Product liability Flashcards
A drugs company produced a new drug that proved to be very successful in the treatment of lung cancer. Before the drug was made available to lung cancer victims it was fully tested and extensive research was carried out within the drugs industry in an attempt to ensure that it would be free of potential defects. Unfortunately, patients who took the drug suffered a particular type of liver damage. In the leaflet distributed with the drug there was a warning that it could cause side effects.
Which of the following best describes the ‘development risks’ defence that the producer of the drug may be able to argue in accordance with the Consumer Protection Act 1987?
A-The producer had given a warning that the drug could cause side effects.
B-When making the drug, the producer had to comply with strict manufacturing requirements imposed by industry legislation.
C-The drug was produced using the safest methods possible at the time.
D-Given the knowledge available in the drugs industry at the time the drug was manufactured, it was not reasonable to expect the producer to have been aware that it could cause this particular type of liver damage.
E-At the time it was manufactured, there was no test available for the type of liver damage that was incurred.
Option D is correct because s4(1)(e) of the Consumer Protection Act 1987 confirms “the state of scientific and technical knowledge at the relevant time was not such that a producer of products of the same description as the product in question might be expected to have discovered the defect if it had existed in his products while they were under his control.”
Option A is not the best answer because it does not come within the remit of s4(1)(e).
Option B is not the best answer as this is relevant to the defence available under s4(1)(a) of the Consumer Protection Act 1987
Option C is not the best answer because it does not come within the remit of s4(1)(e). Also, this argument would only be relevant at common law.
Option E is not the best answer as an argument about inability to test a product for the harm incurred was rejected in A v National Blood Authority [2001] 3 All ER 289.
A man recently purchased a gas barbeque from a shop that was closing down. As it was the last day of the company trading, he purchased it for half price at £250. Whilst using the gas barbeque it exploded and caused him serious burns to his left arm for which he has needed hospital treatment. It also burnt down his new shed which cost £500.
An engineer’s report confirms that the gas tube was defective. Although this would have been a known risk within the industry, there was nothing the manufacturer could have done to detect it at the time of production. The report therefore concludes that the very rare defect could not have been avoided.
Which of the following statements best describes the man’s potential claim against the manufacturer?
A-He can claim for the purchase price of the gas barbeque and the pain and suffering from his injuries.
B-He cannot claim as the risk of such a defect was very rare.
C-He can only claim for the pain and suffering from his burns.
D-He cannot claim as the defect in the gas tube could not have been identified by the manufacturer at the time of production.
E-He can claim for the pain and suffering from his injuries and for the cost of replacing the shed.
Option E is correct because it is the best explanation. Under the Consumer Protection Act 1987 (CPA) the man can claim for personal injury s5(1) and for the cost of replacing the shed. The latter is personal property damage exceeding £275 in value s5(1), 5(3) and 5(4). It does not matter that the manufacturer was not to blame in that they could not detect the defect, as the CPA imposes strict liability. The gas barbeque clearly does not meet the consumer expectation test (s3).
Option A is wrong because the man would not be able to claim for the purchase price of the gas barbeque in tort as it is pure economic loss and it also states so in s5(2) CPA.
Options B and D are wrong because the CPA imposes strict liability, and as such there is no need for fault on the part of the manufacturer. It is sufficient that the gas barbeque does not meet the consumer expectation test s3. The ‘development risks’ or ‘state of the art’ defence does not assist the producer as they were aware of the very rare risk (albeit could not have identified/prevented this particular defect) A v National Blood Authority [2001] 3 All ER 289.
Option C is wrong because it is not the best answer as it is not complete. It includes a correct claim for the pain and suffering for the man’s burns, but it does not include the claim for the cost of replacing the shed.
A solicitor is instructed by a manufacturer of exercise bikes. They have been notified of a claim by a customer. The details of the claim are that the customer bought an exercise bike from a sports shop. They took the bike home, opened the packaging that the bike was supplied in by the manufacturer and read the instruction booklet carefully before using it for the first time. After a couple of minutes the seat post on the bike collapsed. The customer fell off the bike, broke their arm, and smashed their glasses worth £150. They also caused extensive damage to their very expensive violin that was near the bike at the time. The customer is a professional violinist and wants compensation for all these losses, their income lost as a result of not being able to play the violin and the cost of a replacement bike.
The manufacturer has made thousands of this particular exercise bike without any complaints of this nature. They have investigated their production records and are confident that they are not at fault in any way.
All the manufacturer’s products are sold subject to an exclusion of liability clause for all losses, howsoever caused.
Which of the following statements best explains whether the manufacturer may be liable for the customer’s losses under the Consumer Protection Act 1987?
A-Yes, because the manufacturer will probably be held liable, but only for the personal injury and the customer’s lost income.
B-Yes, because the manufacturer will probably be held liable for all the losses except the cost of the replacement bike and the cost of the glasses.
C-No, because the customer should be bringing a claim against the sports shop in contract.
D-No, because the manufacturer will be able to rely on its exclusion of liability for all the customer’s losses if the clause is fair.
E-No, because the customer will not be able to prove that the manufacturer was at fault.
Option A is correct. The customer suffered ‘damage’ for the purposes of the CPA 1987 as they have broken their arm, and their consequential lost earnings, due to their inability to play the violin with a broken arm. They will not be able to claim for the cost of repairing or replacing the bike as damage to the defective product itself is excluded by the Act. Neither will they be able to recover the cost of the damaged violin if it is regarded as ‘business’ property. The cost of replacement glasses will not be recoverable as they are worth less than £275. The customer’s recoverable losses were caused by a ‘defect’ as the safety of the bike was not such as persons generally were entitled to expect in all the circumstances. The bike is clearly a ‘product’ for the purposes of the CPA 1987. The customer will be able to claim against the manufacturer of the bike as the producer of the product.
Option B is wrong as it fails to consider that the violin will not be recoverable as it is business property.
Option C is wrong because, while the customer would also have a claim in contract against the shop, this does not mean that the customer is barred from bringing an alternative claim against the manufacturer under the CPA 1987 and/or negligence.
Option D is wrong because it is not possible to exclude liability under the CPA 1987; the question of whether the exclusion is fair is irrelevant.
Option E is wrong because liability under the CPA 1987 is strict. It is irrelevant, therefore, that the manufacturer may have evidence that they are not at fault (subject to the defence that the defect did not exist when the defendant supplied the product).
A client has sought advice of a solicitor arising from the following events. The client lives in a first floor apartment. The client works from home as an accountant and their very expensive laptop, which they use for their work, has been damaged beyond repair. This was caused by water from a dishwasher in the apartment above them leaking into their apartment. The owner of the upstairs apartment dishwasher was brand new and was installed by an independent contractor. It appears that the contractor had forgotten to correctly tighten one of the hoses on the dishwasher and this is why the water leaked into the client’s apartment.
Will the client be successful in a claim for the cost of their laptop against the independent contractor under both the Consumer Protection Act 1987 (CPA 1987) and negligence?
A-No, because it is not generally possible for a claim to be commenced under both the CPA 1987 and negligence; claimants must choose between the two claims.
B-No, because the claim under the CPA 1987 is bound to fail as the independent contractor is not a potential defendant under the CPA 1987. The claim under negligence may succeed.
C-No, because while a claim under the CPA 1987 may succeed as the dishwasher was defective, the claim in negligence is bound to fail as the independent contractor was not a manufacturer.
D-Yes, because liability under the CPA 1987 is strict and the claim under negligence may also succeed.
E- Yes, because the independent contractor is a potential defendant under the CPA 1987 and liability under the CPA 1987 is strict. The claim in negligence may also succeed.
Option B is correct.
The CPA 1987 claim is bound to fail, as the independent contractor is not one of the potential defendants under the CPA 1987 as they are not a producer of the product, an ‘own-brander’, an importer or a ‘forgetful’ supplier. (It is also questionable whether the dishwasher itself was ‘defective’ because, if it was unsafe, this was due to the actions of the installer.)
However, the negligence claim is likely to succeed. The independent contractor is a ‘manufacturer’ who owes a duty to the client as a ‘consumer’ (it is reasonably foreseeable that the client would be affected by the contractor’s actions and there is nothing to suggest that an intermediate examination of the contractor’s work would be expected). The contractor’s breach of duty by failing to tighten a hose has caused reasonably foreseeable harm to the client.
Option A is wrong because it is generally possible for a claim to be commenced under both the CPA 1987 and negligence. The claimant cannot, however, recover damages twice over for the same loss.
Option C is wrong because the claim under the CPA 1987 is bound to fail for the reasons set out above. Option C is also wrong because the term ‘manufacturer’ (under the narrow rule from Donoghue v Stevenson) has been interpreted to include installers. The independent contractor is, therefore a potential defendant in negligence.
Option D is wrong because, while liability under the CPA 1987 is strict, the independent contractor is not one of the potential defendants under the CPA 1987.
Option E is wrong for the same reason as option D.
