Product Liability Notes

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TABLE OF CONTENTS

Textbook...........................................................................................................................................................2
Articles..............................................................................................................................................................5
Fairgrieve and Howells, "Rethinking Product Liability" (2007) 70 MLR 962-978.............................5 stapleton, products liability.......................................................................................................................................6
Whittaker, liability for products..............................................................................................................................7
Tettenborn, "Components and Product Liability" (2000) LMCLQ 338.................................................10
Polinsky and Shavell, A Skeptical attitude about product liability is justified...................................11
Stapleton, 'Products liability reform - real or illusory?' (1986) 6 OJLS 392.......................................11
Stapleton, "Products Liability in the United Kingdom: Myths of Reform" (1999)............................13

Negligence....................................................................................................................................................13
Grant v Australian Knitting Mills [1936] AC 85 (Inference of negligence).........................................13
Hamble Fisheries v Gardner [1999] 2 Lloyds Rep 1 (PEL)........................................................................14
Howmet v Economy Devices [2016] EWCA Civ 847, [75]-[101], [109]-[113] and [115]-[129]....15

Strict Liability..............................................................................................................................................16
Rationale............................................................................................................................................................16
Escola v Coca-Cola Bottling Co (1944) (US)....................................................................................................16
*Directive on Liability for Defective Products (85/374/EEC)....................................................................16

The Law..............................................................................................................................................................17
C 300/95 Commission v UK [1997] All ER (EC) 481.....................................................................................17
*A v National Blood Authority [2001] 3 All ER 289, [2]-[22], [31]-[81]................................................18
Wilkes v Depuy [2016] EWHC 3096 (QB)..........................................................................................................22
Tesco Stores Ltd v Pollard [2006] EWCA Civ 393, [2006] All ER (D) 186...........................................24
Boston Scientific Medizintechnik GmbH v AOK Sachsen-Anhalt-Die Gesundheitskasse (C503/13) (2015) 144 BMLR 255..............................................................................................................................24
St Albans City and District Council v International Computers Ltd [1996] 4 All ER 481
(computer disk containing a program)...............................................................................................................25

Tort and other compensation systems............................................................................................26
Atiyah, Damages Lotteray, Chapter 8.................................................................................................................26
Burrows, "In defence of tort" in Burrows, Understanding the Law of Obligations, 1998.............26

Tort and insurance....................................................................................................................................27
Weinrib, 'The Insurance Justification and Private Law' (1985) 14 JLS 681........................................27
Stapleton, 'Tort, Insurance and Ideology' (1995) 58 MLR 820................................................................27
Morris, 'Spiralling or Stabilising? The Compensation Culture and Our Propensity to Claim
Damages for Personal Injury' (2007) 70 MLR 349 (see also Compensation Act 2006, s 1).........28
Coleman, Risks and Wrongs (OUP 1992), pp.205-209................................................................................28

TORT: PRODUCT LIABILITY

Page 1 TEXTBOOK
- Evolution of product liability law in England
Movement away from negligence towards strict liability:-19C = obligations that originated in contract could not be extended beyond the scope of the agreement (Winterbottom v Wright, per Lord Abinger) - rule of non-liability of manufacturers except things that are "inherently dangerous" (explosives, poison...) and fraudulent misrepresentations made directly to the plaintiff.
Donoghue v Stevenson = negligence liability for manufacturers (preferring tort over privity rule in contract) - most serious restriction is the need to show fault
Grant v Australian Knitting Mill (chemical in underwear) = fault can sometimes be inferred
(per Lord Wright (PC): "the process was intended to be foolproof. If excess sulphites were left in the garmet, that could only because someone was at fault. The appellant is not required to lay his finger on the exact person in all the chain who was responsible or specify what he did wrong. Negligence is found as a matter of inference from the existence of the defects taken in connection with all the known circumstances")
o //US allowing the application of res ipsa loquitur (reversing the burden of proof where it can be shown that D had exclusive control of the thing that caused the accident and where no explanation other than D's negligence is forthcoming) to product liability
(Escola v Coca-Cola Bottling Co) - though English law didn't allow it, it basically achieves the same result
However, Evans v Triplex Safety Glass = inference of fault is not always drawn (here the court declined to draw and inference of fault against the manufacturers of toughened safety glass which broke, holding that the fault could have occurred when the glass was fitted, and that suppliers had sufficient time to check it) - possibility of intermediate examination and length of time between manufacture and accident might prevent an inference of negligence

//US rule also doesn't assist in every case because what the consumer wants is to sue everyone down the chain, whereas no res ipsa loquitur can apply when the supplier (for example) receives the goods in a sealed container and therefore examination is impossible

- Background to the Consumer Protection Act 1987-

Before 1987 C had two avenues of recourse for dangerously defective products:
o Sue seller in contract (strict liability under s14 Sale of Goods Act 1979)
o Sue manufacturer in negligence (only liable if at fault and harm foreseeable)
Consumer Protection Act 1987 gave third avenue (s2) to sue producers or importers bringing in products from outside EU
o Strict liability

Only liable for physical injury or harm to C's property (like in negligence)
o Originated from EU directive seeking to harmonize product liability laws across the EU
because disparities distort competition and free movement of goods
-Failed its objective:
-Directive only harmonized product intended for private use ([?]
commercial property)
-MSs didn't have to implement all aspects of directive + option of introducing a cap on liability
-Didn't harmonize remedies for physical injury
-Therefore real objective could be to improve health and safety

- Definition of 'Product'S1(2): any goods or electricity, includes product comprised of another product, manufactured
+ natural products (flowers, animals...))
Probably includes body parts and blood

TORT: PRODUCT LIABILITY

Page 2 A v National Blood Authority held that contaminated blood counts as a product under the Act
Unclear whether inaccurate map or faulty software would count (physical item would not be defective; only information on it will be). Issue not yet resolved by Courts o- Defect--

S3: adopts a legitimate expectations test for determining whether a product is defective

Legitimate expectation test holds that there is a defect in the product if the safety of the product is not such as persons generally are entitled to expect
-Caselaw takes the test as setting a limit on when a product will be regarded as defective: if product has feature X but people expect it to, then it will not be defective. If people don't expect it to, it will be defective if consistent with the policy of the Act. Same is true of where people expect a product to have feature
Y but the product doesn't.
o A v National Blood Authority: (feature X case) Cs infected with hepatitis C after receiving blood transfusions containing blood donated by people with the virus. At the time of infection, no test existed to detect whether a given bag of blood contained the virus. Cs sued the National Blood Authority, who couldn't rely on legitimate expectation test because people generally didn't know the risk of being infected with hepatitis C and couldn't say that it would have been very difficult to avoid giving Cs contaminated blood because the Act imposes strict liability. Burton J held that the blood was defective,
because holding otherwise would not be strict liability.
o Tesco Stores Ltd v Pollard: (feature Y case) Dealt with what Burton J called in A v
NBA a "non-standard product" - D manufactured a dishwasher bottle with a childresistant cap with evidence that it wasn't as strong as intended. A small child, C,
opened the cap and got sick eating the powder. Held that it wasn't defective as people generally expected child resistant caps to be stronger than regular caps and this one fulfilled the expectation. No evidence in the Act suggests that defective product liability is to hold Ds to their design standard.
Standard products cases (cases where product is served exactly as expected, eg. coffee served at the right temperature but knocked onto customer by another customer) are more difficult because it is not immediately clear that the legitimate expectations test will rule these out as defective (not clear that customer expected coffee to be served at a temperature capable of burning)
Law must weigh benefits of safety mechanisms against cost of over-protection
Law seems to be that court will only hold a product defective if in retrospect the benefits of installing/removing a feature outweigh the costs

B v McDonald's Restaurant Ltd: C sued McDonald's when scalded by coffee spilled on them (wouldn't have scalded if served at 55 degrees rather than 90). Held not defective because the costs (loss of custom) outweigh benefits.
o Worsley v Tambrands: C argued that a box of tampons was defective because it didn't contain a full warning of TSS on the box but only in a leaflet inside box (so if leaflet is thrown away C wouldn't get adequate warning). Rejected claim - the rarity and gravity of TSS must be balanced, and the right balance is struck by the warning on the box and the full explanation in the leaflet
However a standard product can still be defective under the Act even if not defective under negligence

Abouzaid v Mothercare: C injured attempting to fit sleeping bag onto pushchair by letting go of an elastic strap that hit him in the eye. Held not defective under negligence because not foreseeable that the type of sleeping bag would injure someone like C, but held defective under the Act because the bag could have been designed to a higher safety standard and in retrospect it would have been desirable to improve it (easy, no added cost).

- DefendantsAvailable defendants:

TORT: PRODUCT LIABILITY

Page 3 -o Producer

Anyone who held themselves to be producer

Importer into EU
S1(2) defines producer as manufacturer of a manufactured product or the person who won/abstracted a natural product (eg. coal), or if a product is neither manufactured nor won/abstracted but associated with a process (eg. wheat in agriculture) then the person who carried out that process is producer
S2(3) allows C to sue supplier if producer can't be found, who will be liable if they don't within a reasonable time identify the producer or who supplied the product to him
Sometimes C can sue multiple producers (eg. a defective tyre installed onto a car; both tyre and car are defective)

- Damage-

S5(1) defines damage as death or personal injury or loss/damage to property inc. land

Personal injury: any disease and other impairment of a person's physical or mental condition
-Suggests possibility to sue for psychiatric illness where negligence not possible
(eg. driver hits pedestrian because of defective tyre; bystander suffers psychiatric injury from shock. May be able to claim from tyre and car manufacturer under Act)
o Limits to property damage:
-Auto-destruction (can't sue in respect to damage to product where defective product comprises it - eg. if car was damaged, tyre manufacturer would not be liable for cost of car. However if driver changed the tyres subsequently then manufacturer of new tyres would be liable for car's damage)
-Law of negligence more generous: will allow C to sue for damage to rest of product caused by faulty part as long as it can be shown that the part and whole are separate property
-Damage to commercial property (must be damage to property not injury)
-Trivial damage to property (less than 275 pounds)
-Unclear whether aggregation is possible (multiple items damaged each under 275 pounds)
In case of death, depndents of the deceased may sue based on their economic dependency by virtue of section 6(1)(a) CPA 1987, which dems death to have been caused by a "wrongful act, neglect or default" for the purpose of s1 Fatal Accidents Act 1976

- Causation and Remoteness-

The CPA 1987 doesn't deal explicitly with causation and remoteness so courts have to apply the but-for test and 'legal cause' derived from general principles. However, even though s2(1)
implicitly places the onus of proof on the claimant to establish the causal link (by providing that a causal link between defect and damage must be established), IAO negligence rules should perhaps be adapted in a strict liability case (ex. through using 'probabilistic cause',
partial reversal of burden of proof (Fairchild), market share approach to apportioning liability...).
o However, though it is necessary to prove that the defect caused the injury, it is not necessary to prove what caused the defect (Ide v ATB Sales)
For remoteness there is a case for limiting Wagon Mound I (D will not be liable for a type of damage that was not reasonably foreseeable) to negligence and not limit the extent of liability in strict liability, or at least if Wagon Mound is applied, ensure that the notion of 'type of damage' is broadly defined at least in relation to physical injury

- DefencesS4(1) sets out range of defences:
o Defect attributable to compliance with requirements imposed by Community obligation

D didn't put product into circulation (car stolen from manufacturer in warehouse)

TORT: PRODUCT LIABILITY

Page 4 Product not supplied in course of business and not produced, branded or imported with view to profit (eg. poisoning by cake donated by parent at schools fair - however if bakery donated then would be liable because course of business)
-However, CJEU has held that the Directive applied even where the activity in question had no economic or business purpose and the product is used in the course of a specific medical service financed entirely from public funds (patient doesn't pay any consideration) - Henning Veedfeld v Amtskommune), and
Burton J in A v NBA agreed with the AG in Veedfald that there was no necessary reason why a public authority or non-profit-making organization should be in a different position from a commercial producer.
o Defect didn't exist at time he supplied the product to someone else (if car buyer switched tyres out for faulty ones)
-In Piper v JRI D argued that because of the steps it took in its manufacturing processes, the defect could not have existed in the product at the time of supply and this was accepted by the court as establishing the defence! The reliance on the system for manufacturing the product generally (and not evidence relating to the specific product in question) is surprising - but it probably won't work unless an alternative possibility for how the defect might have arisen can be shown (so probably won't work in Grant v Australian Knitting Mills)
o State of scientific and technical knowledge at time product was put into circulation didn't enable existence of defect to be discovered (drug with dangerous side effect nobody knew about)
-A v National Blood Authority: Defence may also be available in manufacturing defect cases where product doesn't conform to intended design (eg. computer chip manufacturer makes one out of a million defective chips with a microscopic flaw that caused an airplane to crash because of malfunction. May be able to argue 'development risks defence' that it wasn't possible to identify the chip as defective). However held in A v NBA that this defence is not available if manufacturer was aware at the time of manufacture that there was a risk that the product might not conform to intended design in that way (thus defence unavailable to NBA because they knew there was a risk blood would contain hepatitis C though they couldn't identify which bags did)
o The defect was in a product where product in question was comprised and was wholly attributable to the subsequent product, or to compliance with instructions given by producer of subsequent product
Defences NOT available

Voluntary assumption of risk (eg. where doctor warns patient of risks to plastic surgery and patient goes ahead anyway)
o More good than harm o- Limitation-

Three years from the date on which the action accrued (or, if later, the date of his knowledge of the material facts giving rise to the cause of action

Starts to run from the time the product is put into circulation (O'Byrne v Sanofi), i.e.
taken out of the manufacturing process and entering a marketing process in a form in which it is offered to the public.
Ten year long-stop (which cannot be overridden by the court for personal injury claims under s33 Limitation Act 1980)

- ExclusionStrict liability: Defendants cannot exclude or limit liability through contractual terms (s7 CPA
1987)
Negligence: ability to limit/exclude liability subject to Unfair Contract Terms Act 1977
(excluding business liability for death or personal injury caused by negligence is void, and those covering property damage or economic loss must be "reasonable")

TORT: PRODUCT LIABILITY

Page 5 - Remedies-

Both consumers and third parties can sue as long as they suffered actionable damage
Act silent on range of third parties who can sue

Eg. pedestrian who suffers nervous breakdown over car with defective tyre then rapes someone, or is so upset that his mother has to quit work and take care of him from the stress of which she suffers a nervous breakdown. Will rape victim and mother be able to sue car manufacturer?
S6(1) allows dependants to sue in case of fatal accidents under Fatal Accidents Act 1976
S7 makes it impossible to exclude liability under the Act
Presumably the same rules for remoteness as negligence apply
S6(4) allows reduction of damages for contributory negligence (if C knew the product was defective but carried on using it anyway)

- Justifications for Strict Liability under the Act-Difficult to prove negligence on the part of manufacturer, so strict liability is the most efficient way to compensate people who should be entitled to sue in negligence but can't prove. Some
Ds (like Abouzaid) who wouldn't be caught by negligence would be caught under Act, but doing small injustice to small number is better than injustice to large number of customers
Fletcher: holding a D liable in tort is justified when D's action exposed C to a non-reciprocal risk of harm
Keating: acts [?] activities - strict liability should govern the latter because risks are foreseeable and actor should have taken on insurance

BUT not always clear that the manufacturer is necessarily more able to take out insurance!!
Deterrence - strict liability may encourage a higher safety standard (effectiveness under debate)
Economic justification: some costs are internal and other external, while price often only reflects the internal costs. Strict liability ensures some of the external costs of the product are reflected internally through the price.

ARTICLES
FAIRGRIEVE AND HOWELLS, "RETHINKING PRODUCT LIABILITY" (2007) 70 MLR
962-978
Risk of divergence between MSs especially regarding the concept of defectiveness - might need to rethink product liability to ensure greater clarity as regards the underlying rationale supporting strict liability.
-Development Risks defence:
The development risks defence was thought of as necessary to protect innovation and ensure stable insurance costs, but the Commission's report recommended creating alternative compensation schemes for victims of development risks.
The report acknowledges that there is still some uncertainty over the scope of the defence (especially uncertainty as between absolute undiscoverability and undiscoverability by reasonable means).If absolute, then what about Recital 7 (establishing a fair apportionment of risks between producer and consumer as basis for defences)
If relative, then would reduce the Directive to a regime of negligence

NB pre-existing French law did not allow a development risks defence, which led the Cour de cassation to hold that the manufacturer of a medicine that was circulated before the transposition of the Directive could not use the defence.
-Compliance with regulatory standards = defence?
TORT: PRODUCT LIABILITY

Page 6 Article 7(d) Directive: defence = "defect is due to compliance of the product with mandatory regulations issued by the public authorities".
-This means that the defect itself must be attributable to compliance, which led the French implementation to introduce additional words: "a producer may be liable for a defect although the product was manufactured in accordance with the rules of the trade..." (Article 1386-10
Civil Code).
Discussion of the relationship between regulatory standards and defect has centred on whether failure to follow regulatory standards = defect:Tesco Stores v Pollard: Court rejected the argument that the bottle cap was defective because it did not comply with the British Standard as to the strength needed to open the safety cap,
holding that the public was only allowed to expect that a safety cap would be more difficult to open than a regular cap, which it was

BUT:District Court of Dusseldorf: violation of safety standards could constitute conclusive evidence of a product's defectiveness (though in this case unlike in Pollard the safety standards were mandatory, though IAO this wouldn't have made much difference)

STAPLETON, PRODUCTS LIABILITY
** Stapleton would probably argue that the current interpretation is unstable and tied to a dangerous extent to the expectations of human beings. As far as prediction goes Stapleton was wrong but she would probably argue that her interpretation would have been more stable.
IntroductionTwo principle criticisms of product rule reflected in s402a US Restatement of Torts echoed in criticism of 1985 Directive

1. Strict liability is unfair because it exposes producers to indeterminate loss associated with unforeseeable risks (IAO this is misguided as liability for unforeseeable risks is rare or nonexistent)

2. Too open-ended and vague a standard of liability for design defects (IAO this is also misguided)

Entitled Expectations to Cost/Benefit or Risk/Utility-Directive definition of defective problematic in application:
o Courts can look to intended use, expected circumstances of use (eg. pork is not defective because it needs cooking; clothes can't rely on needing washing)
o Does 'presentation' include warnings, instructions etc. in separate advertising? Must it emanate from manufacturer and not retailer?
Core problem in definition: circularity - what a person is entitled to expect is the very question that a definition needs to answer

Contract can help in judging legitimate expectation (luxury car can be expected to be of higher standard than cheap car)
o However tort is concerned with protecting bystanders so cannot rely on pre-existing transaction

Tort may apply higher standard than contract (drugs without child-proof lid may be marketable but not safe under tort)
o In simple cases (snails in beers and new brakes that misfunction) an expectation test is appropriate but in more complicated cases (foreseeable misuse, complex design systems where standard is not agreed or obvious) it is "misleading and inadequate"
In US the consumer expectation test was largely replaced with a cost/benefit test
Lord Griffiths acknowledges that while UK courts can't overtly apply cost/benefit analyses under Directive they can undertake a "balancing exercise of an analogous kind"

TORT: PRODUCT LIABILITY

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