Product Liability 2018

Author:Mr Tom Hayes and Michael Byrne
Profession:Matheson
 
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1 Liability Systems

1.1 What systems of product liability are available (i.e. liability in respect of damage to persons or property resulting from the supply of products found to be defective or faulty)? Is liability fault based, or strict, or both? Does contractual liability play any role? Can liability be imposed for breach of statutory obligations e.g. consumer fraud statutes?

In Ireland, liability for defective products falls under four main headings:

Statute. Tort. Contract. Criminal. Statute

The principal product liability statute in Ireland is the Liability for Defective Products Act 1991 ("the 1991 Act"), which was enacted to implement EC Directive 85/374. The 1991 Act supplements, rather than replaces, the pre-existing remedies in tort and contract (see below). S.2(1) of the Act provides for strict liability, making a producer:

"[L]iable in damages in tort for damage caused wholly or partly by a defect in his product."

It is worth noting that the 1991 Act covers only dangerous, defective products. Products which are safe, but shoddy, do not fall within its scope.

Tort

Manufacturers, repairers, installers, suppliers and others may be sued in tort for reasonably foreseeable damage caused to those to whom they owe a duty of care. As opposed to liability under the 1991 Act, liability in tort is fault-based.

For an action to lie in tort, there must be:

a duty of care owed by the producer or manufacturer of the product; a breach of that duty of care; and a causal relationship between the breach and the damage caused to the user of the product. Unlike under the 1991 Act, a plaintiff suing in tort may, in certain circumstances, succeed in a negligence action for non-dangerous defects.

Contract

Contracts for the sale of goods are covered in Ireland by the Sale of Goods Act 1893 ("the 1893 Act") and the Sale of Goods and Supply of Services Act 1980 ("the 1980 Act"). S.10 of the 1980 Act operates to add an implied condition to contracts for the sale of goods: that the goods are of "merchantable quality" where a seller sells them in the course of business. This means that the goods must be:

"[F]it for the purpose or purposes for which goods of that kind are commonly bought and durable as it is reasonable to expect having regard to any description applied to them, the price (if relevant) and all other relevant circumstances."

Contractual liability under the 1980 Act is strict. It must be borne in mind, however, that the principle of privity of contract applies, which often makes it difficult for an injured party to sue the manufacturer of a product in contract, since his contract is likely to be with the retailer of the product.

Criminal Liability

The principal legislation imposing criminal liability in the area of product liability is the European Communities (General Product Safety) Regulations 2004, as amended, ("the 2004 Regulations") which implemented EC Directive 2001/95. The 2004 Regulations make it an offence to place unsafe products on the market and specify the duties of producers and distributors in this regard.

Under the 2004 Regulations, the Competition and Consumer Protection Commission ("CCPC") is given the authority to ensure that only safe products are placed on the market. There is also a duty on producers and distributors to inform the CCPC where they know, or ought to know, that a product which has been placed on the market by them is incompatible with safety requirements. The CCPC has also been given the power to order a product recall, as set out in question 1.5 below.

In May 2016, the Irish government published a draft Corporate Manslaughter Bill. This draft bill includes the separate indictable offences of "corporate manslaughter" and "grossly negligent management causing death". The Bill is based on the Law Reform Commission Report on Corporate Killing dated October 2005 which recommended that a new offence of corporate manslaughter be created. The Bill is currently at the initial parliamentary review stage. Criminal liability is fault-based and must be proven beyond reasonable doubt.

1.2 Does the state operate any schemes of compensation for particular products?

This has been known to happen in Ireland in circumstances where some organ of the State may have a liability. The National Treasury Management Agency (the "NTMA") manages personal injury and property damage claims against the State. When performing these functions, the NTMA is known as the State Claims Agency (the "SCA"). Whilst this particular case was excluded from the SCA's remit, the most notable instance was the Hepatitis C Compensation Tribunal, which was set up in 1997 to compensate women who had become infected with Hepatitis C having been transfused with infected blood during pregnancy. More recently, the 'Surgical Symphysiotomy Ex-gratia Payment Scheme' was set up in 2014 to compensate women who underwent historical symphysiotomy procedures in the State. There is also a scheme to compensate haemophiliac plaintiffs of contaminated blood products. Such schemes are ad hoc, rather than statutorily required.

1.3 Who bears responsibility for the fault/defect? The manufacturer, the importer, the distributor, the "retail" supplier or all of these?

Statute

As stated above, S.2(1) of the 1991 Act makes the "producer" of the defective product liable in damages caused wholly or partly by the defect in his product. In this regard, S.2(2) of the Act defines "producer" as:

the manufacturer or producer of a finished product; the manufacturer or producer of any raw material, or the manufacturer or producer of a component part of a product; in the case of products of the soil, of stock-farming and of fisheries and game, which have undergone initial processing, the person who carried out such processing; any person who, by putting his name, trademark or other distinguishing feature on the product or using his name or any such mark or feature in relation to the product, has held himself out to be the producer of the product; any person who has imported the product into a Member State from a place outside the European Communities in order, in the course of any business of his, to supply it to another; or the supplier of the product where the manufacturer of the product cannot be identified through the plaintiff taking reasonable steps to establish his identity and where the supplier fails to identify the manufacturer of the product within a reasonable amount of time of a request being made. Tort

Under the law of tort, the test to be applied is whether a particular individual, e.g. the manufacturer, retailer, supplier or importer, owes a duty of care towards the injured party. If such a duty is owed and has been breached, that person is capable of having responsibility. It is clear that the manufacturer of a product will owe a duty of care to all those who may foreseeably be injured or damaged by his product. The same will apply to retailers, suppliers and importers, though the scope of their duty will typically be narrower than that of manufacturers, extending to, for example, a duty to ensure that their stock is not out-of-date. In practice, a plaintiff will not be required to choose which of a number of possible defendants to sue, and any or all potential tortfeasors are likely to be sued.

Contract

Under the 1893 Act and the 1980 Act, the seller will, subject to certain conditions and exemptions, have a contractual responsibility to the buyer in respect of faults or defects.

Criminal

In terms of the criminal law, the 2004 Regulations make a "producer" who places or attempts to place an unsafe product on the market guilty of an offence. The 2004 Regulations define a "producer" as:

the manufacturer of a product and any other person presenting himself as the manufacturer by affixing to the product his name, trademark or other distinctive mark, or the person who reconditions the product; the manufacturer's representative, when the manufacturer is not established in the Community or, if there is no representative established in the Community, the importer of the product; or other professionals in the supply chain, in so far as their activities may affect the safety properties of a product placed on the market. The 2004 Regulations also make distributors who supply or attempt to supply a dangerous product, which they know, or it is reasonable to presume that they should know, is dangerous, guilty of an offence. In this regard, a "distributor" is defined as any professional in the supply chain whose activity does not affect the safety properties of the product.

1.4 May a regulatory authority be found liable in respect of a defective/faulty product? If so, in what circumstances?

In principle, a regulatory authority could be found liable in tort in respect of a defective / faulty product where the requisite elements of the claim (as outlined in response to question 1.3 above) are established. For example, such a claim might arise on the basis that the regulatory body had knowledge of a defective/faulty product but failed to order the producer of the product to take appropriate action, such as ordering the producer to issue a product recall, for example, and in circumstances where the defective/faulty product has then caused harm to the claimant. However, in practice, such claims are difficult to establish against regulatory authorities and the claimant will need to show something akin to "bad faith" on the part of the regulatory authority concerned.

1.5 In what circumstances is there an obligation to recall products, and in what way may a claim for failure to recall be brought?

Under S.9 of the 2004 Regulations, the CCPC is given the power to "take all reasonable measures" to ensure that products placed on the market are safe, including issuing a direction ensuring "the immediate withdrawal of [a] product from the marketplace, its recall from consumers and its destruction in suitable conditions". Under S.9(2) of...

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