United States: Lithium-Ion Batteries: Small Products, Big Exposures

They are everywhere: in your pocket, in your car, in your hands, in your lap and even "in your face." Lithium-ion batteries are in nearly every product that has become a staple of modern life, such as smartphones, tablets/notebook computers, digital cameras and headphones. They are in our transportation systems – trains, planes and automobiles. They are involved in our hobbies and recreation, including radio-controlled vehicles, hoverboards and e-bikes. They also show up in some of our vices, such as vaping and smoking e-cigarettes. Though we typically view the batteries and the products they power as innocuous, if something goes wrong it can go catastrophically wrong.

Lithium-ion batteries were developed to meet the requirements that these products be small, lightweight and long-lasting. We don't want to be tethered to a cord, constantly needing to charge. The batteries are designed to be very energy dense in a small form, which requires the use of a flammable solution inside the batteries.

Lithium-ion batteries are starting their third decade in use, but over the past ten years they have received negative attention for potential safety issues and have become the subject of numerous product liability claims. A number of factors converged in 2006 − the watershed moment for lithium-ion battery claims – including the rise of social media, a more involved Consumer Product Safety Commission and a mass recall of notebook computer battery packs. Simply, a video showing a notebook computer catching fire at an airport gate went viral, focusing attention on these batteries as potential causes of fires. This spurred a recall that cost the battery supplier more than $400 million.

Since then, there have been dozens of recalls in different market sectors of various products containing lithium-ion batteries. The products included computers, cellular phones, car battery chargers, flashlights, DVD players and power tools, to name a few. In this past year, there have been numerous recalls of "hoverboard" self-balancing scooters, causing many retailers to halt their sales of those products. News reports and videos shared on social media platforms showed that the batteries inside the hoverboards failed and caused fires resulting in substantial property damage. There also have been numerous videos and news stories concerning exploding batteries in vapes or e-cigarettes that caused substantial bodily injury claims. Lithium-ion battery failures also grounded the Dreamliner 787 aircraft for a significant period of time in an effort to prevent a mass casualty event, until additional safety measures were developed to reduce that likelihood.

Each of these recalls is costly and adverse news reports damage reputations and open the floodgates for product liability claims. One insurer of a product involved in a battery recall reported a near 1,000 percent increase in the number of property damage or injury claims from reported battery failures post-recall. The typical battery failure claim concerns fire damage, burn injuries or smoke inhalation injures. The types of claims presented have ranged from relatively minor property damage or burn injuries to allegations that failed batteries were responsible for fatalities.

While these batteries rarely fail, a manufacturer of lithium-ion batteries or products containing them must be prepared to address, investigate and defend all claims, given the potential exposures involved. In future posts we will examine issues relating to the investigation and handling of lithium-ion battery product liability claims.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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