Chapter 12: Product Liability

Question 1

1 Product liability under the Consumer Protection Act 1987: Product, Defect and Damage

Answer 1

The Consumer Protection Act 1987 (the ‘CPA’) provides a statutory basis for claiming in relation to damage caused by defective products. It does not replace any claim in negligence or breach of contract, so whenever faced with a problem involving a defective product, a practitioner should consider negligence, breach of contract and the CPA.

Question 2

Fault on part of defendant

Answer 2

A successful claim in negligence requires the claimant to show ‘fault’ on the part of the defendant
ie that the defendant fell below the required standard of care. The CPA aimed to introduce a strict liability regime – a regime where parties could be found liable without it being necessary to show fault on their part. This provides better protection from a consumers’ perspective and makes it
easier for them to claim.

Question 3

1.1 Key sections of the Consumer Protection Act 1987

Answer 3

Section 2(1) provides that: Subject to the following provisions of this Part, where any damage is caused wholly or partly by a defect in a product, every person to whom subsection (2) below applies shall be liable for the damage.

This tells us that certain people will be liable for damage caused by a defect in a product. This subsection is at the heart of the CPA – it is the basis for a claim under the CPA. So, to understand
who can claim, we will start with making sure we understand this subsection.

Question 4

1.1.1 Product

Answer 4

Section 1(2): “product” means any goods or electricity and (subject to subsection (3) below) includes a product which is comprised in another product, whether by virtue of being a component part
or raw material or otherwise.

So product means any goods. And something which is included as a component or raw material in
something else, is still a product.

Question 5

1.1.2 Defect

Answer 5

Section 3(1)
There is a defect in a product for the purposes of this Part if the safety of the product is not such as persons generally are entitled to expect, and for those purposes ‘safety’ in relation to a product, shall include safety with respect to products comprised in that product and safety in the context of risks of damage to property, as well as in the context of risks of death or
personal injury

Question 6

Generally Entitled to expect

Answer 6

So you can see from this that whether or not something is defective depends on what people are ‘generally entitled to expect’. This makes sense. People’s expectations of the safety of (for
example) children’s toys are not going to be the same as their expectations of power tools for DIY.

Question 7

Section 3(2)

Answer 7

Expands the explanation we have seen, setting out that what people are entitled to expect depends on all the circumstances, including:

• The manner/purposes for which it has been marketed (example: we would expect cutlery marketed as suitable for young children to be safer than that marketed for adults). The way in
  which a product is described on packaging and any warnings that accompany a product are potentially relevant to what people are entitled to expect.
• What might reasonably be expected to be done with/in relation to the product (example: it would not be reasonable to use a microwave to dry a wet towel).
• The time when the product was supplied by its producer to another (for example: at one time, mobile phones were rarely purchased by/for children, but now this is quite common –
  expectations as to safety (in the hands of children) may therefore have changed over time. In addition, some products might be safe when put into circulation but deteriorate over time to
  become less safe).

Question 8

Key case: Richardson v LRC Products Ltd [2000] Lloyd’s Rep Med 280

Answer 8

In Richardson v LRC Products Ltd [2000] Lloyd’s Rep Med 280, the court rejected a claimant’s action for a ‘defective condom’ that led to her pregnancy on the basis that the defendant did not
claim its product to be 100 per cent effective.

The absence of a warning was regarded as significant in Abouzaid v Mothercare (UK) Ltd, The Times, 20 February 2001. The claimant was injured when attaching a ‘cosytoes’ (a fleece-lined
sleeping bag) to a pushchair – an elastic strap sprung into his eye, causing partial loss of vision. The product was held to be defective because ‘it was supplied with a design which permitted the
risk [of losing control of an elastic strap which might injure a person’s eyes] to arise and without giving a warning’. The public was entitled to expect more from the manufacturer.

Question 9

The difference between s 3(1) and the standard of care in negligence

Answer 9

One interpretation of Richardson v LRC Products Ltd might be that all the public is generally entitled to expect is for the manufacturer to take all reasonable steps to ensure the product is up
to standard; but if you think about it, this is just another way of saying that the manufacturer need only take reasonable care, just as they are required to by the tort of negligence.

Question 10

Key case: A v National Blood Authority [2001] 3 All ER 289

Answer 10

In A v National Blood Authority [2001] 3 All ER 289 the claimants sued the National Blood Authority
under the CPA as a result of personal injuries arising from their being transfused with blood
infected by hepatitis. The defendant argued that it had taken all reasonable care to ensure that the blood was safe and that this is all the public is entitled to expect. Burton J. disagreed and set
the standard somewhat higher. He noted that a patient undergoing a transfusion is legitimately entitled to expect that they will not be given infected blood, and that to hold otherwise would be to offer no more protection than the tort of negligence and to take strict liability out of a strict
liability regime.

It is therefore clear that when assessing expectations of a product the bar should be set higher than the negligence standard of reasonable care. In A v National Blood Authority [2001] 3 All ER 289 the claimants sued the National Blood Authority under the CPA as a result of personal injuries arising from their being transfused with blood
infected by hepatitis. The defendant argued that it had taken all reasonable care to ensure that the blood was safe and that this is all the public is entitled to expect. Burton J. disagreed and set
the standard somewhat higher.

He noted that a patient undergoing a transfusion is legitimately entitled to expect that they will not be given infected blood, and that to hold otherwise would be to offer no more protection than the tort of negligence and to take strict liability out of a strict
liability regime. It is therefore clear that when assessing expectations of a product the bar should be set higher than the negligence standard of reasonable care.

Richardson v LRC Products Ltd [2000] can be distinguished because condoms are both marketed and generally known not to be 100% reliable. The same cannot be said of blood. Reasonable care therefore had no role in either case.

Question 11

1.1.3 Damage

Answer 11

Section 5(1)
Subject to the following provisions of this section, in the Part “damage” means death or personal injury or any loss or damages to any property (including land). So most types of loss count as damage within the meaning of the CPA, but not (it would appear) pure economic loss. No claim can be brought for the loss of the product itself, or any product
supplied with the defective product as part of it.

Question 12

Example

Answer 12

A manufacturer of motors supplies a defective motor to a manufacturer of washing machines. The manufacturer of washing machines uses the motor in a washing machine and sells the washing machine to a consumer. It causes a fire in the consumers home which causes injury to the consumer and damage to the consumer’s home. The consumer can recover in relation to the injury and the damage to the consumer’s home, but not for the cost of the washing machine (or even the motor) itself.

Question 13

Limits on the type of damage

Answer 13

(a) No claim can be brought in relation to damage to property unless the sum to be awarded exceeds £275, excluding interest (s 5(4)).

(b) No claim for damage to property can be brought unless the property is ordinarily intended
for private use/occupation/consumption and intended by the person suffering the loss or damage mainly for his own private use/occupation/consumption (s 5(3)).

Question 14

Summary of damage recoverable under the CPA

Answer 14

Only death, personal injury, loss of damage to property (including land) is recoverable.

Question 15

1.2 Summary

Answer 15

• A claim can potentially be brought in relation to product liability under the provisions of the
  CPA. This is independent of any potential claim in negligence or for breach of contract.
• Under the CPA anyone suffering damage from a defective product can bring a claim, whether
  or not they purchased or used the product.
• A claimant must show that the product was defective – that it was not such as persons are
  generally entitled to expect, taking into account warnings, packaging and expected use.
• There is no need to show ‘fault’ on the part of the defendant.

Question 16

2 Product liability under the Consumer Protection Act 1987: who can sue, who can be sued, defences and
limitation

Answer 16

Section 2(1): Subject to the following provisions of this Part, where any damage is caused wholly or partly
by a defect in a product, every person to whom subsection (2) below applies shall be liable for the damage. We have already explored the meaning of the terms ‘product’, ‘defect’ and damage’. We will now consider persons liable for damage caused by a defective product.

Question 17

2.1 Persons liable for damage

Answer 17

Section 2(2)
(2) This subsection applies to—
(a) the producer of the product;
(b) any person who, by putting his name on the product or using a trade mark or other distinguishing mark in relation to the product, has held himself out to be the producer of the product;
(c) any person who has imported the product into the United Kingdom from a place outside the United Kingdom in order, in the course of any business of his, to supply it to another.

The provisions in subsections (a) and (b) are self-explanatory. Subsection (c) is an interesting provision: its effect is broadly to ensure that there will always be someone in the United Kingdom
who falls within s 2(2) in relation to goods purchased in England and Wales – if the product was produced in the United Kingdom, then there will be a producer in the United Kingdom. If it was produced outside the United Kingdom, then there must be an importer in the United Kingdom who
brought it in.

Question 18

Section 1(2) tells us that ‘producer’ means:

Answer 18

(a) For products that are manufactured (eg a car) – the manufacturer
(b) For products that are ‘won or abstracted’ (eg coal, which is abstracted from the ground, but
not manufactured) – the person who won/abstracted it
(c) For products to which neither of the above applies, but where the essential characteristics are
attributable to a process carried out (for example, agricultural produce – which is neither
manufactured nor abstracted, but which is the clear result of a process) – the person who
carried out that process.

Question 19

Section 2(3)

Answer 19

This provides that someone who supplied a defective product to any person will be liable for the damage caused by the defect if the person
suffering damage asks for details of the producer/importer within a reasonable time and when they cannot identify the producer/importer themselves, and the supplier fails to identity that
person.

Question 20

Example of a supplier

Answer 20

Retailer who sells products which they did not produce. If a retailer wants to avoid being liable for defects in the products which it sells under the provisions of the CPA then it needs to be able to tell someone suffering damage who produced/imported the
goods, so the person suffering damage can pursue them instead (note, however, that someone purchasing a defective item from a retailer may still have a contractual claim against the retailer).

Question 21

2.2 Who can bring a claim?

Answer 21

You might notice that neither in s 2(1) nor anywhere else in the CPA is there a description of who can bring a claim, and despite the name of the CPA referring to ‘consumer’, there is no reference/definition to consumer in the relevant provisions. However, if you revisit the explanation of the types of recoverable ‘damage’ above, you will see that, broadly, business losses cannot be recovered under the CPA. In this sense, the protection afforded by the CPA is limited to
‘consumers‘

Question 22

2.2 Who can bring a claim?

Answer 22

Note however that the effect of this approach is that the protection is not limited to people who purchased the product as would usually be the case in a contractual claim), nor even limited to
people who used the product. Anyone suffering damage as a result of the defect can sue (this is the natural interpretation of s 2(1)), and the CPA does not state anything different anywhere else).

Question 23

2.3 Defences

Answer 23

You should read this section to understand all of the defences, but perhaps the most important are that it is a defence if:

(a) ‘the defect did not exist in the product at the relevant time’ (s 4(1)(d)); or
(b) ‘that the state of scientific and technical knowledge at the relevant time was not such that a producer of products of the same description as the product in question might be expected to have discovered the defect if it had existed in his products while they were under his control’ (s 4(1)(e)).

Question 24

2.3 Defences

Answer 24

There is some argument as to whether s 4(1)(e) introduces a fault aspect ‘via the back door’. Note, however, that if a manufacturer is aware of a defect but the state of scientific/technical knowledge is such that the defect cannot be fixed, this will not be a defence to a claim. Section 4(1)(e) talks only about inability to discover, not about inability to fix.

Question 25

2.4 Exemption clauses 2.5 Limitation

Answer 25

The claim must be brought within three years from the later of: (a) The date the injury and/or damage occurred; or (b) When the claimant became aware or should reasonably have become aware of the damage (s 11A(4) Limitation Act 1980). There is a long stop of ten years after the product was put into circulation by the defendant (s 11A(3) Limitation Act 1980). This represents an absolute defence to such actions after this time. This means that sometimes the only option a claimant will have is a claim in negligence as the limitation rules for negligence are more generous

Question 26

2.6 Comparing a claim under the Consumer Protection Act and a negligence claim 2.6.1 What does this add to other areas of law?

Answer 26

Firstly, the protection is not limited to people who purchased the product (as would usually be the case in a contractual claim), nor even limited to people who used the product. Anyone suffering damage as a result of the defect can sue. Secondly, in negligence, foreseeability of harm is a necessary part of establishing a duty of care and therefore of establishing liability. This is not the case in relation to the CPA. Thirdly, the ‘causation’ requirement under the CPA is that the damage was caused ‘wholly or partly’ by the defect (s 2(1)). This is somewhat simpler than the causation aspect of a negligence claim.

Question 27

2.7 Summary

Answer 27

* A claim can potentially be brought in relation to product liability under the provisions of the Consumer Protection Act 1987. This is independent of any potential claim in negligence or for breach of contract. * Claims can be brought against the person that produced the product. * There is no need to show ‘fault’ on the part of the defendant, but the defendant may have a defence if the ‘state’ of scientific/technical knowledge meant it could not be expected to discover the defect. * Claims can be brought in relation to death, personal injury and loss/damage to domestic property.

Question 28

3 Negligence and defective products

Answer 28

The CPA provides a statutory basis for claiming in relation to damage caused by defective products but this does not replace any claim in negligence or breach of contract. So whenever faced with a problem involving a defective product, a practitioner should consider negligence, breach of contract and the CPA.

Question 29

3.1 Duty of care

Answer 29

When we are considering liability in negligence, the starting point is whether there is a precedent making clear whether or not a duty of care is owed?

Question 30

Key case: Donoghue v Stevenson [1932] AC 562

Answer 30

The case of Donoghue v Stevenson [1932] AC 562 is generally understood to mark the beginning of the modern law of negligence, but it is also a precedent for the more specific proposition that a manufacturer owes a duty of care to those people who use its products (the manufacturer of the ginger beer owed a duty of care to the claimant that ultimately consumed the beer). Note that the claimant in Donoghue v Stevenson did not purchase the beer – it was purchased by the claimant’s friend

Question 31

Stennett v Hancock [1939] 2 All ER 578 i

Answer 31

It was established that a manufacturer similarly owes a duty to a party that neither bought nor used the product, but who comes into contact with it. When considering product liability, the most likely ‘target’ is the manufacturer, but the logic of Donoghue v Stevenson extends liability to other parties involved with the product. These can be repairers, as in Haseldine v CA Daw [1941] 2 KB 343, and suppliers or distributors, where they should have inspected the product and would then have discovered the defect, eg a fitter in Malfroot v Noxal Ltd (1935) 51 TLR 551. Note that there is not an absolute duty to inspect and test every product; what is reasonable will depend on the circumstances.

Question 32

3.2 Breach

Answer 32

To assess breach of duty we must consider the standard of care to be expected of the manufacturer, and then whether the manufacturer has fallen below that standard, including considering in particular the likelihood of harm, the magnitude of harm and the practicality of precautions, assessing these based on the knowledge/accepted practice at the time of alleged breach. Whilst breach must be proved, in many cases the presence of a defect in a product will be sufficient evidence to establish breach, unless the manufacturer can show another reason for the defect

Question 33

Breach of the product in Donoghue v Stevenson

Answer 33

Would presumably have argued that the presence of a snail would be evidence of a breach of duty on the part of the manufacturer. But this does not change the fact that it is for the claimant to prove breach, the presence of a defect does not necessarily prove that the manufacturer fell below the required standard of care. In some cases, moving from proving a defect to proving breach can amount to a significant hurdle. When the defect stems from a problem in the design of the product, rather than the manufacturing process, then breach may be even more difficult to show.

Question 34

3.3 Causation

Answer 34

Causation must also be established following the usual principles. A manufacturer might argue that where goods were going to be examined at some point between the manufacture and use by the consumer, then any harm caused to the consumer is not the manufacturers responsibility. The ‘intermediate inspection’ point was clarified in Haseldine v Daw [1941] 2 KB 343, where Lord Goddard referred to a ‘reasonable probability’ rather than a ‘reasonable possibility’ of intermediate examination and the courts now work on this basis. So, the manufacturer will be held liable if they have no reason to contemplate that an intermediate inspection will occur. However, if there is a warning to test the product or to use it in a particular way, and the claimant fails to carry this out, this may be sufficient to constitute a break in the chain of causation. In Holmes v Ashford [1950] 2 All ER 76, a hairdresser failed to test a hair dye in accordance with instructions. This absolved the manufacturers from liability.

Question 35

3.4 Summary

Answer 35

* A manufacturer owes a duty of care to those who use its products or who come into contact with them. * Those repairing a product may also owe a duty, as may suppliers and distributors, if they should have inspected the product. * The loss of the product itself is rarely recoverable – this is pure economic loss. * Breach must be established in the usual way – the existence of a ‘defect’ in a product is likely to be evidence of breach but this may not be sufficient evidence in all cases. * Proving a breach in relation to the design of a product, rather than the manufacturing process, is particularly difficult. * Causation must also be established. Difficulties can arise when trying to ascertain whether goods should have been examined by manufacturer and consumer, and if so, whether this has an impact on the manufacturer’s liability.