Get the information you need to practice law Quickly, Easily and No Subscription Required.
What is KnowHow?
Detailed Practice Notes written by our Professional Support Lawyers, guiding you through the key issues in each topic.
Product liability - overviewDifferent legal bases of consumer protection
Defective or dangerous products can lead to both civil and criminal liability on those in the supply chain, from manufacturer to retail sale or supply to the consumer. An aggrieved consumer may have a claim for breach of contract or for negligence in tort. There is also a statutory regime for the protection of consumers against defective or unsafe products which is the subject of this overview.
Consumers also benefit from other statutory controls, eg with regard to unfair contract terms and unfair trading. See also Consumer protection: Consumer terms and unfair trading. In the case of products purchased with credit other protective measures, such as under the Consumer Credit Act 2006, may apply. See Consumer protection: Consumer credit.
Statutory product safety regime
The key UK legislation for the statutory regime is found in the Consumer Protection Act 1987 (CPA 1987).
The statutory regime uses defined terms for 'producer' and 'distributor' that should not be confused with day-to-day meanings of these words. The definitions differ for the purposes of Part I and Part II of the CPA 1987. Eg under Part II, 'producer' is defined as the manufacturer, its local representative, or the product importer in the European Economic Area (EEA) and others in the supply chain who can influence the safety of the product, whilst a 'distributor' may also be involved in the supply, but in a role which does not affect the safety of the product.
Liability for defective products
Part I of the CPA 1987 imposes strict civil liability for defective products. A producer (or other person in the supply chain) will be liable to pay damages for death, personal injury and damage to personal property (with a value of £275 or more). Products are defined to include goods, electricity, components and raw materials. Second-hand goods may also fall within the definition. A defect in a product will arise if the safety of the product is not such as persons generally are entitled to expect. Although liability to consumers cannot be limited, there are specified defences to strict liability under the CPA 1987.
Liability for dangerous products
Part II of the CPA 1987 deals with criminal liability for breach of safety regulations relating to goods. There are specific measures made by statutory instrument for certain industry sectors, such as toys.
There is, in addition, a general product safety requirement which is now governed by the General Product Safety Regulations 2005 SI 2005/1803 (GPSR) implementing the EC Directive on General Product Safety (2001/95/EC). Under this regime, no product may be put on the market unless it is a 'safe product'. If the product does not fulfil the specified criteria for a 'safe product' then it is deemed to be a 'dangerous product'.
Product notification and recall
Under the statutory product safety regime authorities may:
give a warning notice
suspend supply, and
order the recall of goods that are considered to be unsafe
Local authorities and Trading Standards are key players in product notification and recall under the legislation. In addition, the Rapid Alert System (RAPEX) is used for information exchange between member states and with agencies outside the EU.
It is a requirement on producers to keep themselves informed of possible product risks and take appropriate action, eg to notify the local authority once they are aware a product in the market place is dangerous. Distributors are also subject to certain duties to safeguard consumers against dangerous products.
The European Commission has provided guidance on risk assessment as an aid to producers and distributors. This may be used to assess whether notification is required. However, the guidelines have been much criticised and new draft Safety Risk Assessment Guidelines are at an advanced stage. It is a requirement of the GPSR that the producer takes measures to remain informed and enable any appropriate action to be taken.
Producers are obliged to provide certain information to consumers to enable the consumers to assess risks in products and take appropriate precautions.
Failure to fulfil these statutory duties is an offence. As in the case of Part I, liability for breach of a statutory duty created under the CPA 1987 cannot be limited or excluded by notice or contract. In the case of a body corporate, the officers of that entity may also be personally liable.
Protective measures for producers
Any business that is trading in consumer goods (or goods that may fall into the hands of a consumer) needs to be aware of the requirements and risks created by the legislation to enable it to safeguard its trade and ensure that it provides the level of care and protection that the modern consumer has come to expect.
Steps to be considered include:
protective terms in contracts with other parties in the supply chain:
limiting and/or excluding liability
warranties and indemnities as to matters such as quality control, compliance and risk management
adequate insurance cover
agreement as to notification procedures and maintaining control over publicity and notification processes
providing audit rights
insurance against product liability
careful due diligence in selecting other contracting parties to ensure they have adequate levels of risk management and compliance
spreading the risk among several suppliers rather than sourcing from a single supplier
reviewing internal procedures for compliance and risk management and ensuring procedures are in place to maintain compliance
preparation of a 'notification plan or pack' in case immediate notification needs to be made
To find out more about PSL Contact us or call 0207 400 2984