Product Liability

Question 1

what is product liability?

Answer 1

liability for damage caused by defective products

Question 2

what are the potential causes of action?

Answer 2

1. Tort of negligence
2. Consumer Protection Act 1987 (this is a statutory tort)
3. Contract law

Question 3

explain the contract law cause of action

Answer 3

o C must have suffered loss as a result of the defective product.
o This option won’t always be possible i.e. if the claimant wasn’t the purchaser of the product or if the supplier has gone out of business.
o In this instance, C would have to rely on the tort of negligence

Question 4

what is needed to prove a negligence claim for product liability?

Answer 4

C must show that D owes a DOC which has been breached, causing damage to C that is not too remote

(i.e. standard negligence principles previously discussed)

Question 5

re: negligence claim

is there a duty of care owed between a manufacturer and consumer?

Answer 5

Yes, from the case of Donoghue v Stevenson. The ‘narrow rule’ came from this cas and applies specifically to when a duty of care will arise between a manufacturer and consumer.

The DOC covers death, personal injury, damage to other property owner by C but not the product itself (because this would be pure economic loss)

Question 6

re: negligence claim

what is the narrow rule?

Answer 6

To prove a duty of care under the narrow rule, C must prove?
o D is a manufacturer
o The item that caused the damage is a product
o C is a consumer; and
o The product reached the consumer in the form in which it left the manufacturer with no reasonable possibility of intermediate examination

Question 7

re: negligence claim

what is the definition of a manufacturer?

Answer 7

any person who works on the product in some way before it reaches the consumer i.e.:
o Repairers
o Installers
o Suppliers (on rare occasions) if they ought to reasonably inspect or test the products which they supply (i.e. because the supplier asked them to) if they knew of the defect / danger

Question 8

re: negligence claim

give an example of when a supplier was found to be a manufacturer

Answer 8

a supplier was found liable because a car’s defective steering could have easily been discovered by a competent mechanic. The supplier was under a duty to check given the car’s age and potentially serious consequences.

Question 9

re: negligence claim

what is the definition of ‘product’?

Answer 9

• ‘Product’ has been widely defined and covers pretty much anything capable of damage
• It also includes items with the product i.e. instructions, packaging, containers, labels

Question 10

re: negligence claim

what is the definition of a consumer? Give an example

Answer 10

A consumer is the person who has used the product and anyone the manufacturer should reasonably have in their mind as likely to be affected / injured by the product

o Mrs Smith is driving her daughter and her friend to school. The brakes fail due to a manufacturing defect and mount the pavement and injure a pedestrian, William. The case smashes into Jennifer’s house.
o Mrs Smith, her daughter, the friend, William and Jennifer would all be consumers.
o This is because these people could be said to have reasonably been in the manufacturer’s mind to be injured by negligence brakes because cars are driver adjacent to buildings and pavements and cars carry passengers.

Question 11

re: negligence claim

explain ‘intermediate examination’

Answer 11

If there was a reasonable probability of intermediate examination that would have revealed the defect, then no DOC will be owed by the manufacturer. However, the DOC may now be owed by the person who was reasonably expected to carry out the examination

Key points:
o A mere possibility / opportunity of an intermediate inspection will not exonerate a manufacture, they must have genuinely believed it
o An express warning may exonerate a manufacturer
o If an examination by a third party / consumer did take place but did not reveal a defect, then the manufacturer will not be exonerated
o If C it was reasonably expected C would carry out the examination and they did not, they would not have a claim.

Question 12

re: negligence claim

explain breach of duty

Answer 12

standard considerations for a normal negligence claim, but a manufacturer may be able to comply with its duty but giving adequate warnings of any danger connected with the product

Question 13

re: negligence claim

what is the difficulty with establishing breach of duty and what have the courts done to overcome this? Give an example.

Answer 13

it is hard for C to prove what went wrong in the manufacturing process for the product to be defective and the maxim of ‘res ipsa loquitur’ does not apply.

However, the courts have been prepared to infer breach if C can show that some facts which indicate something went wrong with the manufacturing process. D can rebut this is they can show something didn’t go wrong/there is another reason why C was injured

example - C suffered dermatitis. C could prove there was a chemical in the clothing and in the factory but couldn’t prove the problem in the manufacturing process. The court held that the chemical wouldn’t be in the clothing if D had taken reasonable care, as such inferring a breach

Question 14

re: negligence claim

apply the defence consent to this context

Answer 14

usual rules apply

If C is aware of the defect and uses the product anyway the D may be able to argue this defence

Remember  knowledge is not enough, they must indicate a willing acceptance of risk

Question 15

re: negligence claim

explain exclusion of liability

Answer 15

• Liability in negligence for death or personal injury cannot be excluded at all (Unfair Contract Terms Act 1977 (UCTA) and Consumer Rights Act 2015 (CRA 2015)) where liability arises in the course of a business or trade.
• Liability to non-consumers in negligence for other loss or damage can be excluded if the reasonableness test is satisfied (UCTA) or the fairness test if the claimant is a consumer (CRA 2015).

Question 16

re: negligence claim

what are the defences?

Answer 16

consent, contributory negligence and exclusion liability

Question 17

re: negligence claim

give an example of contributory negligence in this context

Answer 17

• Example > Mike buys a new hammer to do some odd jobs around the house. When he uses it for the first time, he notices that the head is rather loose, but thinks he must have imagined it since it is, after all, brand new. He therefore continues to use it. On the third such occasion, when Mike is knocking a nail into a wall, the head of the hammer falls off and injures his foot. It is unlikely that Mike’s conduct is sufficiently foolhardy to equate to him consenting to run the risk of the hammer head falling off. However, any damages Mike recovers in a negligence claim against the manufacturer would be reduced on account of his contributory negligence in continuing to use the hammer once he became aware of the danger.

Question 18

re: CPA 1987

how does CPA work alongside a negligence claim?

Answer 18

• This provides an additional cause of action but remember, C cannot recover twice for the same loss

Question 19

re: CPA 1987

what is the difference between a CPA and negligence claim?

Answer 19

The big difference between a claim in negligence and under CPA is that a claim under CPA is of strict liability.
o This means that as long as there is a defect that causes damage then C does not need to prove fault or carelessness
o This is exhibited in the A v National Blood Board case - D’s defence that the product defect was unavoidable because there was no test available at the time was not accepted.
o If therefore could be advantageous to make a claim under CPA as it is easier to satisfy than a claim in negligence

There is also a lower threshold to prove causation in a CPA claim

Question 20

re: CPA 1987

who is the claimant to a CPA claim?

Answer 20

• Anyone who has suffered damaged caused by a defect in a product can sue under CPA. The class of claimants is therefore very wide – it is not just limited to the buyer or direct user of the product

Question 21

re: CPA 1987

what is ‘damage’ under the CPA?

Answer 21

There has to be claimable damage, this includes:
o Personal injury or death  this is without a financial limit and includes physical and mental conditions
o Personal property that exceeds the value of £275
o This does not include business property (i.e. product that are used wholly or mainly for the purposes of business)

Question 22

re: CPA 1987

what loss cannot be claimed under CPA?

Answer 22

o They also cannot claim for the product itself as this would be pure economic loss

Question 23

re: CPA 1987

what loss can be claimed under CPA?

Answer 23

Consequential losses are recoverable i.e. C is injured and breaks their arm. They are then unable to work and lose income, this loss of income would be recoverable.

Question 24

re: CPA 1987

explain causation in this context

Answer 24

• C has the burden of proof and the usual but for test applies, however it is a lower threshold
• C only has to show that the product defect caused the damage i.e. ‘but for the product defect, the damage wouldn’t have happened’
  o Whereas, in a negligence claim, the test is ‘but for D’s breach of duty, the damage wouldn’t have happened’

Question 25

re: CPA 1987 what is the position regarding remoteness of damages?

Answer 25

The issue of remoteness is not addressed in the CPA, therefore it is not clear whether it does or does not apply. o If it does not apply, then in theory C would be able to recover damage without limit o However if it does apply, then as this is a tort of strict liability, the direct consequences test (Re Polemis) would probably apply rather than Wagon Mound

Question 26

re: CPA 1987 what is a 'product' under CPA?

Answer 26

* widely defined under CPA - ‘‘any goods or electricity and... includes a product which is comprised in another product whether ... a component ... or raw material’ * Blood was also included (see: A v National Blood Authority below)

Question 27

re: CPA 1987 what is a 'defect' under CPA?

Answer 27

* Defective in the CPA is defined as ‘unsafe’ i.e. that safety of the product is not such as persons generally are entitled to expect

Question 28

re: CPA 1987 what factors are considered when deciding if something is unsafe?

Answer 28

* When deciding whether something is unsafe, there are some factors to take into account: o The presentation of the product i.e. packaging, instructions, warnings o What the expected use of the product is o The age of the product in question

Question 29

re: CPA 1987 who is the defendant?

Answer 29

* the manufacturer of a the product. Or, if it is a faulty part rather than the whole thing, the manufacturer of that part * If someone holds themselves out to be the producer they can also be liable i.e. ‘own-branders’ if Sainsburys was to put their name on own brand baked beans, even though they didn’t manufacture them * importer who imports from outside the UK into the UK * A 'forgetful supplier' i.e. suppliers are not normally liable, however if the claimant is unable to identify one of the above in the supply chain, then they are allowed to bring the claim against the supplier

Question 30

re: CPA 1987 what defences are available?

Answer 30

o Defect was attributable to compliance with legal requirements o D did not supply the product to another o D supplied to product otherwise than in the course of business o The defect did not exist when D supplied the product o Manufacturer of parts and defect is attributable to design / instructions o Development risks o Contributory negligence o Consent

Question 31

re: CPA 1987 what defence is not available?

Answer 31

* NB: exclusion of liability does not apply. Under CPA D cannot exclude or limit their liability in any way.

Question 32

re: CPA 1987 explain the defence 'defect was attributable to compliance with legal requirements'

Answer 32

* Compliance with a legal requirement will absolve a producer from liability if the defect was an inevitable result of compliance

Question 33

re: CPA 1987 give an example of the defence 'D did not supply the product to another'

Answer 33

i.e. a thief breaks into a factory and steals a batch of toys which contain defects. A child of the there is subsequently injured when playing with the toy. The manufacturer has not supplied the toy to the thief (or child) and therefore could rely on this defence

Question 34

re: CPA 1987 give an example of the defence 'D supplied to product otherwise than in the course of business'

Answer 34

* i.e. if a product is sold by one friend to another

Question 35

re: CPA 1987 explain the defence 'the defect did not exist when D supplied the product'

Answer 35

* If D can provide that the defect was caused by misuse of the product or fair wear and tear then the defence will succeed

Question 36

re: CPA 1987 explain the defence 'manufacturer of parts and defect is attributable to design / instructions'

Answer 36

* The manufacture of component parts will not be liable for a defect in the finish product if the defect is wholly attributable to the design of the finished product of compliance with instructions given by the manufacturer of the finished product

Question 37

re: CPA 1987 explain the defence 'development risks'

Answer 37

* This is particularly relevant in pharmaceuticals * D must prove that the state of knowledge at the time the product was supplied amongst producers of the product in question was that the defect was not known * A v National Blood Authority confirms that the defence applies only to defects/risks that could not be foreseen o This defence didn’t help D because the risk of blood infection was known, but nothing could be done about it

Question 38

re: CPA 1987 what will D be judged against in relation to the defence of 'development risks'

Answer 38

* D will be judged against the highest standard of knowledge i.e. they must show that they could not have discovered the defect via information accessible anywhere in the world o It is therefore rare to successfully argue this defence

Question 39

re: CPA 1987 give an example of contributory negligence in this context

Answer 39

* Example  Bethan buys a new electric blanket and leaves it switched on in her bed one evening when she goes out to visit a friend. The blanket has been negligently manufactured and, as a consequence, catches fire. Bethan returns home to find her house has been destroyed in the resulting fire. It is likely that the blanket is defective under the CPA 1987, but there would be a finding of contributory negligence against Bethan in these circumstances, to the extent that her carelessness has caused or contributed to the damage she has suffered.