19. Remedies and product liability

Question 1

2 main remedies

Answer 1

1. Monetary damage
2. Restitution to the original position

Question 2

Monetary damage

Answer 2

pecuniary compensation amounting to the value of the loss suffered by the plaintiff (the loss sustained and the lost profits resting on causation)

Question 3

Restitution to the original position

Answer 3

the restoration to the situation the plaintiff would have been in, had the fact grounding tortious liability not occurred.

• When it is materially feasible
• When it is not too burdensome (costly) for the debtor

Question 4

Compensatory damages

Answer 4

A type of monetary damage

• Purpose: help the victim recover what was lost
• Idea of tort liability as based on compensation and distributive justice
• The injured party must prove the suffered damage

Aims to restore the initial situation, nothing more nothing less

Question 5

Punitive damages

Answer 5

A type of monetary damages

higher than the loss suffered by the victim:

• Intended to punish the tortfeasor
• Designed to set an “example”
• Should deter others from doing same conduct and prevent the tortfeasor from repeating conducts
• Aim to compensate victims for an otherwise non-compensable loss
• Intended to cover the attorney’s fees of the harmed person

Question 6

Punitive damages in common law

Answer 6

• punitive damages awards are usually recognized
• the most widespread use is in the United States

Question 7

Punitive damages in civil law

Answer 7

• In principle, tort law has only a compensatory function
• punitive damages are more and more accepted in Continental Europe

Question 8

North America BMW v. Gore (Facts)

Answer 8

• Gore bought a new BMW and later discovered that the vehicle had been repainted before he bought it.
• BMW revealed that their policy was to sell damaged cars as new if the damage could be fixed for less than 3% of the cost of the car.
• Over a multi-year period of time in BMW repaired damaged vehicles and sold them as new to unsuspecting buyers as a matter of routine business operation.
• Dr. Gore sued BMW, and an Alabama jury awarded $4,000 in compensatory damages (lost value of the car) and $4 million in punitive damages, which was later reduced to $2 million by the Alabama Supreme Court

Question 9

Do high punitive damages violate the Due Process clause of the Constitution? - Judgement for previous case

Answer 9

Excessively high punitive damages in this case violate the Due Process clause. For punitive damages to stand, the damages must be reasonably necessary to vindicate the State’s legitimate interest in punishment and deterrence

• The degree of reprehensibility (discreditability) of the defendant’s conduct
• The ratio to the compensatory damages awarded (actual or potential harm inflicted on the plaintiff) - punitive damage amount to compensatory amount
• Comparison of the punitive damages award and civil or criminal penalties that could be imposed for comparable misconduct (comparing with previous cases)

Question 10

Non-pecuniary losses

Answer 10

Compensation of non-pecuniary damage is justified in cases where the victim has suffered personal injury; or injury to human dignity, liberty, or other personality rights.

Non-pecuniary damage can also be the subject of compensation for persons having a close relationship with a victim suffering a fatal or very serious non-fatal injury

Question 11

Assessment of non-pecuniary losses

Answer 11

• Degree of comparability in the treatment of essentially similar cases (how similar to other cases?)
• Since, it is impossible to draw up a rigid tariff of awards, typically, the gravity, duration and consequences of the grievance will be the central issues in determining an appropriate sum
• Some tort systems take into account the conduct of the tortfeasor in determining what amount of damages must be granted
• Methods of assessment are different: usually judges rely on schedules which quantify the different impairments (loss of an eye, loss of a leg, etc.), sometimes the law fixes precise amounts

Question 12

UK Supreme Court v. Ergo Versicherung (Facts)

Answer 12

1. Major Cox, an officer serving with H.M. Forces in Germany, was riding his bicycle on the verge of a road near his base when a car left the road and hit him, causing injuries from which he died.
2. Major Cox’s widow Katerina, was living with him in Germany at the time of the accident. After the accident, she returned to England. Since then, she has entered into a new relationship and has had two children with her new partner.
3. Liability is not in dispute

Which kind of damage is Katarina entitled to cover? (Non)-pecuniary?

Question 13

Pecuniary and non-pecuniary losses in German law

Answer 13

Pecuniary:

“If the person killed, at the time of the injury, stood in a relationship to a third party on the basis of which he was obliged or might become obliged by operation of law to provide maintenance for that person and if the third party has as a result of the death been deprived of his right to maintenance, then the person liable in damages must give the third party damages by payment of an annuity to the extent that the person killed would have been obliged to provide maintenance for the presumed duration of his life”

Non-pecuniary

The German legal system does not grant damages for the non-pecuniary damage corresponding to the death of a relative. Pain and suffering must be proved by medical evidence in order to recover damages

Question 14

Pecuniary and non-pecuniary losses in UK law

Answer 14

Pecuniary

“In an action under this Act where there fall to be assessed damages payable to a widow in respect of the death of her husband there shall not be taken account the re-marriage of the widow or her prospects of remarriage”

Non-pecuniary

The non-pecuniary loss is quantified in a statutory lump sum equal to £ 12.980 made to families following the death of a partner, child or spouse. They work as a ‘solatium’, i.e. a compensation for injured feelings

Question 15

Differences between BGB (German) and Fatal Accident Act (UK)

Answer 15

(1) Damages awarded to a widow under the BGB will take account of any legal right to maintenance by virtue of a subsequent remarriage or a subsequent non-marital relationship following the birth of a child. Section 3(3) of the Fatal Accidents Act expressly excludes remarriage or the prospect of remarriage as a relevant consideration under English law.
(2) Section 844 of the BGB confers no right to a solatium for bereavement. Under section 823 of the BGB the widow may in principle be entitled to compensation for her own pain and suffering, but this would require proof of suffering going beyond normal grief and amounting to a psychological disturbance comparable to physical injury.

=> German law applies

Question 16

Product liab

Answer 16

special case

Tort liability connected to damages caused by defective products: (policy concerns from the second half of the 20th century, with the development of mass industrial production and the enlargement of the scale of distribution chains among producers and suppliers of goods.)

• On one hand the industrial process has increased the level of risk of damages imposed on the public of consumers
• On the other hand, the traditional tort law principles proved to be in some way ineffective to the purpose of ensuring redress to the individual damaged by a defective product

Question 17

European tort law on product liability

Answer 17

Directive 85/374/EEC of 25 July 1985 on the approximation of the laws, regulations and administrative provisions of the Member States concerning liability for defective products

• Strict liability regime applicable to European producers
• liability without fault on the part of the producer is the sole means of adequately solving the problem, peculiar to our age of increasing technicality, of a fair apportionment of the risk inherent in modern technological production

Question 18

When is the product defective?

Answer 18

A product is defective where it does not provide the safety which a person is entitled to expect, taking all circumstances into account, including:

• the presentation of the product;
• the reasonable use of the product;
• the time when the product was put into circulation

Question 19

Categories of defects

Answer 19

• Manufacturing defects
• Defective design (difficult to control for the producer)
• Failure to warn

Question 20

When is the producer not liable?

Answer 20

The producer is not recognized as liable if he proves that:

• he did not put the product into circulation;
• the defect appeared after the product was put into circulation
• the product was not manufactured to be sold or distributed for profit
• the defect is due to compliance of the product with mandatory regulations issued by the public authoritieS

Question 21

When is derogation (exemption from or relaxation of a rule or law) possible?

Answer 21

Member States are permitted to take measures by way of derogation

• In cases where the state of scientific and technical knowledge at the time when the product was put into circulation was insufficient to identify the defect
• Development risk

Question 22

Development risk - BGH case (Facts)

Answer 22

1. A nine-year old girl suffered serious eye injury when a mineral water bottle exploded as she was carrying it.
2. It appeared from the evidence that the explosion resulted from the presence of a 4 mm chip in the bottle.
3. The particular bottle that caused the injury was somehow damaged during the refilling process.
4. The manufacturer had alleged that the defective bottle was the “odd unit” which suffered from a manufacturing defect despite all the precautions taken in the refilling process.
5. The manufacturer argued that it should be exonerated under the Directive, due to the product development risk clause.

Question 23

BGH case (Judgement)

Answer 23

Does the ‘product development clause’ apply to ‘manufacturing defects’ or does it only apply ‘to design defects’?

• Development risks were only present in those cases in which the harmful characteristics that caused the damage could not be discovered by scientific and technological means at the time of circulation of the product
• Development risks are only dangers that emanate from the design of a product, but not defects which cannot be avoided during the manufacturing process.
• There was agreement at during the works on the EC-Directive on Product Liability that only design defects but not manufacturing defects would qualify for consideration under Art. 7

Question 24

When does Directive apply to damage

Answer 24

• caused by death or by personal injuries
• caused to an item of property intended for private use or consumption

Question 25

Burden of proof for the consumer is limited to

Answer 25

• the actual damage;
• the defect in the product;
• the causal relationship between damage and defect