Laywer

8D Reports are widely used in the automotive industry to handle customer complaints and in many ways, 8D Reports are useful documents. From a legal perspective, however, they also bear risks. The Reports are compiled by the supplier.

The issues begin with the observation that 8D Reports are meant to present “facts”. In my experience, this means that courts will deem the information presented in 8D Reports as the legal facts of a case and allocate the responsibility for technical problems accordingly. Courts will usually consider the established facts as acknowledgements of responsibility in a legal sense from which the respective party to the proceedings will hardly ever recover. The argument that it is not the 8D Reports’ objective to make legally binding declarations will not be heard by the courts because these documents represent an integral part of the contract between the parties that is aimed at determining root causes and corrective measures. Any technical and legal consequences are based thereon.

As a general rule, 8D Reports are written under time pressure as well as pressure exerted by customers. Both kinds of pressure are factors which work against due diligence. In my experience, 8D Reports rarely ever contribute to establishing the relevant facts in the way they are said to do. Two examples will serve to briefly illustrate this point irrespective of possible exceptions:

1.

8D Reports suggest that the supplier who has to deliver the Report is and must be solely and exclusively responsible for the root cause that gave rise to the complaint. More often than not, this assumption turns out to be false or at least untrue in many respects. In most cases, the complaint part has failed in the field. However, there is no rule saying that a product which fails in the field was necessarily defective already at the time of its supply. Without knowing the possible impacts of the different processing stages on the product throughout the entire supply chain and without knowing the failure conditions while the vehicle is in operation and the failure conditions of the field, it is, as a rule, not possible to determine the actual root cause; the fault can at least not be attributed exclusively to the supplier’s manufacturing process. The same goes for conditions under which an allegedly defective part is removed from the product. If an individual supplier part is defective, this does not necessarily mean that there are also defects affecting the entire series. 

Without the aforementioned information, the supplier’s means of analysis are limited. The customer’s participation, for instance in accordance with the BMW Standard GS 95004, often leaves much to be desired for reasons which shall not be discussed in detail in this article. One of these reasons is certainly that within the automotive industry, the so called “failure parts” are determined by the manufacturer and only made available to the supplier to a limited extent, namely under the conditions of – selected or unselected – reference market procedures.

2.

Without extensive information and analysis on the failure conditions of a supplier product, neither provisional containment actions nor final corrective actions can be taken except in rare and absolutely unambiguous cases and certainly not under the constant time pressure. 

3.

8D Reports are often drawn up by engineers with no command of legal terminology because the Reports are not considered legally relevant documents. As a result, the wording is often disastrous which in my experience cannot be corrected at a later point. Moreover, 8D Reports are often drawn up by employees who, depending on their positions and responsibilities, were responsible for the problem which caused the complaint. Thus, they have a plausible interest in how the actual root cause is described. The fact that 8D Reports have to be drafted following a “process-oriented approach” and have to consider interdependencies between individual processes is often neglected. The situation gets even worse when 8D Reports are drafted in a foreign language.

4.

In my practical experience, using a disclaimer has proven to be helpful and is now a widely accepted method. It may read as follows: 

„This 8D Report is a provisional and purely technical statement based on the information and knowledge currently available to us and is subject to further inspection and analysis as well as full disclosure of information on the part of the customer on root causes and corrective actions. Regardless of standard forms and terms, this Report therefore does not provide any statement regarding or confer any contractual, statutory or other liability or claims for compensation. The Report neither contains nor gives rise to any direct or indirect acknowledgement of fault, obligations, liability or any other claims against us.“

8D Reports are subject to the requirements for communication with customers as set out by ISO 9001:2015 and IATF 16949:2016. Communication requires full disclosure and sharing of information between supplier and customer. Only under these circumstances can 8D Reports become useful tools for both parties and meet their ultimate objective, i.e. to get to the bottom of the root cause and take sustainable corrective measures.

Translated from German into English by Charlotte P. Kieslich charlotte.kieslich@web.de