What is product liability?
Product liability is the area of law concerned with responsibility for injuries caused by defective products. Those that can be held responsible include manufacturers, distributors, suppliers and retailers.
In England and Wales, an action is largely brought under either the Consumer Protection Act 1987 (CPA) or under the common law of negligence.
In order to claim under the CPA, a claimant must prove that:
- the product was defective
- the claimant has suffered damage (death, personal injury or loss of or damage to private property)
- there is a causal link between the defect and the damage
The CPA imposes strict liability, which means people who are injured by defective products can bring a claim for compensation without having to prove the manufacturer was negligent. They only need to prove that the product was defective, and that the injury or damage was most likely caused by the product.
Applicability
The CPA applies to products used at a place of work as well as those used by consumers. This means that sales of products between businesses come under the scope of the CPA, rather than just sales to consumers who might use the product at their workplace.
Any person who has been injured by a defective product can bring a claim, whether or not they actually purchased the product themselves. A claim cannot be brought under the CPA for pure economic loss and any damage to private property must exceed £275. There is no financial limit on liability.
An injured party has up to three years from the date of the damage or injury to start proceedings, although in some cases this can be extended to up to ten years from the date the defective product was put into circulation.
Who is liable?
Under the CPA, the ‘producer’ of the product is liable for any defects. Producers include:
- the manufacturer of the finished product or of a component part of the product
- an importer of the product
- a business that changes the safety of a product by customising it
- a business that puts its own brand name on an existing product
More than one party may be liable under the CPA for the same damage. Since liability is joint and several, the injured party may sue all or any of the relevant parties.
Enforcement authorities
Under the General Product Safety Regulations 2005, enforcement authorities, such as Trading Standards officers, can take action if they think unsafe products are being supplied. Certain products, such as toys, food and medicines, will be dealt with by specific authorities. If Trading Standards think that your products are unsafe, they can:
- order you to stop selling them
- ask the court for the products to be destroyed
- prosecute you, which could result in you being fined or imprisoned
- demand the recall of an unsafe product
What is a ‘defective product’?
A product could be considered to be defective under the CPA if it is not as safe as could reasonably be expected. When the court is assessing the safety of a product, it will consider all the circumstances, including the marketing of the product, any instructions and warnings given with the product and what might reasonably be expected to be done with the product at the time that it was supplied. A product will not be considered to be defective solely because a safer version is later put on the market.
What can you do to guard against product safety issues?
It is important to proactively manage your responsibility regarding the safety of the products that you produce, manufacture, import or supply. For example:
- consider and record safety at every stage in the lifecycle of the product, from design through to selling
- check whether there are any industry-specific regulations or standards applicable to your product that you need to comply with
- where relevant, pay particular attention to packaging, warnings and instructions, ensuring you provide clear guidance on how to use the product where applicable
- if you are a supplier, ensure you pass on any relevant safety information provided by the manufacturer to your customers
- ensure any safety complaints are investigated fully and in a timely fashion, and pass on any safety concerns reported to the manufacturer
- if you are a manufacturer and you become aware of a defective product, act promptly to withdraw that product. The General Product Safety Regulations 2005 provides guidelines on timescales and processes for this
- ensure you have processes in place enabling you to manage risk, such as accurately recording batch numbers of products that are in circulation, to assist you should you need to recall a defective batch
- consider purchasing product liability insurance to protect yourself in the event of a claim being made against you
Defences to a claim under the CPA
Thrings’ experienced Dispute Resolution team currently acts for a number of leading UK manufacturers defending product liability claims and can provide tailored advice on your specific situation in the event that a product liability claim is made against your business. There are a number of defences that might be available to you, depending on the circumstances of the claim, such as:
- the product was stolen or is a fake, in which case you are not the producer and are therefore not liable
- you could not be reasonably expected to be aware that the product was unsafe, for example if new scientific evidence was discovered after the product was supplied
- the defect did not exist when you supplied the product and put it into circulation but instead arose at a later date (for example if it was transported incorrectly)
- if you are the manufacturer of a component part of the product, but the defect arose because of the way the finished product was designed or because of instructions given by the manufacturer of the finished product
- the defect was an inevitable result of you complying with other laws
- the warnings or instructions for use, making the product safe, were not followed by the user
For further advice on growing, managing or protecting your business, please call or email Thrings.
