Product Liability Flashcards
How does the Consumer Protection Act 1987 operate?
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.
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.
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.
Under the CPA 1987, who can be liable for damage?
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.
Section 1(2) tells us that ‘producer’ means:
(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.
The provision mentioned above is bolstered by s 2(3). 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.
An example of a supplier would be a 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).
The result of all these provisions is that more than one person could be liable for the same damage under the CPA. If so, they will be jointly and severally liable (s 2(5)).
Who can bring a claim under the CPA 1987?
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‘.
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).
This approach has some consequences that might not be obvious. For example, assume that a product is intended solely for business use, it is marketed in that way, it is purchased by a business and it is used by that business. If, in the course of such use, the product damages a consumer’s property due to a defect in that product, then that consumer can bring a claim under
the CPA – despite the whole manufacture, supply and use of the product being business-orientated.
What defences are available for product liability?
If the application of the provisions already addressed points to a party being liable, that party can avoid that liability if one of the defences set out in s 4 of the CPA applies. 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)).
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. Under s 6(4) contributory negligence is available as a defence.
Section 7 prohibits any exclusion or limitation of liability under the provisions of the CPA.
What limitations is the CPA 1987 subject to?
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.
For example, suppose a product damages a claimant’s property but that damage is not
immediately obvious. Under the CPA , the claimant has three years from the time at which he ought to have known of the damage. However, where the loss is anything other than personal injury (here we have property damage), the tort of negligence allows six years.
How does the CPA 1987 compare to a negligence claim?
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.
Note also the point made above in relation the difference between s 3(1) and the standard of care in negligence.
What is the duty of care owed for negligence regarding product liability?
So the manufacturer owes a duty not only to the final purchaser at the end of the supply chain, but also to other users of the product.
In Stennett v Hancock [1939] 2 All ER 578 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.
When the loss being considered is the loss of the product itself (so cost of replacement is sought), this is pure economic loss. This is not, generally, recoverable.
What is a breach of duty for negligence claim concerning product liability?
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. For example, the claimant in Donoghue v Stevenson 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, and 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.
