Product Liability

Question 1

When is Product Liability relevant?

Answer 1

Where a claimant has suffered damage as a result of a defective product.

Question 2

A claimant afected by a defective product has 3 potential causes of action:

Answer 2

• Breach of contract
  
  • ​An action in contract - can include economic loss
• Common law negligence
  
  • ​This can only be for personal inury and property damage caused by the defect, and not for PEL (except in expcetional circumstances)
• A claim under the CPA 1987

Question 3

Manufacturerers of products owe a duty to the ultimate consumers of their products to take reasonable care (Dongohue v Stevenson [1932]). A DOC will exist if the claimant can show that (4):

Answer 3

1. The defendant is a manufacturer.
   
   • This includes anyone who works on the product before it reaches the consumer. I.e. installers, suppliers and repairers of the product.
2. The item which caused the damage is a product.
3. The claimant is the ultimate consumer of the product.
4. The product was not tampered with in any way before reaching the consumer.

Question 4

Donoghue v Stevenson [1932] HL

Answer 4

Held: The manufacturer of a bottle of ginger beer, had negligently produced a bottle which contained teh decomposed remains of a snail. A woman who drank the bottle and suffered severe stomach cramps was able to sue them in negligence.

Question 5

What types of damage is recoverable in common law negligence with regards a defective product?

Answer 5

Normal rules of negligence applies

Personal Injury

• Physical injury is recoverable
• Psychiatric injurt is recoverable if it a “recognisable psychiatric disorder”, not just distress or anxiety. C mya be a primary (White v CC South Yorkshire Police) or secondary (Alcock) victim.

​Property Damage

• ​Property damage which the defective product has gone on to cause is recoverable

​Pure Economic Damage

• Claimant cannot recover for PEL caused by a defective product (Murphy v Brentwood DC)
• However C can recover for consequential economic loss.

Question 6

What is the coomon law SOC with regards product liability?

Answer 6

A reasonable manufacturer who takes all sensible precautions bearing in mind the cost

• Grant v Australian Knitting Mills

Question 7

Grant v Australian Knitting Mills [1936] PC

Answer 7

Held: C contracted a disease due to a woollen jumper that contained excess sulphur and had been negligently manufactured. Privy Council allowed a claim in negligence against the manufacturer, D.

Obiter

• C is not required to show what went wrong in the manufacturing process.

Question 8

Normal rules of causation and remoteness apply.

Answer 8

Normal rules of causation and remoteness apply.

Question 9

What defences are available to the defendant manufacturer in common law negligence?

Answer 9

• Consent
  
  • Grant v Australian Knitting Mills [1936]:
    
    • Lord Wright the Donoghue principles only apply to hidden dangers and NOT where a person knows of the danger, since in the latter the damage “follows from his own conscious volition in choosing to incur the risk or certainty of mischance.”
• ​​Contributory Negligence

Question 10

Can the manufacturer exclude liability?

Answer 10

D cannot limit or exclude liability for death or personal injury caused by its negligence (s.2(1) UCTA 1977 amd s.65(1) CRA 2015).

All other limitations of exclusion must satisfy the reasonableness test.

Question 11

Give 5 arguments for reform of manufacturers liability.

Answer 11

• Manufacturers motivations: Since manufacturer are motivated by profit, and given teh difficulty and rarity of a sucessful tort claim for product liability, there is vyer little motivatio for manufacturere to spend more money on costly safety precautions. There should therefore be more of an emphasis on imposing regulations and inspection son manufacturers, to ensure compliance with consumer safety.
• Manufacturers can abosrob the costs of harm and shouldere liabity more easily than consumers, because they are often the stronger part. Moreover they can get public liability insurance, and inreased prices to help spread the financial burden or liability
• Knowledge assymetry: Manufacturers know much morea bout teh products that they produce and the various risk that could flow from that process compared to the consumer.
• Difficulty for claimants in establishing negligence: the legal hurdles associated with nestablishing neligence in a manufacturing context (especially in relation to causation) can preven the claimant getting justice in certain circumstnaces
• The introduction of strict liability for product defects would incentivise manufacturers to minimise the risk of defects/harm.

Question 12

Muirhead v Industrial Tank Specialities [1986] CA

Answer 12

Held: C, an enterprising fishmonger, conceived a scheme to supply the market in lobsters at times of high demand by keeping them in tanks. He purchased the tanks from ITS but the pumps
in the tanks failed to function properly. The result was that a large number of lobsters died and C suffered loss in being unable to proceed with his
project. There was a good claim for breach of contract against ITS but they were insolvent. Accordingly, C sued the French manufacturers of the pumps (with whom he had no contract) alleging that they were negligent in supplying
equipment which was not properly adapted for use under English voltages. Damages were recovered for the dead lobsters and for certain consequential losses but C failed in his claim for the cost of the pumps and the profits that would
have been made in the business had the pumps functioned properly because such losses were purely economic.

Question 13

Hamble Fisheries v Gardner [1999] CA

Answer 13

Held: A firm which took over an engine manufacturer did have a duty to inform users (purchasers) of reports of faulty pistons on engines produced before the business changed hands. However the claim for damages failed since the loss suffered by the purhcasers was purely economic.

Question 14

Junior Books v Veitchi [1983] HL (Sc)

Answer 14

Held: V had been engaged as specialist sub-contractors to lay a floor in a factory being built for J; there was no contractual relationship between V and J. J claimed that the floor was defective as a result of negligence by V, and that in consequence they had suffered a considerable loss of profit, and other economic and financial loss.

Held: there was revealed a sufficient proximity between V and J to give rise to a duty of care in respetc of PEL suffered by J

Analysis

• In Muirhead Goff LJ said: For pure economic loss, the purchaser can only sue the immediate vendor and not a manufacturer. Junior Books is distinguished as giving an exceptionally close relationships on its own facts. There was also reliance. Therefore it is not an authority for the proposition that the manufacturers or TPs are commonly liable for economic loss.
• In D & F Estates Ltd v Church Commissioners for England [1989] AC 177, the HL declined to follow Junior Books and described it as a “unique” case which could not be regarded as laying down any principle of general application.

Question 15

Howmet v Economy Devices [2016] CA

Answer 15

Held: The manufacturer of a “thermolevel” device used in the aerospace manufacturing industry to avert the risk of fire was not liable to the owners of a factory which was destroyed by fire even though the device was found to be flawed and unsafe.

Reasoning

• The collective knowledge before the fire of six employees who knew that the device was malfunctioning was to be attributed to the factory owner. If an end user voluntarily continued to use a chattel after being alerted to its dangerous condition, he normally did so at his own risk.

Question 16

Consumer Protection Act 1987

Answer 16

The CPA 1987 gives effect to the European commision Directive on product liabilty.

The CPA is gerneally prefereable to an action in teh tort of negligence because there is no need to prove negligence/fault on the part of the producer.

It does not replace the common law but instead provides an alternative cause of action.

Question 17

What must the cliamant show, and what must the defendant be in order to bring a cliam under the CPA?

Answer 17

• Claimant must show that they have suffered damaged cuased by a defect in teh product.
• Defednant will on be liable if they are a producer, brander, importer or supplier of that product.

Question 18

How can a claimant bring an action under the CPA?

Answer 18

4 s.2(1) requirements

1. Damage
   
   • C must have suffered damaged
   • Includes PI and damage to PrivProp over £275, but not damage to commerical property and PEL.
2. Causation
   
   • But for the defect the dmage would no thave occured
3. Defective
   
   • ​​Product must have been defective
   • Is thw product as a whole of the safe standard that one would generally expect (s.3(1))
   • Strict liability test: is the product, unsafe regardless of whether D acted reasonably
4. Product
   
   • ​​Product is broadly defined: Includes any goods or electricity and.. includes a product which comprised in another product whether by virtue of being a component part or raw material or otherwise.
   • Many things cout as products, even blood (A v National Blood Authority [2001])
   • S.45(1) states that the defintion of “product” inlcudes substances, growing crops, things attached to the land and ships, aircrafts and components of a building. A building as a whole could not be a product but, for example, its heating system could. ​

Question 19

When can the defendant be liable under the CPA?

Answer 19

Under s.2(2) only the folowing catergoies of peop[le can be liable under the CPA:

1. Producers
   
   • ​​​​Manufacturer, Abstractor (e.g. farmer), Processor (“essential characteristic”)
   • N.b. in thec ase of a faulty componenet, both the producer of the defective icomponent and ther person who iassembles it can be held liable.
2. Branders
   
   • ​​Someone who holds themself out as the producer, by rebranding the product
3. Importers to the EU
4. ​​Suppliers
   
   • ​​Supplier can be liable under the CPA if on request and after a reasonable amount of time, the supplier cannot identify any of the above potential defendants (s.2(3))

*

Question 20

What is a defect?

Answer 20

A product is defective if its safety “is not such as persons generally are entitled to expect “ (s.3(1))

• Stapleton (1984) criticises this statutory definition as overly broad and vague.

Question 21

What is the test for liabliity under the CPA 1987?

Answer 21

While some judgement adopt a fairly robust model of strict liability, more recent cases tedn to incline towards fault based.

Cases suggesting STRICT: pro-consumer

• A v National Blood authority [2001]

Cases suggesting FAULT/Negligence: pro manufacturer

• Tesco v Pollard [2006]
• Wilkes v DePuy

Question 22

A v National Blood Authority [2001] (HC)

Answer 22

Held: The National Blood authoiryty were liable for the defective provision of contaminated blood transfusions.

Reasoning

• The NBA sought to submit the defence of knowledge under Art.7(e) - (that the state of scientific and technical knowledge at the time when he put the product into circulation was not such as to enable the existence of the defect to be discovered)
  
  • ​However The defence based on “knowledge” in s.4 did not apply where the existence of the generic defect was known or should have been known in the context of accessible information. Once the existence of the defect was known, there was the risk of that defect materialising in any particular product, and it was immaterial that the known risk was unavoidable in the particular product, since it would defy the point of the directive if a producer let dangerous products go to market simply because he didn’t know which of his products were dangerous.
• Burton J the difficulty of identifying the risk of contamination could not be taken into account in determining whether the producty was defective. If matters such as difficulty of cost of elimintating risk were taken into account, it would render the directive “not only toothless but pointless

Question 23

Tesco Stores Ltd v Pollard [2006] (CA)

Answer 23

Held: The manufacturer of a dishwasher powder tablets, whose sfaety cap did not meet the “British Industry Standard”, such that a child was able to open and ingest a table, was not liable since the manufacturer had produced a cap that was harder to open than a normal a ca, and had done uall that was reasonable.

Laws LJ: The case came down to s.3(1) of the act, that “There is a defect in a product for the purposes of this Part if the safety of the product is not such as persons generally are entitled to expect …” Here, the public were entitled to expect that the bottle would be ,more difficult to open than a standard bottle top, which it was. Therefore the product was not defective.

Analysis

• Despite Laws LJ rationalistion of case as not falling withtin the definition of s.3, the judgement apperas to precipitate a move away from stict liability and towards fault-based liablity.

Question 24

Wilkes v Depuy [2016] EWHC 3096

Answer 24

Held: The manufacturer of an artificial hip made from metal, which fractured after surgery and caused metal debris to be shed around the patient’s hip joint, was not liable to the patient under the CPA 1987 s.3.

Reasoning

• Central issue is whether a product is not as safe as persons generally are entitled to expect. This is to be assessed objectively
• Since the Directive applies to a very wide range of products they must adopt a flexible approach to the standard of safety that the public is entitled to expect.
• Following A v National Blood Authority [2001], the claimants submitted that certain circumstances were never relevant to take into account because they fell outside the Directive’s purpose. These included avoidability of the defect, cost, any benefits other than those specifically relating to safety, and compliance with applicable regulatory requirements and standards.
• The court disagreed. It accepted the claimants’ submission that the most significant circumstances to be taken into account were those specified in section 3 of the 1987 Act and that the circumstances to be taken into account in any given case must be factually and legally relevant to the evaluation of safety. However, the court agreed with the observation in Wilkes that the court must maintain a flexible approach to the assessment of the appropriate level of safety, including which circumstances are relevant and the weight to be given to each, those factors being quintessentially dependent on the particular facts of any case.
• Even though there is no-fault liability the correct apporach is not to start with causation (A v NBA) but to first focus on the existence (or not) of a defect.

Question 25

Boston Scientific Medizintechnik GmbH v AOK Sachsen-Anhalt-Die Gesundheitskasse (C-503/13) (2015) 144 BMLR 255

Answer 25

Held: The Gmbh importers of pacemakers into the EU , were sued under EU Directive 85/374. The court held that in the light of their function and the vulnerability of patients using them, the medical devices in question were subject to particularly high safety requirements. In this case the mdeical device in question was found to be defective, and thus where it is found that a medical device had a potential defect; it was possible to classify as defective all products of the same model, without there being any need to show that the product was defective in each individual case.

Question 26

What types of damage are recoverable under the CPA?

Answer 26

Under s.5(1) the CPA covers losses arising form udeath or personal injury. However, the recoverabliity of damage to property is restricted:

• s.5(2): There is no liability for damage to the product itslef or to the whole or part of any product that has been spplied with the product (i.e. PEL
• s.5(3): To claim for damage to property, that property must noramlly be of a sort gnerally intended for private use and actually intended for private use by the claimant. Damage to other forms of property must be reocvered in negligence.
• N.b. A claim for property damage must be worth more than £275.

Question 27

s.6(4) CPA 1987

Answer 27

Contributory negligence is a defence courtersy of LR(CN)A 1945

• D will not be liable if C is aware before the damage occurs that the product is defective and voluntarily continues to use it (Howmet [2016])

Question 28

s.4 CPA

Answer 28

Defences:

Listed under s.4(1)

a. defect is attributable to compliance with a requirement imposed by law.

b. D did not supply the product to another

c. Supply was non-commercial

d. _Defect did not exist when t_he defendant put the product into circulation

e. state of scientific and technical knowledge at the time (of supply was not sufficient to enable the producer of a product of simlar descritiption to discover the defect.

• If D can show that other companies in teh same industry would not have been capable of defecting the defect, D will have a defence.

Question 29

Commission v UK [1997] (EC)

Answer 29

Held: It was held that the UK had correctly transposed Article 7(e) of the EU directive, into English Law through the CPA 1987 s.4(e) despite the fact the s.4(e) refers to the capabilities of other producers, and is thus an arguably broader defence than that in Article 7(e).