Issue link: http://read.dmtmag.com/i/205815
Could You Be Sued Over a Tier-4 Problem? Litigation When new technology, customer confusion, plus new pricing and fines all converge beginning this January, a cloud of litigation may fall upon the industry – don't get caught in the storm. BY JAMES R. WAITE, ESQ. Engine emissions regulations have permanently altered the equipment industry, and we're not finished yet. January 2014 marks the onset of required Tier-4 Final implementation in the heavy, off-road construction equipment industry. While manufacturers have poured millions of dollars into R&D to meet the deadlines and dealers are readying their technicians and sales forces to support their customers through the transition, the subject of legal scenarios and considerations should not be underestimated. Legal Issues and How to Deal With Them Knowledge is Key. A lack of customer knowledge can spell disaster, particularly with respect to expensive new and unfamiliar equipment and technologies. After the damage has been done is not the time to try to determine who is responsible. It is, therefore, imperative that the customer acknowledge in writing all Tier-4/Stage IV monitoring and maintenance protocols, especially with respect to rentals. Also in the case of rentals, include in writing that the owner or distributor is entitled to inspect and maintain the equipment and, when necessary, recover damages for customers' noncompliance. Legal Liabilities. A great deal of Tier-4/Stage IV technology is new and/ or still being developed. Consequently, you can expect a number of legal issues (and lawsuits) to arise over the next several years dealing with, for example, damage resulting from maintenance failures, warranty claims, fines and penalties, updated guidelines, worksite restrictions, and other issues. Who will be responsible (and pay) for them? Fines. Important: The EPA can assess fines of up to $37,500 per violation against OEMs and dealers, and up to $3,750 per violation against individuals for tampering with or altering Tier-4 emissions devices. Never attempt to disconnect or circumvent Tier-4/Stage IV equipment, and if you rent equipment, be sure to advise your customers to refrain from doing so. Contracts. Few sale or rental contracts in use today adequately deal with these issues – the technology is simply too new, meaning the potential cost/liability issues have yet to be fully assessed. If you think you don't have the time to revise your current contracts, I would encourage you to do that before the inevitable lawsuits arise. When you do, among other things, you will want to make certain your sales 38 | www.cedmag.com | Construction Equipment Distribution | November 2013 and rental contracts accomplish at least the following: (A) Advise your customers of applicable Tier-4/Stage IV requirements (B) Obtain written confirmations from customers that you have provided, and they have received, read and understood, the necessary instructions and warnings (C) Obtain their agreements to comply with the new regulations and appropriate care for machines. (D) Obtain indemnities – agreements to reimburse you for your expenses if you are sued or fined for compliance failures by customers and third parties Doing so may be the difference between recovering a large emission controls-related loss, and suffering a hefty and nonreimbursible expense. Competitive Issues EPA Tier-4 regulations (40 C.F.R., Part 1039, et seq.) and EU Stage IV regulations (Directive 2004/26/EC of the European Parliament) apply to four major types of pollutant emissions: hydrocarbons ("HC"), carbon monoxide ("CO"), particulate matter ("PM") and oxides of nitrogen ("NOx"), and require that manufacturers substantially reduce pollution emissions. After Jan. 1, 2015, these requirements will apply