EU consumer 3 product liability Flashcards
Product liability in EU law
Council 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
The reason for EU to establish laws in product liability
to unify market and foster competition.
Recitals: approximation of the laws of the Member States concerning the liability of the producer for damage caused by the defectiveness of his products is necessary because the existing divergences may distort competition and affect the movement of goods within the common market and entail a differing degree of protection of the consumer against damage caused by a defective product to his health or property;
Whereas 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 risks inherent in modern technological production;”
Do we have strict liability?
Art. 1: “The producer shall be liable for damage caused by a defect in his product.”
However, we still have an exemption possibility for producers: the ‘state of the art’ / ’development risk’ defence, Art. 7/e
economic arguments for strict liability
Risk spreading:
- Producer in best situation to anticipate risk
- Producer in best situation to cover cost of risk through insurance
Cheapest cost avoider principle: Activity generates losses –> society wants to reduce the size of those losses in the cheapest possible way. This gives an incentive to take precautions, while minimizing the cost of those precautions.
Product
Art. 2: all movables even if incorporated into another movable or into an immovable.
NOT an immovable
• Product includes electricity
• Finished product / component part / raw material
• Also agricultural products (that used to be excluded because they were unprocessed)
problem today: artifical intelligence and digital content
C-65/20, VI v KRONE – Verlag Gesellschaft mbH & Co KG, 10.6.2021
Article 2 of Council Directive 85/374/EEC of 25 July 1985 […], must be interpreted as meaning that a copy of a printed newspaper that, concerning paramedical matters, gives inaccurate health advice relating to the use of a plant which, when followed, has proved injurious to the health of a reader of that newspaper, does not constitute a ‘defective product’ within the meaning of those provisions.
–> Tort based liability, not product liability
Producer
Art. 3: means
the manufacturer of a finished product, the producer of any raw material or
the manufacturer of a component part and
any person who, by putting his name, trade mark or other distinguishing feature on the product presents himself as its producer.
Without prejudice to the liability of the producer, any person who imports into the Community a product for sale, hire, leasing or any form of distribution in the course of his business shall be deemed to be a producer within the meaning of this Directive and shall be responsible as a producer.
If you import in country, and introduce them to EU / Switzerland, the importer is going to be liable instead. The importer is the producer
- So even if you have foreign trademark in the product, the importer is liable. No need of going out of the country to sue
last resort rule = If you cannot find the producer nor the importer, you can go to the seller. “Where the producer of the product cannot be identified, each supplier of the product shall be treated as its producer unless he informs the injured person, within a reasonable time, of the identity of the producer or of the person who supplied him with the product”
Is Amazon Market place a producer within the meaning of the Directive on product liability?
Amazon buying the product, putting the brand in it, and selling the goods just like the producer. But Amazon Marketplace, Amazon indicates that they are an agent and not a seller - only helping to get the goods at the right spot. Would you be convinced by this excuse?
Oberdorf v. Amazon.com Inc, 3rd Circuit Court of Appeals, No. 18-1041, 3.7.2019 and Bolger v Amazon.com, LLC, Court of Appeal of California 4thDistrict, D075738, 13.8.2020
–> Dog leash elastic got into eye and badly injured. Who is the person suing? We have an importer but in the case not reachable. So we have Amazon. Now Amazon is not even a seller - if you look at the EU Directive, Amazon is not even the seller. They only link the seller and buyer on platform. In both cases the court said that Amazon is not seller, producer, importer, but it still should be liable as a producer - strict liability as in the EU.
What are these platforms going to be qualified as? This is an issue to be discussed in the new Directives.
- If they would be defined as ones, this would trigger carefulness
- The cheapest cost avoider, the cheapest insurer principles
- Case last week person selling a car - agent problem
C-495/10, Centre hospitalier universitaire de Besançon v Thomas Dutrueux, Caisse primaire d’assurance maladie du Jura, 21.12.2011
Problem with heating beds in the hospital - Should the hospital be liable as a producer?
= In principle, the service provider is not really a producer. You can claim damages from the hospital which will seek for compensation from the producer.
The liability of a service provider such as treatment given in a hospital does not fall within the scope of that directive.
Directive 85/374 does not therefore prevent a Member State from applying rules, such as those at issue in the main proceedings, under which such a provider is liable for damage thus caused, even in the absence of any fault on its part, provided, however, that the injured person and/or the service provider retain the right to put in issue the producer’s liability on the basis of the directive when the conditions laid down by the latter are fulfilled.
Defectiveness
Art. 6
- Burden of proof is on the one who is harmed
- Every defective product is non-conforming, but every non-conforming product is defective
- A product is defective when it does not provide the safety which a person is entitled to expect (“justified consumer expectations paradigm”), taking all circumstances into account, including:
a. the presentation of the product;
b. the use to which it could reasonably be expected that the product would be put;
c. the time when the product was put into circulation. - A product shall not be considered defective for the sole reason that a better product is subsequently put into circulation.
types of defects
- Manufacturing defects (like one in a million you have one defective product),
- Design defects (already defective because the design is defective - Mercedes A series example)
- Insufficient warnings (sometimes called instruction defects) idea behind product liability: we always have inherent risk in goods, very minimum but still existing e.g., plane crash. This residual risk we accept because when we weigh, we think that the goods are more important than the residual risk. But there is a need of informing the risks.
Swiss High Court antipregnancy pill case
the question is that whether a person could be weighing the risk of taking the pill. Did the producer inform on this risk? Or was there an intermediary?
- Doctor prescribing the pill, telling about the risks
- Normally, contraceptives are prescribed by doctors who tell the risks about the pills.
- So the doctor did not explain correctly
- Deep pocket argument? You should go to the producer
- Learnt intermediary doctrine: information the producer gives to the doctor must be correct and include everything. But if the doctor does not give the information, it is not a product liability but a contract liability
• This is not the interpretation of EU
• Application of swiss court is still not overlapping with EU
burden of proof
Art 4
Even when we don’t have to prove fault of the producer, you still carry the burden of proof.
The injured person shall be required to prove the
1. Damage: Not easy because if it is e.g. illness, what causes did the product cause
2. the defect and
3. the causal relationship between defect and damage
“res ipsa loquitur”doctrine: if, under the circumstances of the case, common sense strongly suggests that things were as the plaintiff says, the court may presume that they were so even if the plaintiff cannot really prove it.
the problem in proving the liability
the causal relationship between defect and damage
• very high threshold: fault is not an issue, but how could you know if these goods are defective when a bottle explodes and there is nothing left? The courts are far more lenient - if the circumstances indicate that things were as we really say it, that should be enough to prove it
• regarding the causal relationship with medicine produced by different producers with the same content
- shared liability in US and Netherlands
“res ipsa loquitur”doctrine
if, under the circumstances of the case, common sense strongly suggests that things were as the plaintiff says, the court may presume that they were so even if the plaintiff cannot really prove it.
