Will standards still provide safety post Brexit?

Many manufactured goods require CE marking, which shows that a product is safe and complies with EU legislation. As CE marking is integral to trade, the UK will continue to recognise CE marks and apply them, at least in the short term, whether products are being sold across the EU or only within the UK. Following Brexit, the UK is likely to ensure product safety standards meet or exceed those operating in the EU to avoid causing confusion and damaging the UK’s competitiveness. However, the UK may lose the benefit of access to initiatives such as RAPEX, the rapid alert system for consumer goods, and manufacturers may need to appoint an authorised representative from within the EU to serve as their local representative. The exit should have no effect on the UK’s participation in European standards bodies, including CEN, the European Committee for Standardisation, as CEN is a European body, not an EU body.

Robot risks

Robotics will require the insurance industry to rethink traditional first- and third-party risks. Artificial intelligence and in particular machine learning mean that the traditional view of ownership and responsibility will be obsolete and current wordings may need to be re-evaluated. For instance, first-party policies may unintentionally provide cover for the actions of property owned by the insured. Third-party cover will see complex issues raised as we push the boundaries of the meaning of damage and functionality.

Silent cyber increases insurers’ exposure to ever-changing technology risks

The Prudential Regulation Authority warned in 2016 about unexpected exposures to cyber risks. As consumers and industry make more use of interconnected products, and with cyber attacks increasing, insurers face exposures even under general insurance covers. For product liability insurers and insureds, the bigger question is how they react to developing technology, including artificial intelligence, which challenges the very notion of what a product is. As a minimum, a clear understanding of cyber risks needs to inform product design, underwriting and risk management.

A new approach to the safety of medical devices

Pharmaceutical and medical device manufacturers can expect a fairer hearing when facing claims under the Product Liability Directive. The strict liability approach adopted in earlier decisions has been challenged by Wilkes v DePuy. The court recognised that no medicinal product can be entirely risk-free. Instead, its potential benefits must be weighed against its risks when determining if it is acceptably safe. With this new willingness to assess a product’s safety in relative terms, manufacturers will want to show that there have been no manufacturing or design issues and rare, unpredictable product failures will not necessarily be viewed as defects.

Key developments