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Liability

Product defects

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

Under the Consumer Protection Act – a no-fault liability regime – “producers” are responsible to compensate for damages caused by a “defect” in a product. The concept of ‘defect’ is therefore central to a determination of liability. Section 3 of the act specifies that a product is defective if it does not provide the “level of safety to which consumers are generally entitled to expect”. This expected level of safety is determined with reference to:

  • the purpose for which the product is to be used;
  • any accompanying instructions or warnings; and
  • the time in which the product was supplied (notably, a product will not be deemed unsafe just because industry standards subsequently changed and developed safer product alternatives).

As is the case throughout the European Union, for products subject to extensive regulation, the concept of a ‘defect’ in a product liability case should not be assessed without reference to the rules and standards under the applicable regulations. This is a controversial area, particularly on the question of whether compliance with safety regulations can effectively amount to a defence to any challenge that the product has as defect for the purposes of the Consumer Protection Act.

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 burden of proof is on the claimant in product liability matters. Under the Consumer Protection Act, the claimant must prove the defect, the damage and the causal link between the defect and the damage. The standard of proof is “on the balance of probabilities”. It can be controversial as to what matters need to be proven in order to establish a defect. Is it enough to prove that the product failed, causing injury, or does the claimant need to prove what caused the product to fail (ie, the specific defect)?

The defendant bears the burden of proving any of the statutory defences. Again, the balance of probabilities applies.

Legal bases for claims

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

There are distinct causes of action in regards to claims for damages caused by dangerous products, as follows. These causes of action can be pursued simultaneously, separately or in the alternative (as is most common).

Negligence If a claimant brings an action under the common law tort of negligence, the following four elements must be established:

  • The manufacturer owed the claimant a duty of care;
  • The manufacturer breached that duty;
  • The breach caused the damage in question; and
  • The damage was not too remote from the breach.

Contract For an action brought under breach of contract, the claimant must make out the breach of an express or implied term and that the damage caused was also not too remote. There are different thresholds of foreseeability and remoteness applicable as compared to tortious claims.

Consumer Protection Act Finally, where a claim is brought under the Consumer Protection Act, the claimant must prove that:

  • the product was defective;
  • the claimant has suffered damage; and
  • there is a causal link between the defective product and the damage suffered.

Criminal liability

Can a defendant be held criminally liable for defective products?

There is criminal liability for defective products in England and Wales, in respect of specific offences, under the General Product Safety Regulations and certain sector-specific legislation.

There is a general obligation that a manufacturer will not introduce an unsafe product into the consumer marketplace. Doing so is a criminal offence, as is introducing to the market products that do not comply with specific mandatory regulations.

Criminal offences also arise where there is failure to comply with other requirements of relevant regulations, such as failure to notify the relevant authority when a company becomes aware that it has placed a dangerous product on the market.

Liable parties

Which parties can be held liable for defective products?

Under the Consumer Protection Act, liability rests with the “producer” of the product. This is generally the manufacturer, where the product is manufactured in the European Union. Where the product is manufactured outside the European Union, the importer of the product will bear the responsibility of the producer. A party can also be deemed to be a producer if it places its trademark on its product so as to hold itself out as the manufacturer, or if a distributor fails to disclose the identity of the party from which it acquired the product when asked to do so.

Similar but not identical rules apply when it comes to responsibility under product safety regulations. Generally, the parties with the main responsibilities are the manufacturer and importer of the product into the European Union (where applicable). Other responsibilities rest with distributors of products, including retailers.

Limitation of liability

Can liability be excluded or mitigated in any way?

While the general common law position is that parties have scope to limit or exclude their liability through contractual terms, there are various statutory restrictions to that right.

For example, the Consumer Protection Act imposes restrictions on parties seeking to limit or exclude liability to consumers for any damages arising through a defective product. More broadly, the Unfair Contract Terms Act 1977 prohibits businesses from incorporating terms into their contracts with consumers that are deemed to be overly prejudicial to the rights of the consumer. Specifically, this act restricts businesses from being able to limit or exclude liability for damage occasioning personal injury or death under any circumstances.

There is greater scope for companies to limit their liabilities in business-to-business transactions and it is worthwhile taking care to carefully consider the terms of contracts with supply chain partners, as UK courts will generally – in the absence of statutory protections – be slow to overturn the terms of contracts between commercial parties, especially where each is considered to have had an opportunity to negotiate with the other to protect its position.

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