#3078 - Product Liability - GDL Tort Law

Historical Background

- Product liability: consumer sues manufacturer for defective goods causing damage.

- Sources of law.

• civil law: contract + tort.

• criminal law: Consumer Protection Act 1989 (Part 3) – criminal offence to sell defective goods

  • enforced by Trading Standards Officers (TSOs).

• EU law.

- Liability for defective products: contract law, law of tort, statutory provisions.

• contract law: limited by privity of contract (although Contract (Rights of Third Parties) Act 1999).

  • statutes: Sale of Goods Act 1979; Sale and Supply of Goods Act 1995; Supply of Goods and Services Act 1982.

  • advantage over tort:

    • 1. no damage needed (product simply defective);

    • 2. no need to prove fault;

    • 3. pure economic loss claims allowed;

    • 4. implied terms used.

• law of tort: not subject to privity.

- Tort: 2 causes of action for product liability.

• common law negligence: still used where statute deficient (e.g. limitation period expired).

• Consumer Protection Act 1987 (Part 1): preferred – imposes strict liability (no need to prove fault).

Liability at Common Law

1. Damage: what to claim for.

- Damage required for tortious liability.

• merely defective goods: poor functioning/low quality – contract law.

• dangerous goods: damage from a defect – tort law.

- Type of damage: PI + consequential economic loss (but not pure economic loss).

• not pure economic loss: damage to property itself – Muirhead v Industrial Tank Specialities Ltd [1986].

  • value of defective product pure economic loss – Murphy v Brentwood DC [1991].

• but: complex structure theory may apply: damage by one part of product to another part recoverable – Aswan Engineering Establishment Co v Lupdine Ltd [1987]: defective plastic buckets melt + damage compound packaged inside obiter: claim possible (but failed for remoteness).

- Type of product: most goods, packaging, labelling, instructions/warnings.

• proportional: more complicated/dangerous product more warnings reasonable.

• Kubach v Hollands [1937]: manufacturer of chemicals warned supplier; supplier supplied to school without warning; child injured supplier liable: had failed to pass manufacturer’s warnings on.

• Haseldine v CA Daw [1941]: lift = product.

• Andrews v Hopkinson [1957]: car = product.

2. Duty of Care

- Manufacturer owes ultimate consumer duty to take reasonable care – Donoghue v Stevenson [1932].

• narrow ratio: [Ld Atkin]: ‘manufacturer of products, which he sells in such a form as to show that he intends them to reach the ultimate consumer in the form in which they left him with no reasonable possibility of intermediate examination and with the knowledge that the absence of reasonable care in the preparation or putting up of the products will result in an injury to the consumer’s life or property, owes a duty to the consumer to take reasonable care’.

- Wide application.

• who can sue: ultimate consumer – anyone who ought to be foreseen as being affected, not just user – Brown v Cotterill [1934].

  • Stennett v Hancock [1939]: pedestrian plaintiff hit by part of wheel from lorry allowed to claim.

  • Barnett v H & J Packer & Co. [1940]: shopkeeper.

• who can be sued: manufacturer – inc. all those who may have been involved with product.

  • repairers:

    • Haseldine v CA Daw [1941]: plaintiff fell down lift shaft lift repairers liable.

    • Stennett v Hancock: repairer of defective lorry liable.

  • suppliers/distributors: (if should have inspected + would have discovered defect).

    • Malfrotts v Noxal Ltd [1935]: fitter liable.

    • Watson v Buckley [1940]: suppliers of hair dye liable.

  • assemblers: Howard v Furness, Houlder Ltd [1936].

  • second hand dealers: Andrews v Hopkinson [1957]: 2^nd-hand car dealer sold defective car without properly checking steering liable (defect easily discoverable by mechanic; danger of defective steering reasonable to expect d. to check or inform consumer that not checked).

  • BUT: no absolute duty to inspect every product – only reasonable: dep. on circs (esp. dangerous goods more checks).

3. Breach: normal principles of negligence apply.

- Standard of care: reasonably competent manufacturer.

• Abouzaid v Mothercare (UK) Ltd [2001]: sleeping bag attached to pushchair faulty CoA: manufacturer not liable in common law – risk of injury small + did not warrant additional steps.

• ‘state of the art’ principle: d. judged in light of knowledge available at time of manufacture.

  • Roe v Minister of Health [1954]: anaesthetic stored in glass phial contaminated (unknown risk) not liable – [Ld Denning]: ‘must not look at 1947 accident with 1954 spectacles’.

• but: warning/recall as soon as d. knows/should know – dep. on seriousness/danger.

  • Wright v Dunlop Rubber Co. Ltd [1972]: d. knew tyre model defective; did not recall liable: should have recalled as soon as aware.

- Breach: claimant must prove.

• v. difficult: lack of knowledge of process + product passes through many hands.

  • Evans v Triplex Safety Glass Co Ltd [1936]: c. bought Vauxhall car fitted with safety glass windscreen; 1 year later windscreen shattered during driving injuring occupants d. not liable: c. could not prove d’s fault that windscreen smashed (could be assembler/fitter etc.)

• but: c. does not necc. need to prove where defect occurred in process.

  • Carroll v Fearon [1998]: c. injured because of defective car tyre; d. argued c. had to prove where defect occurred in production CoA: d. liable – c. only had to prove defect present when left factory.

4. Causation: link/nexus between defect + c’s injury – intermediate inspection may break chain.

- Reasonable possibility of intermediate inspection: may break chain if should have taken place + did not.

• Donoghue principle: only applies to products which reach ultimate consumer with no possibility of intermediate inspection.

• must be reasonable – Grant v Australian Knitting Mills Ltd [1936]: defective underpants caused dermatitis; manufacturer argued inspection possible (not in sealed packet) liable: [Ld Wright]: irrelevant that not sealed – reached consumer with same defect as when left manufacturer + no warning.

• ‘reasonable probability’ needed: manufacturer liable if no reason to contemplate immediate inspection will occur – Haseldine v CA Daw: [Ld Goddard].

• but: NAI if claimant aware of danger or ignores instructions/warnings (i.e. unforeseeable use).

  • Holmes v Ashford [1950]: hairdresser failed to test hair dye as instructed d. not liable.

  • Farr v Butters Bros [1932]: d. crane makers sent out defective parts for assembly; c. experienced foreman realised parts missing but assembled anyway; c. died d. not liable.

5. Remoteness: reasonably foreseeable type of damage – The Wagon Mound (No 1) [1961].

• extent/magnitude irrelevant – Vacwell Engineering Co Ltd v BDH Chemicals Ltd [1971].

6. Defences available to manufacturers.

• 1. claimant fully appreciated danger – Farr v Butters Bros.

• 2. misuse of product: c. uses product in unforeseeable way/for unforeseeable purpose.

• 3. adequate warning – Kubach v Hollands.

• 4. product not defective at time of supply.

Statutory Liability: The Consumer Protection Act 1987 (Part 1)

- CPA 1987: supplemental basis of liability for defective products – does not preclude common law claims.

• 1 March 1988: came into force – to comply with EU Directive (No 85/374/EEC): to harmonize EU law (prevent distortion of competition/free movement of goods) + protect consumers.

• strict liability on producer of product causing PI or property damage: c. need not prove d. at fault.

  • rationale: easier for claimants – A & others v National Blood Authority & another [2001].

• but: not absolute liability – specific defences available.

- Who can sue?: consumer – anyone who suffers damage as result of defect (not necc. purchaser/consumer).

• s2(1): liability in respect of any damage caused wholly/partly by defect; no need to show foresight.

- Who can be sued?: producer – s2(2)(a)-(c).

• s2(2)(a): producer – defined in s1(2):

  • s1(2)(a): manufacturer;

  • s1(2)(b): anyone who has won/abstracted the product (e.g. farmer/miner);

  • s1(2)(c): processor of goods (changes essential characteristic – e.g. packager, canner).

• s2(2)(b): own-brander – anyone using a trademark or holding self out to be producer.

• s2(2)(c): importers into the EU.

• liability of supplier (wholesalers, retailers, repairers) – only if: c. does not know who producer is + supplier does not identify ‘producer’ within reasonable time of being asked – s2(3)(a)-(c).

- Product: wide definition – s1(2).

• product: s1(2): ‘any goods or electricity and … inc. any product which is comprised in another product, whether by virtue of being a component part or raw material or otherwise’.

  • goods: s45: inc. ‘substances, growing crops and things comprised in land by virtue of being attached to it and any ship, aircraft or vehicle’.

  • EU Directive 99/34 (imp. Dec 2000): inc. all agricultural goods (inc. raw food).

• wide-ranging definition: e.g. blood included (A v National Blood Authority) – but some limits:

  • e.g. buildings not covered but component parts are – s46(3).

  • pure information: not intended to be covered, but not yet tested (e.g. contents of book).

- Defective: s3.

• defective: s3(1): product does not provide safety which persons generally entitled to expect.

• factors: s3(2): how to determine what is a person entitled to expect?

  • (a): presentation + marketing: e.g. packaging, use of marks, warnings, instructions etc.

    • Richardson v LRC Products Ltd [2000]: condom failed; c. pregnant manufacturer not liable: had not claimed product 100% effective + risks commonly known.

    • Worsley v Tambrands Ltd [2000]:...