In this issue, we introduce a new series feature to the Gowlings Product Liability Newsletter. As part of our quarterly look at important developments in product liability law, we will provide brief articles on some of the fundamental principles of product liability law in Canada. Whether these concepts are new to you, or the contents of this series will be only a refresher, we trust you will find it useful.

Canadian PL Law – the very basics

Product liability in Canada is grounded in the common law except in the province of Québec, which is a civil law jurisdiction governed by the Civil Code. The law is similar in all common law jurisdictions across the country, and is based to a large extent on product liability cases decided by the Supreme Court of Canada.

Liability for a defective product may be found in tort and/or contract, and damages may be awarded for harm to both persons and property, as a result of a product failure including malfunction or design flaw. Injured parties can seek redress from manufacturers, distributors and retailers through formal court proceedings, private arbitration, mediation, or another form of alternative dispute resolution depending on the facts of the case and any agreement between the parties. There is no principle of strict liability at common law — there is a presumption of liability, however, under the Québec Civil Code.

Contractual liability may interact with product liability, depending upon the nature of the contractual arrangements. Canada places a great deal of emphasis on the ability of private actors to organize their legal affairs as they see fit, and as such any contractual terms between parties, including limitations of liability and alternative dispute provisions, will be prima facie enforceable.

There are two levels of government in Canada – federal and provincial. The federal government enacted the Canada Consumer Product Safety Act on June 20, 2011. It is sweeping legislation that will directly affect manufacturers, distributors, retailers and importers. In addition, most provinces of Canada have consumer protection legislation that provides remedies to consumers for defective consumer products. These statutes generally provide statutory warranties of merchantability and fitness for purpose with respect to all consumer products marketed within the province. These statutes also provide for individual causes of action for breach, in addition to possible government action. Remedies available under these laws include rescission of the contract of purchase and sale, and injunctive relief.

In Canada, however, there is no nominate tort for breach of a statute. While compliance with regulatory requirements or breach of same may be relevant evidence in a product liability trial, neither is determinative of the outcome of the litigation as decided in the seminal case, The Queen v. Saskatchewan Wheat Pool, [1983] 1 S.C.R. 205.