Product Liability Notes

Product Liability

Remedies under contract law

• If C could show a contractual relationship between himself and D

  • Then could claim for defective product

    • Advantage = C would not be required to show fault of seller

      • Merely that seller in breach of the term of contract

    • Equally, no problem in awarding damage caused by defective property, whether personal or injury

    • Will also award compensation for replacement

    • And Sales of Goods Act 1979 help with “implied terms”

      • If you buy something from a shop, there is a contract with implied terms that

        • Product will be of satisfactory quality

        • And fit for purpose

  • Disadvantages of relying on contract law for remedy are many:

    • Must be a term in contract which provides products should not be defective

    • Subject to Contract (Rights of Third Parties) Act 1999, Privity rules stop third parties from claiming and taking advantage of terms contracted between parties.

    • Seller may exclude liability for the breach owing to exemption clauses

      • Although Unfair Contract Terms Act 1977 does help to negate this problem

    • Chain of contracts between parties mean liability will eventually flow back to the manufacturer

      • BUT chain can be easily broken by exemption clauses or insolvency of one of the parties, meaning claim may fall arbitrarily on one party in the chain, regardless of fact it is manufacturer’s fault.

Remedies under Tort law – negligence

• Before developments in the law, only if product was inherently dangerous (e.g. dynamite) and classified as such would M owe duty to warn recipient of the danger

  • Scrutton LJ: shouldn’t be a difference between “dangerous” products (e.g. poison) and products which by negligent construction become dangerous

    • The latter is probably more dangerous because it is a wolf in sheep’s clothing

      • rather than an obvious wolf like the former

• Donoghue v Stevenson [1932]:

  • Lord Buckmaster (dis):

    • Breach of D’s contract with A to use care and skill in and about the manufacture or repair of an article

      • does not of itself give any cause of action to B.

        • when he is injured by reason of the article proving to be defective

    • Exceptions to the rule exist

      • When product is inherently dangerous and B comes to harm owing to A not taking reasonable care during manufacture

      • When product is not inherently dangerous and B comes to harm owing to A failing to disclose a known defect.

  • Lord Atkin:

    • If M prepares goods knowing they will be opened by the ultimate consumer (X)

      • before X has any chance of inspecting the goods/ reasonably ascertaining any problem before purchase

      • Then if M, by negligence, causes the goods to be poisoned

        • X should have a remedy against M.

          • If this is not the law, it should be.

• What is the scope of negligence liability?

  • Must be a product

    • Donoghue v Stevenson [1932]:

      • Lord Atkin: anything manufacturer knows/should reasonably know might be used by not just the ultimate purchaser but someone else.

  • Need to establish normal duty of care

    • But this can be applied to anyone involved in any part of the manufacturing process

      • And to people other than the recipient

      • E.g. tyre flies off of van owing to negligent repairs and injures bystander

        • Repairer is liable to that bystander, even they were not the recipients of the repair (the drivers/owners were).

  • And breach

    • There is a presumption that adequate care has not been taken if the product is defective

      • Grant v Australian Knitting Mills [1936]: C injured from wearing underpants with too much sulphur in them, even though D claimed to have taken many precautions to stop this very problem.

      • Lord Wright:

        • Fact product is defective is all C can reasonably be expected to prove – can’t be expected to show where in the process reasonable care was not taken

          • Thus, presumption = if C proves defect = not reasonable care

            • And it is up to D to show that reasonable care was taken despite the presence of the defect

  • Stuff you can claim

    • Personal injury

    • Property Damage

    • Murphy v Brentwood [1991]:

      • But not PEL – which is essentially the cost of repair or replacement of the defective product.

• Defences

  • Reasonable possibility that product was interfered with after leaving M

    • M only liable if it was M’s fault

    • Grant v Australian Knitting Mills [1936]:

      • However, mere possibility that the products could have been interfered with after leaving manufacturer is irrelevant

        • Only if interference of X causing defect can be shown to be “reasonable possibility” will M not be liable

  • Caveat Emptor – C or another could have inspected the product for defects before use

    • In Donoghue v Stevenson the ginger beer bottle was opaque and impossible to inspect without opening, which would only be done after purchase.

      • But where reasonable opportunity for supplier to examine product for obvious defects after receiving from M.

        • Then supplier will be liable, not M for any subsequent injury to C or C’s property.

          • But not where M knows no inspection will be carried out on the product owing to its immediate use

  • M places warning to product must be examined before use.

Liability under statute – CPA 1987

Who can sue and what is actionable damage?

• S.5(1)

  • the person who suffers

    • Personal Injury

    • OR Property Damage

      • as a result of a defective product.

• S.5(3) Unless product is not

  • (a) ordinarily intended for private use

  • (b) intended by the person suffering the loss or damage mainly for his own private use, occupation or consumption

• S.5(2)

  • Or property damaged came with the defective product (so no PEL)

Who is liable?

• S.2(5) – If more than one tortfeazor under different...

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