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Are there any statutory criteria under which a product must be recalled or other corrective action be taken?
Recall and other corrective actions are governed by the Product Safety Act, which implements the EU General Product Safety Directive (2001/95/EC). Certain statutory criteria provide that a product must be recalled or other corrective actions must be taken. As a rule, authorities and companies must make these decisions on a case-by-case basis after carrying out a proper risk assessment. In doing so, the risk is defined as the combination of the severity and probability of a potential injury. It is crucial that risk assessments are carried out by stakeholders that have the necessary experience and skills. Industry experience shows that a proper risk assessment often indicates that a mandatory recall is unnecessary, but that certain voluntary corrective actions can be advisable, particularly to reduce unnecessary legal risks.
What rules and procedures govern notification of the product recall to government authorities and the public?
Authority notification obligations are codified in Section 6, Paragraph 4 of the Product Safety Act. This provision implements Article 5, Paragraph 3 of the EU General Product Safety Directive, which reads as follows:
"Where producers and distributors know or ought to know, on the basis of the information in their possession and as professionals, that a product that they have placed on the market poses risks to the consumer that are incompatible with the general safety requirement, they shall immediately inform the competent authorities of the Member States thereof."
The notification obligation is triggered by a potential risk. A proper risk assessment shows whether there is a respective risk that requires authority notification.
Repairs, replacements and refunds
What rules and procedures govern repairs, replacements and refunds for defective products?
German law provides numerous contractual, statutory warranty, tort and product liability provisions that may require a producer to repair, replace and refund a defective product. Depending on the individual case, the customer, owner or user of a defective product might be entitled to a repair, replacement or refund.
What penalties apply for non-compliance with the legal provisions governing product recalls?
Under German civil law, non-compliance with the legal provisions governing product recalls may result in liability claims against both the company and its decision makers.
As regards German product safety law, shortcomings may trigger authority actions. In particular, market surveillance authorities may simply order the recall and inform the public.
As regards German criminal law, non-compliance might result in administrative fines. The authorities have the power to take a percentage of a company's profits. Criminal investigations against the company and its decision makers (eg, for negligently causing bodily harm or negligent manslaughter) are also possible, particularly in the event of personal injury incidents. There are numerous criminal law precedents against companies and their management regarding non-compliance with the legal provisions governing product recalls. There have even been convictions, including jail sentences, against managers.
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