Product Liability

Question 1

Can a party bring a claim on the basis of both negligence and the Consumer Protection Act 1987?

(a) 
No

(b) 
Yes

Answer 1

(b) 
Yes

Question 2

The Consumer Protection Act 1987 aimed to introduce a strict liability regime, meaning:

(a) 
A regime which increased the protections available to consumers, beyond those under the general rules of negligence.

(b) 
A regime where parties could be found liable without it being necessary to show fault on their part
(c) 
A regime which applies to all manufacturers / producers.

(d) 
A regime which holds a manufacturer strictly liable for all losses which it causes, regardless of the normal rules on remoteness.

Answer 2

(b) 
A regime where parties could be found liable without it being necessary to show fault on their part

None of the other explanations reflect the meaning of ‘strict liability’, although it is true that the Act aimed to increase the protections available to consumers, beyond those under the general rules of negligence.


Question 3

Under the Act, liability potentially arises in relation to damage caused by a ‘defect’ in a product. A product is defective if it…

(a) 
causes loss other than by the negligence / carelessness of the user.

(b) 
is not fit for the purposes for which it is being used.

(c) 
is not as safe as people are generally entitled to expect
.
(d) 
is not fit for the purpose for which it was designed.

Answer 3

(c) 
is not as safe as people are generally entitled to expect


Question 4

A pharmaceutical company produces medication for a rare blood disorder. The medication is subsequently found to be defective causing serious side effects to its consumers. At the time the product was produced the state of scientific and technical knowledge was not such that would have enabled the medication to be produced without the side effects. Can the company rely on this as a defence under the Consumer Protection Act 1987?

(a) 
The defence under s4(1)(e) CPA 1987 could only be relied upon if the company could show that the side effects caused were not reasonably foreseeable.

(b) No, there are no defences to a claim under the CPA 1987.

(c) 
Yes, the defence under s4(1)(e) CPA 1987 could be relied upon.

(d) 
No, the defence under s4(1)(e) CPA 1987 only applies where the state of scientific and technical knowledge was not such that the defect could have been discovered.

Answer 4

(d) 
No, the defence under s4(1)(e) CPA 1987 only applies where the state of scientific and technical knowledge was not such that the defect could have been discovered.

Section 4(1)(e) refers to an inability to discover, not an inability to fix. 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.

Question 5

Can exemption clauses exclude or limit liability for claims under the CPA 1987?

(a) 
Exemption clauses can only exclude or limit liability for property damage under the Act

(b) 
Yes. It is possible to exclude and limit liability under the Act.

(c) 
No. It is not possible to exclude or limit liability under the Act.

(d) 
Exemption clauses can only exclude or limit liability under the Act to the extent that it is reasonable to do so.

Answer 5

(c) 
No. It is not possible to exclude or limit liability under the Act.


Question 6

John buys a drying machine (for drying clothes). The drying machine catches fire during normal use, damaging the house owned by him and his wife (the damage exceeds £2,000). The attendance of the fire service stops customers attending a sandwich shop next door, and so the sandwich shop suffers a substantial loss of profits. Who can potentially bring a claim under the Act?

(a) 
Just John.

(b) 
No party can claim.

(c) 
John and his wife
(d) 
John, his wife and the sandwich shop.


Answer 6

(c) 
John and his wife

John can claim because he has suffered property damage in excess of £275 and the property is intended for private use. His wife can claim because she has suffered property damage in excess of £275 and the property is intended for private use – it doesn’t matter that she didn’t purchase the product. The sandwich shop cannot claim – it has not suffered death, personal injury or damage to any property (even if it had suffered damage to any property it is unlikely that property would have been intended and ordinarily intended for private use).


Question 7

Donoghue v Stevenson [1932] AC 562 is authority for the proposition that a manufacturer owes a duty of care to those people who use its products. Does a manufacturer owe a duty to a party that neither bought nor used the product, but who comes into contact with it?

(a) 
Yes

(b) 
No

Answer 7

(a) 
Yes


Question 8

Applying the rules of negligence, can a party recover in negligence in relation to the loss of the product itself?

(a) 
Yes – this loss is highly foreseeable.

(b) 
No – this would ordinarily be considered pure economic loss, and not recoverable.

(c) 
No – this sort of loss is rarely foreseeable.

(d) 
Yes – the loss of the product is property damage.

Answer 8

(b) 
No – this would ordinarily be considered pure economic loss, and not recoverable.


Question 9

When assessing whether a manufacturer has breached any duty owed, the key question is…


(a) Whether the products reached a reasonable standard.

(b) 
Whether the manufacturer could foresee harm being caused by the product.

(c) 
Whether the manufacturer failed to produce a product which meets the expectations of a reasonable man.

(d) 
Whether the manufacturer fell below the standard of a reasonably competent manufacturer.

Answer 9

(d) 
Whether the manufacturer fell below the standard of a reasonably competent manufacturer.

The focus has to be on the manufacturer, rather than on the product – this is perhaps a difference between liability in tort and liability under the Consumer Protection Act 1987. Foreseeability of harm is not enough to show breach.

Question 10

Do you have to show fault on part of D under CPA 1987?

Answer 10

Successful claim in negligence requires C to show fault on part of D - act aimed to introduce strict liability regime and so parties can be found liable without it being necessary to show fault on their part

Question 11

What is the definition of a product?

Answer 11

Any goods or electricity and includes product which is comprised in another product, whether by virtue of being component part or raw material or otherwise

Ie any goods - and smth which is included as component or raw material in smth else is still product

Eg computer chip is still a product, even once it becomes part of a computer. Plastic sheeting is still a product, even once it has been moulded into a toy.

Question 12

What is the definition of a defect?

Answer 12

‘There 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’

Whether or not smth is defective depends on what people are generally entitled to expect - people’s expectations of the safety of children’s toys are not going to be same as their expectations for power tools for DIY

Question 13

What factors should be considered when setting out expectations of people in a product’s safety?

Answer 13

• Manner/purposes for which it has been marketed eg we would expect cutlery marketed as suitable for young children to be safer than that marketed for adults
• Way in which product is described on packaging and any warnings that accompany product are potentially relevant to what people are entitled to expect
• What might reasonably be expected to be done with/in relation to product eg it would not be reasonable to use microwave to dry wet dog
• Time when product was supplied by producer to another eg at one time, mobile phones were rarely purchased for children but now common - expectations may therefore have changed over time - also some products might be safe when put into circulation but deteriorate over time to become less safe

Question 14

What is the difference in standard of care under CPA and negligence?

Answer 14

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.

Question 15

What is the definition of damage and what types of damage are recoverable?

Answer 15

Damage = death or personal injury or any loss or damages to any property (including land)

Most types of loss count as damage within meaning of act but NOT pure economic loss - no claim can be brought for loss of product itself or any product supplied with defective product as part of it

Two further limits:
1. No claim can be brought in relation to damage to property unless sum to be awarded exceeds £275, excluding interest
2. No claim for damage to property can be brought unless property is ordinarily intended for private use/occupation/consumption and intended by person suffering loss or damage mainly for his own private use/occupation/consumption

Question 16

Who can be liable for damage?

Answer 16

1. Producer of product
2. Any person who, by putting his name on product or using trade mark or other distinguishing mark in relation to product, has held himself out to be producer of product
3. Any person who has imported product into UK from place outside UK in order to, in course of any business of his, to supply it to another

Question 17

What is the definition of producer?

Answer 17

1. For products that are manufactured eg car - the manufacturer
2. For products that are won or abstracted (eg coal) - person who won/abstracted it
3. For products to which neither of above applies, but where essential characteristics are attributable to process carried out (eg agricultural produce) - person who carried out that process

Provision above bolstered by s. 2(3) - provides that someone who supplied defective product to any person will be liable for damage caused by defect if person suffering damage asks for details of producer/importer within reasonable time and when they cannot identify producer/importer themselves, and supplier fails to identify that person

Question 18

Can more than one person be liable for the same damage under CPA?

Answer 18

Yes more than one person could be liable for same damage under act - if so, they will be jointly and severally liable

Question 19

Who can bring a claim?

Answer 19

Broadly, business losses cannot be recovered under act so act is limited to consumers

Note: effect of this approach is that protection is not limited to people who purchased product as this would usually be case in contractual claim, nor even limited to people who used product. Anyone suffering damage as result of defect can sue and act does not state anything different.

Question 20

What defences are available under CPA?

Answer 20

1. Defect did not exist in product at relevant time
2. State of scientific and technical knowledge at relevant time was not such that producer of products of same description as product in question might be expected to have discovered defect if it had existed in products while they were under his control (it only talks about inability to discover, not inability to fix)
3. Contributory negligence

Question 21

What about exemption clauses?

Answer 21

Prohibits any exclusion or limitation of liability under provisions of act set out in this element

Question 22

What is the limitation to bring claim under CPA?

Answer 22

Claim must be brought within three years from the later of:
1. Date injury and/or damage occurred OR
2. When C became aware or should reasonably have become aware of damage

Long stop of 10 years after product was put into circulation by D - represents absolute defence to such actions after this time and means that sometimes only option that C will have is claim in negligence whose limitations rules are more generous

Question 23

Negligence and defective products - duty

Answer 23

When liability in negligence: is there precedent making clear whether or not duty is owed?

So manufacturer owes duty not only to final preacher at end of supply chain but also to other users of product

Most likely target is manufacturer but Donoghue extends liability to other parties involved with product - these can be repairers, supplier or distributors, where they should have inspected product and would then have discovered defect

There is not absolute duty to inspect and test every product - what is reasonable will depend on circumstances

Question 24

Is pure economic loss recoverable?

Answer 24

When loss being considered is loss of product itself, this is pure economic loss and not generally recoverable

Question 25

How is breach analysed?

Answer 25

Must be analysed in same way eg by considering standard of care to be expected of manufacturer and then whether manufacturer has fallen below that standard

Whilst breach must be proved, in many cases presence of defect in product will be sufficient to establish breach, unless manufacturer can show reason for defence

When defect stems from problem in design of product, rather than manufacturing process, breach may be even more difficult to show

Question 26

How is causation analysed?

Answer 26

Must be established through usual principles

Manufacturer might argue that where goods were going to be examined at some point between manufacture and use by consumer then any harm caused to consumer is not manufacturer’s responsibility

‘Intermediate inspection’ point clarified in Haseldine v Daw: ‘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’s warning to test product or to use it in particular way, and C fails to carry this out, this may be sufficient to constitute break in chain of causation