Defective Product Liability
Defective product liability is a potentially big issue for any business involved in selling products and there are now insurance policies available for such liability.
The potential liabilities extend much further than simply the manufacturer of a product and also include the distributor. Liability under English law may be established not only at common law for negligence but also statutorily under the Consumer Protection Act.
Take a recent example – as has been publicised, several children have apparently tragically died in the USA after drinking energy drinks. Whilst it is far from a foregone conclusion that the drinks are inherently unsafe, it is likely there may be litigation, and this is a product which is available in almost every supermarket, so product liability insurance should be high on the list of potenmtail insurance policies considered by any seller.
Of relevance from a legal perspective are also the following points under English law.
If it is can be established that a product was defective and the user suffered loss as a result, the producer will be liable. Fault or negligence does not have to be proven. However, like other torts (negligence, for example), it has to be shown that there was a ‘causal’ link between the loss or harm caused.
What is a defective product?
Product liability is defined by the Consumer Protection Act 1987 but a claim for common law negligence may also be made. Products covered by the Act include general consumer goods, products used by businesses, components and pharmaceutical products.
A product is defective where it did not meet the reasonable expectations of the person using it at the time the product was supplied. This is balanced against the use the product was intended for; how it was actually used and the instructions and warnings that were supplied with the product.
What can be claimed for defective products?
The key thing that needs to be shown is that the product actually caused loss or harm. This can be defined as death, personal injury or damage to private property.
There are two kinds of awards for damages in the context of product liability: general damages awarded for ‘pain, suffering and loss of amenity’ and special damages awarded for financial loss and expenses incurred as a result of the injury, which potentially includes costs of care, lost earnings etc.
The aim of the civil law is to, as much as possible, place those who have suffered loss in the same position had the event not taken place.
What legal defences are available to producers?
The producer can use the development risk/state of the art defence if it can be shown that the technical know-how or knowledge at the time the product supplied was not sufficient enough to discover the defect. As there is there is no element of negligence in strict liability, no element of reasonableness comes into play i.e. asking whether a reasonable producer would have taken steps to acquire existing knowledge.
Who can be sued for defective products?
The producer is usually liable for defective product. If the product is manufactured by one company and branded by another, the branding company may also be joint liable if they put their name on the product and brand in such a way as to make the consumer think they produced it. If the product is manufactured outside the EU, then the importer will be liable.
How long to make a claim?
Claims must be bought within three years of the injury or damage caused by the defective products or within three years of when the consumer discovered the injury. Asbestos, for example, does not appear to cause injury for many years.