Liability of Producers
Producers of products have certain legal liabilities in relation to consumers. Product liability legislation makes provision in relation to dangerous or defective goods which cause damage or harm. Most goods and products are covered. There is deemed to be a defect, if the safety of the product is not such as would generally be expected
Where damage is caused by a defect in a product, a range of persons are potentially liable for the damage. Under the legislation, the consumer can sue the producer, any person who puts his name on product or uses a trade mark in relation to the product, an importer and anyone who has held himself out as being the producer. This covers persons such as the manufacturer and persons who have undertaken any industrial or other process which affects the essential characteristics of the product. Producers include manufacturers and also persons who import into the European Union. Distributors will not generally be liable to consumers.
Producers have a duty to ensure that all products they sell are safe. Safety covers safety in relation to components and covers risk of damage to property as well as risks of death and personal injury. Producers must take action to warn about the potential risks, ensure customers that information help them understand the risks. They must monitor the safety of products by keeping registers of complaints and undertaking investigations and testing. They must take action if a safety problem is found.
Even if a business does not manufacture products, it still has safety obligations. It must pass on safety information to consumers. It must help monitor product safety when investigating complaints and passing information back to the producers. It must co-operate with the producers e.g. in the event of recall. It must notify the authorities of unsafe products. It must retain relevant documentation to enable the origin of the unsafe products to be ascertained. A business must take an active approach to prevent safety problems.
Persons harmed by an unsafe product can take legal action for compensation, even if they did not purchase the product themselves. A consumer who has been injured by a dangerous product must take action within three years from the date on which the damage arises. Ccompensation can be sought for death or personal injury and well as damage or loss of private property of at least £175 in value. The amount which may be recovered will depend on the damage done and the loss caused.
Defences
A producer may be able to show that he may be able to avoid legal liability, if it can show that he could not be reasonably expected to discover the safety defect. This may be the case if scientific evidence first comes to light after the manufacture sells. It may also be possible to show that the goods are counterfeit, that the defect was an inevitable result of complying with other laws, that the defect was caused by a third party or that the goods were not supplied in the course of business. It is not enough to show that the user was careless. This may however reduce the level of damages payable to the claimant.
A producer such as a manufacturer must ensure that safety is a key part of the process. Safety must be considered at all stages from design to selling. Specific regulations may apply to products and these must be complied with. It is possible to join an appropriate quality assurance scheme. Importers are responsible in the same way as manufacturers.
In order to avoid liability as intermediary, it is necessary to show the products were not faulty when supplied, to show that consumers are given adequate safety instructions and warnings about the use and to show the terms for return of faulty goods to the manufacturer or processer were included in the sales contract.
Insurance and Enforcement
Product liability insurance covers physical products that are sold. Product liability insurance covers against compensation awarded as a result of damage to property or personal injury caused by a businesses products. Product liability insurance will cover against risks that a quality control system cannot trace. The insurance will not cover loss arising by use of an inferior product or bad workmanship.
Before issuing the policy the insurers will want information regarding the manufacture process, staff supervision, equipment etc. Most businesses take insurance cover between £1million and £5million.
Most enforcement in the United Kingdom is undertaken through Trading Standards Offices. Trading Standards Officers can seize goods when they are unsafe. They have rights to enter premises to ensure enforcement. They can apply to Court for Orders. They can issue Orders stopping the sale of unsafe products. They can prosecute for breach of legislation.
