coverage (or reservation of rights if coverage uncertain).
Reservation of rights letters
If coverage is unclear (claim may fall within policy exclusions, prior knowledge issues, or policy term disputes), insurer issues “reservation of rights” letter.
This means: “We’re investigating and defending under the policy but reserve the right to decline coverage if we determine exclusions apply.”
Don’t panic—reservations of rights are common and often withdrawn after investigation confirms coverage.
Appointment of solicitors
Insurer appoints specialist product liability solicitors to defend you. You typically have input on solicitor selection (subject to insurer approval).
Panel solicitors have established relationships with insurers and understand claims handling. Using them is usually efficient, though you can suggest alternatives.
The solicitors work for you (defending your interests) but are paid by the insurer subject to policy limits.
Investigation Phase: Establishing Liability and Causation
Once solicitors are appointed, detailed investigation begins—typically the longest phase of claims process.
Product examination and testing
Physical examination of the product alleged to be defective, laboratory testing to identify defects or determine how failure occurred, comparison with exemplar products from same batch, forensic engineering analysis of failure mechanisms.
Expert witnesses are engaged: forensic engineers for mechanical/electrical products, chemists for contamination or material issues, medical experts for injury causation, fire investigators for fire-related claims.
Document disclosure
Both sides exchange relevant documents. Claimant discloses: medical records (if personal injury), receipts and proof of purchase, evidence of damage or loss, witness statements.
Manufacturer discloses: design specifications and risk assessments, quality control and testing records, batch production records, prior complaint history, post-market surveillance data.
Liability assessment
Solicitors and experts assess whether product was defective under Consumer Protection Act, whether defect caused the alleged injury/damage (causation), whether plaintiff’s use was foreseeable and reasonable.
CPA liability is strict, but not absolute
Strict liability under the Consumer Protection Act does not mean automatic liability. A claimant still needs to show three things: that the product was defective, that the defect caused the injury or damage, and that the loss falls within the scope of the Act. In practice, this means manufacturers are not held responsible simply because an incident occurred. The investigation still turns on whether the product failed to meet the level of safety the public is entitled to expect, taking into account design, manufacturing controls, warnings, and foreseeable use. This nuance is often misunderstood, and it is a key reason insurers and loss adjusters spend significant time examining documentation before accepting or denying liability.
This isn’t yes/no question—liability is often assessed probabilistically: “60% likely claimant succeeds if this proceeds to trial.”
Quantum assessment
If liability is probable, assess damages quantum: medical costs and future treatment needs, lost earnings (past and future), pain and suffering, property damage or replacement costs, consequential losses.
Quantum is also probabilistic: “If we lose, damages range £50,000-£150,000 depending on judicial assessment of injury severity.”
Timeline: Investigation phase typically takes 6-12 months for straightforward claims, 12-24 months for complex claims involving serious injury or technical disputes.
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Settlement Negotiations: Most Claims Resolve Here
After investigation, most product liability claims settle rather than proceeding to trial.
Why settlements are common
Litigation is expensive (legal costs continue accumulating), outcomes are uncertain (both sides face trial risk), settlement provides certainty and faster resolution, public trials create publicity and reputational damage.
The negotiation process
Claimant’s solicitor makes formal settlement demand (usually higher than realistic expectation), your solicitor and insurer assess reasonable settlement range based on liability probability and quantum, counteroffers are exchanged with justification, negotiations continue through multiple rounds.
Your role in settlement decisions
Insurers can’t force you to settle against your wishes—you have ultimate decision authority.
But insurers can limit financial support if you reject reasonable settlements: If insurer recommends settlement at £100,000 and you refuse, then trial results in £200,000 judgement, you may be personally liable for the excess £100,000 plus additional legal costs.
In practice, most policyholders follow professional advice—solicitors and claims handlers guide you through settlement assessment.
Typical settlement patterns
Claims settle at 40-70% of initial demand depending on liability strength and quantum defensibility. Early settlements (before extensive expert work) tend toward lower percentages. Later settlements (after full investigation and expert reports) reflect more accurate liability and quantum assessment.
Structured settlements
For serious injury claims with long-term care needs, settlements may be structured as periodic payments rather than lump sums, providing ongoing funding for medical care and support.
Mediation: Formal Settlement Facilitation
Many claims go through formal mediation—structured negotiation with neutral mediator.
How mediation works
Both parties agree to attend mediation (usually 6-18 months into claims process), neutral mediator facilitates negotiations, parties typically in separate rooms with mediator shuttling between, each side presents case and settlement position, mediator helps identify settlement range both sides can accept.
Mediation success rate: 60-70% of mediations result in settlement on the day or shortly after.
Benefits of mediation
Faster than proceeding to trial (settlement within 1-2 days rather than waiting 12-24 months for trial), lower legal costs (mediation fees modest compared to ongoing litigation), confidential process (no public trial), both parties have control over outcome (versus uncertain trial verdict).
Your involvement
You may attend mediation or authorize solicitor to negotiate on your behalf. Insurer’s claims handler typically attends representing insurer’s interests.
Decision authority remains with you—you can accept or reject mediated settlement proposals.
Trial: When Claims Don’t Settle
If settlement negotiations fail, claims proceed to trial expensive, time-consuming, and high-risk for both parties.
Pre-trial preparation
Expert witnesses prepare detailed reports for submission to court, witness statements are finalized, legal arguments are refined, trial bundles (all relevant documents) are prepared.
Trial process
County Court for lower-value claims, High Court for high-value or complex claims.
Trial typically lasts 2-5 days for straightforward product liability claims, longer for complex multi-party cases.
Evidence presentation: claimant’s case presented first, defendant’s case responds, expert witnesses testify and are cross-examined, closing arguments from both sides.
Judge deliberates and issues judgement (usually within 4-8 weeks of trial conclusion).
Outcomes
Claimant wins: Judge awards damages (full amount claimed, less if contributory negligence found), defendant pays damages plus usually claimant’s legal costs.
Defendant wins: Claim dismissed, claimant usually ordered to pay defendant’s legal costs (though cost recovery from injured individuals often limited).
Split decision: Liability found but damages reduced for contributory negligence or other factors.
Appeals: Either party can appeal if they believe legal errors occurred. Appeals extend resolution timeline by additional 12-18 months.
Why trials are rare: The combination of cost, time, uncertainty, and publicity drives 85%+ settlement rate. Trials are last resort when positions are irreconcilably far apart.
Regulatory Investigations: Parallel Process
Product liability claims often trigger regulatory attention creating parallel investigations.
Which regulators get involved
Office for Product Safety and Standards (OPSS) for general consumer products, Medicines and Healthcare products Regulatory Agency (MHRA) for medical devices, Food Standards Agency (FSA) for food products, Health and Safety Executive (HSE) if workplace injuries involved.
Regulatory investigation process
Regulator notified of incident through mandatory reporting or becomes aware through media/complaints, investigation opened to determine regulatory compliance, manufacturer required to provide information and documentation, potential outcomes: no action, improvement notices, prohibition orders, product recalls, prosecution.
Insurance coverage for regulatory proceedings
Most product liability policies cover regulatory defence costs—legal representation during investigations and enforcement proceedings.
Some policies cover regulatory fines where legally insurable; others exclude penalties.
Check your specific policy wording on regulatory coverage—this varies significantly between insurers.
Coordination between civil claim and regulatory investigation:
Often run in parallel with separate solicitors handling each. Evidence in one can affect the other. Regulatory findings can strengthen or weaken civil liability positions. Timing is usually regulatory investigation completes first, then civil claim proceeds with regulatory findings as evidence.
Post-Settlement: Corrective Actions and Lessons
After claims resolve, manufacturers implement corrective actions preventing recurrence.
Common post-claim actions
Product design modifications addressing identified defects, enhanced quality control procedures, supplier qualification improvements if supplier components were involved, updated warnings or instructions for use, field safety corrective actions or recalls if needed.
Insurance impact of claims
Claims experience affects renewal terms: premium increases (proportional to claim severity and frequency), higher retentions or sublimits for specific product categories, exclusions for particular activities or products, potential market shopping required if incumbent insurer withdraws.
Prevention and continuous improvement
Root cause analysis: What caused the defect? How did it escape quality controls? Systemic improvements: Implement changes preventing similar defects. Documentation: Record all corrective actions for regulatory and insurance purposes.
Claims are learning opportunities—manufacturers that implement genuine improvements demonstrate maturity to insurers and regulators.
The Bottom Line
Product liability claims process from incident to resolution typically takes 12-24 months, with investigation (6-12 months), settlement negotiations (3-6 months), and potential mediation/trial (6-18 months if settlement fails).
Critical early steps: Document incident thoroughly, notify insurer within 24-48 hours, preserve physical product for investigation, and never admit liability before insurer involvement.
Investigation establishes liability (was product defective under CPA?) and causation (did defect cause injury/damage?), using expert witnesses, document disclosure, and product testing—determining settlement parameters.
Most claims (85%) settle rather than proceeding to trial through negotiated resolution, mediation facilitation, or structured settlements for serious injuries. Settlement ranges typically 40-70% of initial demand depending on liability strength.
Trials occur when settlement fails—expensive, time-consuming, uncertain outcomes, but sometimes necessary when parties can’t agree on liability or quantum.
Regulatory investigations often run parallel to civil claims, requiring separate legal representation and potentially triggering recalls, enforcement actions, or prosecutions independent of civil liability.
Post-settlement corrective actions prevent recurrence and demonstrate continuous improvement to insurers, regulators, and customers—critical for maintaining insurability and market reputation.
The essential insight: product liability claims are managed processes, not disasters. With appropriate insurance, professional legal representation, and systematic approach to investigation and resolution, claims become manageable commercial challenges rather than business-ending crises.
Manufacturers that understand the process, respond promptly, cooperate fully with insurers and solicitors, and implement genuine improvements post-claim navigate liability exposure successfully while preserving insurance coverage and commercial relationships.
External Resource
UK Ministry of Justice – Litigation Statistics. https://www.gov.uk/government/collections/civil-justice-statistics-quarterly. “According to Ministry of Justice litigation statistics, approximately 60-70% of product liability incidents that reach solicitors’ involvement result in formal claims, with the remainder settling through informal negotiation or manufacturer goodwill responses before litigation commences.” Official UK government statistics on civil litigation patterns and resolution rates.
Simplify Stream provides educational content about business insurance for UK companies, especially those with high growth business models that require specialist insurance market knowledge. We don't sell policies or provide regulated advice, just clear explanations from people who've worked on the underwriting and broking side.
