In an increasingly global market, cross-border and jurisdictional issues arise in product liability cases on a frequent basis. Two recent decisions have added some welcome clarity as to jurisdiction and applicable law in cases with an international element.

Jurisdiction

The Brussels Regulation (EC) 44/2001 provides that generally jurisdiction is granted to the court in the place where the defendant is domiciled.

However, Article 5 (3) provides that a person domiciled in a member state may be sued in another member state in tort, delict or quasi-delict (which includes the product liability directive referred to below) in the courts where “… the harmful event occurred or may occur”. In the case of Bier v Mines de Potasse d’Alsace1, the European Court of Justice (ECJ) ruled that the expression “place where the harmful event occurred or may occur” can encompass both “the place where the damage occurred and the place of the event giving rise to it”.

The ECJ recently considered the interpretation of Article 5 (3) of the Brussels Regulation in the context of a product liability case, Kainz v Pantherwerke AG2. This case concerned an Austrian resident, Mr Kainz, who purchased a bicycle from a retailer in Austria. The bike had been manufactured by the defendant in Germany. The claimant sustained his injuries during a bike ride in Germany.

The claimant commenced proceedings in Austria under Council Directive 85/374/EEC (the Product Liability Directive) which concerns liability for defective products (this directive has been implemented in the UK by the Consumer Protection Act 1987). He argued that the place  of the event giving rise to the damage was Austria on the basis that the bicycle was brought into circulation in Austria, ie he as an end user bought the bicycle from a distributor in Austria.

The Austrian Court referred the matter to the ECJ, seeking clarification of Article 5 (3) of the Brussels Regulation (EC) 44/2001 , and specifically the meaning of “the place where the damage occurred and the place of the event giving rise to it”.

The ECJ found that Article 5 (3) must refer to the place where the manufacturer is established, and not where the damage was later suffered. After all, the place of manufacture is the place where the event occurred which damaged the product itself. The ECJ made it clear that the courts where the product was manufactured would be best placed to determine whether the product was defective. Germany was therefore deemed to be the correct forum.

Applicable Law

Even if a Court is found to have jurisdiction to hear a case, it does not automatically follow that the law of that country will equally apply.

The date of the event giving rise to the damage is relevant for the purposes of determining jurisdiction. Where the event occurred before 11 January 2009, the issue of applicable law will be determined in accordance with the Private International Law (Miscellaneous Provisions) Act 1995 (PILA). Post 11 January 2009, the provisions of Rome II apply.

The recent case of Allen & Others v Depuy International Ltd3 considered the issue of applicable law.

This case concerned a number of non-European Union residents who alleged that they  had suffered injury as a result of defective metal-on-metal hip prostheses manufactured by the defendant in England. None of the claimants were domiciled in England and none had their operation or suffered their alleged injury in England. The majority of the claimants had received their prostheses in New Zealand, Australia and South Africa, but they chose to issue proceedings in England, being the Defendant’s country of domicile.

In terms of the relevant date giving rise to the damage, the Judge held that this should be either the manufacture or distribution of the defective prostheses, or otherwise the date of the original implant operation. All of these dates occurred before 11 January 2009 and therefore PILA applied.

Section 11 of PILA provides that the applicable law is that of the country where the injury was sustained. However , Section 12 (2) allows for this general rule to be displaced in exceptional circumstances. The claimants sought to argue that the general rule should be displaced in this instance so that the applicable law should be that of England and Wales.

The Judge considered a number of factors when determining the issue of applicable law, including where the implant operations took place (which was not necessarily the place of the injury), where the injury subsequently arose and where any revision surgery was undertaken. All of these factors occurred outside of England and Wales. The court also held it relevant that at the time of implantation, it was in the objective expectation of all parties that local law would apply. The Judge therefore held that the law of the country where the place of injury occurred should apply. Therefore, different foreign laws applied to the various claimants.

The Judge went on to provide helpful clarification as to whether the Consumer Protection Act 1987 would have applied in the event that English and Welsh law had been deemed to be the applicable law. The Judge held that both the Consumer Protection Act and the Product Liability Directive do not apply to cases where the injury/damage occurred outside the UK/EU/EEA.  The Judge held that the Consumer Protection Act applied to injuries or damage suffered by consumers when in the UK, and the Product Liability Directive for consumers in the EEA. The Consumer Protection Act did not therefore cover claims for injury/damage occurring outside the EEA. The claims which were before the Court in Depuy therefore fell outside the territorial scope of the Consumer Protection Act.