#3550 - Product Liability - Tort Law

Product Liability

• Generally

• Development: prior to Donoghue, liability restricted due to privity but Lord Macmillan asserted priority of negligence over privity rule liability regularly imposed on manufacturer since Donoghue calls for strict liability as in US + Pearson Commission recommendation EC issued Directive 85/374/EEC requiring harmonisation of product liability laws UK adopted a form of strict liability for PL.

• Consumer Protection Act 1986- additional liability on manufacturer where damage is caused by defect in the product.

• Liability extends to consequential damage only (property/PI) – no assessment with ref. to purchase price, value or damage done to the product.

• Damage to ‘commercial property’ isn’t covered (s2(3) CPA)

• Justification for Imposing Strict Liability

1. Efficiency based considerations based upon insights of economic analysis - producers are able to spread the risk of damage through adoption of insurance/pricing + are best placed to minimise the risk of damage by taking precautions at design/manufacturing stages of production

• But could challenge by saying they load excessive costs of precaution on manufacturers, stifling innovation and possibly leading towards ‘insurance crisis’

• Validity of economic argument for harmonisation of PL through a directive has been questioned -prior, all MS had laws concerning PL and it was far from clear what effects upon producer prices would come from moving to general strict liability regime. Even on assumption that it might have significant impact on prices, Dir. as drafted is unlikely to level out the conditions of competition, since it doesn’t seek to harmonise remedies available to consumers in various MS.

• Level of damages payable is left up to MS - it is possible, not obligatory, to impose a maximum limit of 70mln. Euros.

• Directive allows MS to include/exclude agricultural products &game (UK included the former in 2000).

• MS can make provisions for own ‘state of art’ defence where producer will be exempt if it’s shown that defect couldn’t have been discovered given the state of scientific/technical knowledge at the time it was put into circulation.

• It permits but doesn’t require the use of contributory negligence as a defence.

2. Stapleton’s ‘moral argument-if, in seeking financial profit, enterprise causes certain types of loss, it should be legally obliged to pay compensation to the victim’ this idea links most areas of strict liability in tort, although it doesn’t explain all aspects of modern PL law

• Justification for the 1985 Directive

• Preamble argues a different liability regimes b/w MS may distort the market by subsidising producers in some states & penalising others, so liability w/out fault on the part of producer is the sole means for adequately solving the problem, peculiar to the age of increasing technicality & fair apportionment of risks inherent in modern technological production.

• Objects of PL

1. compensation of consumer

2. consumer protection – public & individual safety: behaviour control: regulation

3. need to balance economic policy

4. wealth redistributiona very stretched out one?

• CPA 1987

• Provided rights over & above those @ commonlaw of tort & contract w/out removing protection offered by it. But, due to ltd scope, C may still sometimeshave to frame his cause of action in negligence/breach of contract instead.

• In A v National Blood Authority, Burton J declined to engage in detailed interpretation of the Act stating it was better to go straight to Directive itself.

• Arnull (2001): this goes further than required by ECJ - could be taken to imply that, whatever the national implementing legislation may be, English courts will always give effect to requirements of Directive.

  1. Who may be liable? - s2(2)

1. Producer

2. Own brander -someone who, by putting their name or using trademark, holds himself out to be the producer

• liability depends on nature of the mark

3. Importer -imports in the course of business & for purpose of ‘supply’ as defined in s46 – applies only to 1^st importers into EU

4. Supplier- mere supply of goods insufficient; however, if conditions in s2(3) are satisfied, may be liable.

• no liability attaches if can identify one of the three persons above (then consider liability under SGA 1979l i.e. goods have to fit w/description etc.)

  1. ‘Product’ s1(2)

• Goods (incl. ‘substances, growing crops, things comprised in land by virtue of being attached to it& any ship, aircraft, vehicle’ and product comprised in another product (s45))

• all movables/goods/electricity,even if incorporated into another movable/immovable

• agricultural products were excluded from unless undergone ‘industrial process’, but after Modification Order 2000 extends to primary agricultural products

  1. Meaning of ‘Defect’

• There’s scope for C to succeed under CPA where he couldn’t under negligence & defectiveness is likely to be easier to prove in simple, more mechanical cases. But it’s true that regime isn’t full strict liability one.

• Test: the public’s as a whole legitimate expectation as to safety of the product (not whether producer took reasonable care to ensure safety!)

• Steel: interpretation of defectiveness is crucial and if the definition of defect proves to be capricious or anomalous, the resulting regime will only be defensible on the grounds of being a ‘compromise’

• Relevance to avoidability of defect in assessing defectiveness

1. Taken into acc & pointed towards concluding product was defective

• ImanAbouzaid v Mothercare[2001] - C injured by the buckle of elastic trap used to fasten one of the products, producer could have done more to prevent the accident (one of factors why product defective). No development risks defence could arise b/c a simple test could show defect existed at the time of manufacture & the risk wasn’t outside the scope of reachable knowledge.

• NB: negligence claim would have failed b/c risk of injury was small & reasonable manufacturer would have failed to recognise it

2. Not a relevant consideration in assessing defectiveness

• A v National Blood Authority[2001] -Cs infected by blood transfusion; blood collected from donors and, although risk of infection known, it was impossible to avoid b/c no test could detect the virus. Cs arguedthis equated w/supply of defective product causing damage under CPA. D argued unavoidability of risk was a factor to be considered in determining defectiveness. Art 6 specifies that safety which persons are entitled to expect is assessed taking ‘all circs into acc’ but Burton J rewrote this as ‘all relevant circs’, excluding factors such as care taken by producer, product’s utility, and (most crucially!) avoidability of defect. Held it must be asked whether risk that some batches of transfused blood would be infected was known to the public & socially acceptable. Blood was defective b/c: Art 6 of Dir. refers to what the public is entitled to expect and so their expectation of clean blood wasn’t unreasonable, even though docs knew it couldn’t be attained + unavoidability of risk wasn’t relevant + these were non standard products (infected bags weren’t the same as all other bags and, whilst non infected ones were standard products, infected ones weren’t.

• Hodges: BurtonJwrong to conclude avoidability of risk wasn’t, as a matter of law, relevant Art.6 consideration. Directive explicitly states “all considerations” are to be taken into acc. It’s necessary for court to consider, evaluate & balance all circs b/f applying Art.6 ‘expectation test’. In doing so, it must decide how much weight must be given to each circumstance.

3. Utility of the product + inevitability of risk led court to conclude potentially harmful characteristics didn’t amount to defects

• Bogle v McDonalds [2002] – each C injured by spillage of hot tea/coffee served at McDonalds. D held not to be liable under 1987 Act or negligence.

• Contrast w/US case where C got substantial damages for scalding injuries sustained when hot coffee sold at McDonalds drive through restaurant spilt on her lap

• Tesco Stores v Connor Frederick Pollock [2006] – C, aged 13 months, became seriously ill after swallowing dishwasher powder from plastic bottle bought from 1^st D, Tesco. C argued bottle too easily opened & child resistant cap wasn’t proper. Evidence showed ‘squeeze & turn” cap required considerably less resistance than a cap meeting Brit standards but there no legal standard requiring all bottles to have such lids. Laws LJ held LE was merely that child resistant cap would be harder to open than ordinary screwtop but not as difficult to open as Brit standards required. So no breach of 1987 Act.

• Nedwick – advantage of this approach for the individual is likely to be that liability turns on existence of defect alone. Unlike in negligence, no question of foresight of danger or precautions taken to avoid it arises for consideration.

• Stapleton – the concept of defectiveness wouldn’t operate very differently from negligence standard. On examination, central concepts of Dir., such as cost/benefit assessments and development risks defence aren’t only inconsistent w/theoretical arguments used to justify reform but also poorly thought through, so that it’s debatable whether liability under Dir. will have much wider scope than negligence regime. Even where Dir. provides a remedy where negligence wouldn’t it can be criticised for generating unattractive anomalies in remedies.

  1. Standard and non standard products

• 2 questions before applying legitimate expectation test (Burton J)

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