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Liability

Product defects

How is a ‘product defect’ defined in your jurisdiction?

A product is found to be defective if it is not as safe as reasonably expected. The basis for the assessment is the point in time when the use of the product started after it was brought into circulation. The assessment also takes into account the use of the product that can reasonably be expected and the marketing of the product.

A product cannot be found defective because other and better products have been brought into circulation or because new technical or scientific knowledge demonstrates that other products or materials would be better than the existing product (known as development damage). Such damage is generally exempt from liability in damages as the manufacturer cannot incur liability for knowledge that it did not have when use of the harmful product started.

Under Danish law, the decisive factor for establishing product liability is that the defective product's harmful or dangerous properties caused the damage or injury. This means that product liability cannot be established if the damage or injury was caused by the incorrect use of the product. Damage or injury caused by a defective product exists when a product can cause damage to anything other than the product itself because of a defect or dangerous property when used normally.

In general, damage or injury caused by an inevitable risk of damage or injury to anything other than the product is not deemed to be a defect under the product liability rules (known as development damage). An example of development damage is the use of the contraceptive pill, as it is known that there is a risk that the pill can cause blood clots. Another example is tobacco, which could cause cancer. In both examples, the injured user knew that there was a known risk of serious personal injury because of the product's side effects. Nevertheless, the user decided to use the product because of its value. In other words, the known risks were accepted. Thus, the manufacturer does not incur liability for damage or injury in such situations.

This means that damage or injury caused by a defective product is conditional on damage to anything other than the product and that such damage or injury was caused by ‘normal use’ of the product, meaning use of the product that does not go beyond what could reasonably be expected. If the damage or injury is to anything other than the product despite normal use of the product, the product will often be defective. The product liability rules do not include liability for defects. In such situations, the rules on liability for defects apply. In addition to the injury caused by a defective product, the injured party can receive cover for the loss of the actual harmful product.

When assessing the damage or injury caused by a defective product, it is important that the manufacturer ensure that good and comprehensive instructions on normal use are enclosed with the product. By doing so, the manufacturer can influence the definition of what is considered to be reasonable use of the product. This also means that the manufacturer can prove how the product was marketed in respect of use.

The manufacturer can limit potential product liability by ensuring that the use of the product is described in detail and is delimited in the instructions. The manufacturer should also ensure that the product is not marketed in a manner that conflicts with reasonable use.

Causation and burden of proof

How is causation of loss or damage established in relation to product liability claims and where does the burden of proof lie? Can this burden be shifted in any way?

The Products Liability Act and the product liability rules developed by case law stipulate that in order to claim damages for injury caused by a defective product, there must be a causal connection between the defective product and the injury.

The injured party must prove a causal connection between the injury and the product, and that the injury was caused by the defect in the product. This burden of proof applies under both the Products Liability Act and the product liability rules developed in case law.

The same burden of proof applies to claims for product liability against the manufacturer and the intermediary.

However, if the injured party can discharge the burden of proof, there are different bases of liability depending on the liable body and whether the claim was raised under the Products Liability Act or the product liability rules developed under case law.

Legal bases for claims

On what legal bases can a product liability claim be brought?

The Products Liability Act stipulates that a manufacturer must compensate for damages caused by a defect in a product manufactured, imported or supplied by the manufacturer. In general, the manufacturer is strictly liable if the injured party has established that the product is defective and that the injury was caused by the defect.

However, there are significant exceptions to the manufacturer's strict liability and Danish law offers several defences.

The defences include development damage, where it is found that the product was not defective when it was brought into circulation, but where subsequent knowledge means that according to current technical or scientific knowledge, it would give rise to liability to use the product. One example could be if over time it has been discovered that a certain composition of materials is not sufficiently wear-resistant to be used as roofing. However, if such knowledge is available and a manufacturer still brings a product into circulation, any damage or injury to anything other than the product will be considered to be injury caused by a defective product, as the manufacturer has acted in bad faith.

Intermediaries are subject to a presumption of negligence under the Products Liability Act, meaning liability in damages with a reversed burden of proof. Therefore, the intermediary may incur liability for injury caused by a defective product unless it can prove that its conduct or the conduct of a party for which it is liable gives rise to liability.

According to the product liability rules developed by case law, a presumption of negligence also applies, but this has tended towards strict liability for both the manufacturer and the intermediary in many situations, which are consequently liable for injury caused by a defective product unless the manufacturer can prove that it did not act intentionally or negligently.

In 2006 the European Court of Justice overturned the rule on the intermediary's strict liability in the Danish Products Liability Act. The act was amended and intermediaries now have the presumption of negligence.

This means that an intermediary incurs liability under the Products Liability Act if there are any issues that can be blamed on the intermediary or a third party for which the intermediary is liable. If the intermediary can prove that the injury caused by a defective product was not caused by the intermediary's errors or neglect, a claim for injury cannot be brought against the intermediary.

In such situations, the injured party must raise the claim against the manufacturer, which has strict liability under the Products Liability Act.

The product liability rules developed by case law still apply. There has been debate in legal literature as to whether, after the amendment to the Products Liability Act, it is still possible to maintain the product liability developed in case law where the liability goes beyond the rules of the EU Product Liability Directive. However, to date no measures have been taken in such respect and the Supreme Court still applies the rules.

Criminal liability

Can a defendant be held criminally liable for defective products?

The Product Safety Act stipulates that the Safety Technology Authority may order a manufacturer to remedy a defect in the product or to destroy the product. The authority may also order the manufacturer to withdraw or recall the product, and may fine the manufacturer.

It is possible to incur criminal liability under the Criminal Code (eg, for wilful or gross actual personal harm). This is the case if, for example, a manufacturer withholds information about products or continues to bring products into circulation that it knows could involve a risk of injury.

Liable parties

Which parties can be held liable for defective products?

The manufacturer and all subsequent links in the chain of distribution (the intermediaries) may incur liability for the defective product. However, different bases of liability apply to a manufacturer and an intermediary, respectively.

Limitation of liability

Can liability be excluded or mitigated in any way?

Yes – various defences are available and possible damages may be reduced or cancelled as a result of the injured party's contributory negligence or acceptance of risk.

Both system damage and development damage are generally considered to be defences for the manufacturer. In such situations the cases are often complex in terms of evidence.

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