Managing Legal Risks.

Mr. Gleichauf, why is it important that lawyers are already involved in product development?

Gleichauf: The automotive industry – like the pharmaceutical industry or the financial sector – is becoming increasingly regulated. Therefore, we must deal intensively with regulatory and legal questions in the development field, at a very early stage of product development. The primary substantive focus is on the interpretation of technical regulations and standards that are unclear or that leave room for interpretation.

A good example of this is the discussion regarding an additional access step for vans for package delivery services, intended to make it easier for the driver to get in and out of the cargo space. The question here is how wide this access step should be. In accordance with product liability law, it should be as large as possible to make sure that the package courier can ascend and descend safely. However, it may also not stick out too much, so that it doesn't get caught on the curb or obstruct pedestrians.

We support and advise our colleagues in Research and Development in matters such as these.

So you are involved from the start. Are there other product topics in which lawyers play a decisive role?

Gleichauf: Yes, our scope of activity includes much more. For instance, we track down product counterfeiters: In this context, it is especially important to us to take out of circulation counterfeit automotive parts, such as rims or brake discs, because they are a real safety risk for our customers. For this reason, we cooperate closely with the relevant authorities. This protection of “intellectual property” also includes our company’s proprietary innovations, such as patents, design rights or copyrights. And we protect our valuable brand name against plagiarism and idea theft.

Furthermore, our unit is also in charge of all legal disputes relating to our products. That includes everything from product liability and recalls to warranty claims. Currently, we are of course also dealing with topics such as “Diesel” and “emissions”.

Developers and lawyers don't always speak the same language, but work together on developing products – does that work or does it lead to delays?

Gleichauf: I am a big fan of cross-functional cooperation. We have lawyers, compliance experts and engineers sitting at the same table. With our topics, a lawyer alone would reach his or her limits quite soon. This is because technical standards are written by engineers for engineers. At the same time, an engineer often cannot make decisions with legal relevance alone. We can only resolve the sometimes very complex issues together.

"Agility" and "Speak Up" are not just buzzwords, but absolutely necessary. We hold open and intensive discussions; as the colleagues come from various units, they contribute quite different perspectives. This is very important for us. This "topical friction" then leads to a good result.

Especially for the development of future technologies, intensive exchange is very important. Here, in some cases, we are dealing with legal issues for which there are no regulations yet. Take the safety issues connected with autonomous driving, for example: here, we have to consider the risks of tomorrow at an early stage.

In your unit the technical Compliance Management System, tCMS for short, was developed. What exactly is the tCMS and why is it so important for our company?

Gleichauf: We have derived the technical Compliance Management System (tCMS) from the existing Compliance Management System. Its objective is to safeguard the legal and regulatory conformity – i.e. technical compliance – of our products. With the tCMS, we assist employees in the development units in complying with technical regulations, standards and laws in the product creation process and provide orientation, especially for difficult questions of interpretation. For example, this can involve applicable laws are to become stricter. Until the actual amendment, the existing regulations must then be interpreted without ultimately violating any laws. We do not leave our engineers alone with such decisions. In this context, we don't only see ourselves as “a second pair of eyes”: we are, so to speak, a “second pair of shoulders”.

Please note that there have always been product-oriented compliance programs at Daimler. The added value of the tCMS lies in its systematic and preventative approach. We want to prevent potential violations of technical compliance from the outset, identify possible risks and actively mitigate them. The corresponding processes for this are established in all areas of development worldwide. For example, we have had great success with our multiplier network. The tCMS multipliers are personal contacts in development departments who are available when it comes to questions about technical compliance. And there is our so-called Clearing Process. In this process, complex product-related issues are discussed and decided from a legal and compliance perspective, as well as from a technical and economical point of view.

Is the technical Compliance Management System a reaction to “Diesel”?

Gleichauf: It's important to me to say that the technical Compliance Management System (tCMS) is not just a reaction to “Diesel”. It's an ongoing task. Because the legal risks are more likely to increase – especially if you look at new technologies. Taking a far-sighted approach to this is nowadays indispensable. Our tCMS is an answer to industry-wide challenges. It protects both us as employees and the company.

Mr. Gleichauf, thank you very much for talking with us!

This interview was conducted with Dr. Jürgen Gleichauf in his former function as Head of the Legal Product & Technical Compliance unit of Daimler AG. Jürgen Gleichauf is now Chief Compliance Officer and Vice President Legal Product & Technology at Mercedes-Benz Group AG.