Defective Goods

Defective Products Act

The EU Products Liability Directive and the implementing Act seek to establish liability on the part of producers for defective products, without proof of fault. The Defective Products Act gives effect to the Directive. As a matter of European Union law, the Directive takes precedence as far as its mandatory provisions are concerned. The Directive is set out in the schedule to the Act.

The Defective Products Act provides that liability for defective products is tortious in nature. This has the consequence that the tort rules of remoteness apply. These are less restrictive than the contractual rules. The imposition of liability in tort also invokes tortious principles of contributory negligence (joint and several tortfeasors etc.)

Contractual clauses may not limit or exempt the liability of the producer. Notices or any other mechanism which seeks to avoid liability are deemed ineffective.

Products

A product includes all chattels other than primary agricultural products. It covers movables that are incorporated into immovables, primary agricultural products or products of the soil or stock farming, fisheries and game. It includes products which have undergone initial processing. Initial processing is any processing of an industrial nature of those products, which could cause a defect in them.

Under the legislation as originally enacted, agricultural products were entirely excluded. 2000 Regulations following an amending Directive in 1999 brought agricultural products within the scope of the legislation. The extent to which the human body and its parts may constitute a product is controversial. Blood has been held to constitute a product for this purpose.

Fixtures are not products, notwithstanding that movables incorporated into them, are subject to the legislation. Buildings and premises remain subject to common law principles, details of which are set out in other articles.

Producer

A producer is defined to include

• the manufacturer or producer of a finished product;
• the manufacturer or producer of any raw material;
• the manufacturer or producer of a component part of a product;
• in case of products of the soil, stock farming, fisheries and game which have undergone initial processing; the person who carried out the processing;
• any person, who by putting his name, trademark or other distinguishing feature on the product or by using his name or another mark in relation to the product, has held himself out to be the producer of the product;
• any person who has imported the product into the European Union from outside the European Union in the course of business in order to supply it to another.

Certain persons are liable as a producer of the product, where the producer cannot by taking reasonable steps be identified. The supplier of the product is treated as a producer unless he notifies the injured person within a reasonable time of the identity of the producer or the person who has supplied the product to him. The request must be made within a reasonable time after the damage has occurred in circumstances where it is not reasonably practicable for the injured person to identify the producer.

Manufacturers are the preeminent producers of products. Under the above definition, a wider category of other persons (or entities), are potentially liable under the legislation, as producers. For example, importers into the EU and persons who package their own branded products become producers, even though they have not manufactured them.

Defective Product

A product is defective if it fails to provide the safety which a person is entitled to expect, taking account of all circumstances, including the presentation of the product, the use to which it could reasonably be expected that the product would be put and the time when the product was put into circulation. A product is not considered defective for the sole reason that a better product is subsequently put into circulation.

The presentation of the product includes its packaging and its marketing material.

A risk may be reduced or eliminated by a warning. The legislation seeks to motivate manufacturers to warn the public of dangers. The giving of a warning may make a product that is otherwise defective or unsafe, safe.

Standard of Safety

The standard of safety is considered with reference to the use to which the product might increasingly be expected to be put. In case of more complex products, this may be influenced by the contents of the accompanying instructions.

The use of a product will be dictated by common sense considerations. The misuse of a product for an abnormal purpose does not absolve the producer from liability. Because the claim is based on tort, the user may be found to be contributorily negligent.

The standard of safety is measured at the time when the product is put into circulation. This has a number of consequences. Certain products have a short lifespan. In other cases, the state of technology is such, that the standards change rapidly. Later changes in the state of science and technology cannot increase the standard required of producers at the requisite time.

The passage of time may be a relevant factor which reduces the expectations of a product. Most products wear out with use. A fault or malfunction in a product which occurs shortly after purchase is more likely to be characterised as a defect, than one occurring many years later.

The safety which may be expected of a product depends on its nature and the circumstances. Some products are inherently dangerous. Usually, this will be readily apparent. In many other cases, the danger is far from obvious, and warnings will be required.

Damage

Damage under the Act includes death and personal injuries. The loss by way of general and special damages in accordance with the general principles applicable to torts may be recovered. This includes pain and suffering, diseases, impairment and other physical and mental injury. It extends to damage to property other than the defective product itself.

The Act covers fatal injuries caused by the defective product. Dependents may claim damages by reason of the death of another and subject to a special statutory cap, general damages for mental distress in that context.

Damage under the Act covers damage to or destruction of any item of property other than the defective property itself. The other item of property must be of a type ordinarily intended for private use or consumption. It must be used by the injured person for his own private use and consumption.

Proof of Claim

The legislation provides that the onus is on the claimant to prove the damage/injury, the defect and the causal relationship between the defect and damage. There is no obligation on the injured person to show fault on the part of the producer.  In this sense, liability is strict.

The question of causation can cause difficulties in some cases. The defect may not be the cause of the injury. There may be contributory negligence/fault.

In the context of negligence, the principle of res ipsa loquitur may create a presumption of negligence where something occurs which would not occur in the natural course of things, but for negligence. A similar principle may apply where damage is caused following the use of the product, where such loss would arise in the normal course, but for a defect or fault in the product. However, it is not clear to what extent the principle applies in proving defects in the context of the Act.

The degree of safety that might reasonably be expected depends on the circumstances. A particular accident or effect may occur because of the manner of use, or it may be due wholly or partly to the claimant’s fault. Where the claimant has used the product in a reckless, dangerous or unusual manner, he might not have the requisite reasonable expectation.

Defences

The legislation provides a number of statutory defences.

• the producer did not put the product into circulation;
• having regard to the circumstances, it is probable that the defect which caused the damage did not exist at the time the product was put into circulation or that the defect came into being afterwards;
• the product was neither manufactured by the producer for sale or any form of distribution for economic purposes nor manufactured or distributed in the course of his business;
• the defect is due to compliance with legislation or mandatory requirements made/issued by a public authority;
• the state of scientific and technical knowledge at the time it put the product into circulation was not such as to enable the existence of the defect to be discovered;
• in the case of a manufacturer, the defect was attributable to the design of the product in which the component had been fitted or to the instructions given by the manufacturer of the product.

The defect must be present at the time of purchase. A defect arising afterwards is generally not covered unless it is caused by or follows from a defect which existed at production. A defect may occur precisely because there was another defect as and from the outset.

State of Art Defence

The state of the art defence may relieve the producer of liability. If the defect could not be detected due to the state of scientific and technical knowledge at that time, the defence applies. This is to some extent an exception to the no-fault principle.

The defence does not necessarily refer to practices which were standard in the industry at the time, but rather the state of scientific and technical knowledge. This may be in advance of that which applied in practice by manufacturers and processors. It does not look at the producer’s state of knowledge, but rather that of the industry as a whole.

The test is objective. The state of knowledge includes information within the scientific community as a whole. There must be a reasonable opportunity for the information to circulate.

If there is a known risk or a risk which could have been discovered from accessible sources, then the defence is not available. This is so, even if it is not possible to identify in which products the defect may manifest itself, provided there is a risk of it arising in the particular product.

A manufacturer of a component is not liable where the fault lies within the product in which the component or part is fitted, where the defect is due to the design of the host product or instructions provided by the manufacturer.

Time Limit

Proceedings must be initiated within three years of the damage. The right to bring proceedings accrues when the person is aware, or ought reasonably to be aware of the damage, the defect and of the identity of the person who produced it.

There is an outer limit of 10 years from the date the product is put into circulation. The may mean that proceedings would be statute barred under the Act, where the Statue of Limitations would be suspended under ordinary principles of discoverability.

Multiple Causes

Where damage is caused partly by a defect in the product and partly by the fault of the injured person or any person for whom the injured person is responsible, Civil Liability Act provisions concerning contributory negligence apply as if the defect is due to a fault of every person liable under the Act for the damage.

The purpose of this provision is to avoid the effect of the Civil Liability Act, in cases where one party is not at fault, and another or others are at fault. In such circumstances, the liability is apportioned primarily between those who are at fault, exonerating those who are not at fault. The effect of this section is that there is an apportionment between all parties who are concurrently liable, whether under fault (negligence) principles of liability or under the non-fault regime of the Act.

Opt-Outs

There are a number of opt in and opt out provisions in the legislation. Ireland has opted into state of the art, state of scientific knowledge, defence (Article 7A).

States may place a cap on the overall liability of €70 million. Few states have opted into this cap.