Are any defences available? If so, please summarise them.
The general defences available in strict liability cases under tort law provide that: (a) the injury was due to an act of God; (b) the injury was caused because of the fault of the aggrieved party; (c) the injury was because of an act of a third party (unless it was foreseeable); or (d) the risk of injury was inherent to the activity and the activity was done with the aggrieved party's knowledge and consent.
The PLA sets forth two types of defences against claims for damages based on product liability (Article 4 of the PLA):
(i) the defect in such product could not have been discovered given the state of scientific or technical knowledge at the time when the manufacturer, etc. delivered the product; or
(ii) in case where the product is used as a component or raw material of another product, the defect occurred primarily because of the compliance with the instructions concerning the design given by the manufacturer of such another product, and that the manufacturer, etc. is not negligent with respect to the occurrence of such defect.
Both defences are high standards. In fact, we have never encountered any case in which the court ruled that product liability is exempted by (i) above.
In practice, the main defence is to deny the ‘defect’. Typical defences with regards to design defect cases, for example, are (a) the product provides the level of safety that such a product ordinarily should provide, taking into account the nature of the product, etc., (b) the alleged manner of use of the product is not ordinarily foreseeable, or (c) the alleged defect occurred after the delivery of the product, etc.
Claimants often argue that the manufacturer, etc. did not provide sufficient warning/instruction in addition to arguing for design defect or manufacturing defect. Although the defences against insufficient warning/instruction will vary depending on the product and the nature of the alleged risk, defendants often counterargue that (a) the alleged risk is obvious or (b) such warning should be provided by interpretation of the instruction handbook, etc.
In addition to this, the causal relationship between the alleged defect and the alleged damages and whether the amount of damages is reasonable are frequently the issues in question.
Under the Regulation on Liability for Damages caused by Defective Products (25137), the producer or manufacturer of a product may not be held liable for damages where:
- the product has not been launched;
- the product has not been produced for sale or in the course of commercial activities;
- considering all facts and circumstances, the product is found to have had, at the time of launch, no defect that caused the damage;
- the technical specification of the product has caused the damage; or
- the scientific and technological knowledge at the time of the product launch meant that the defect could not be perceived.
In addition, the producer or manufacturer of a part, forming the whole, is not responsible for the design of the final product or the instructions of use of such product.
An amendment to the Law on Consumers’ Protection (6502) has been proposed to exempt sellers, producers and importers from liability with regard to, among other things, the expiry of a warranty term and user errors.
Where a person who is responsible for product liability proves any of the following facts, he/she will be exempted from any liability for damages. However, even if an exemption under (2) through (4) below is applicable, the manufacturer/supplier cannot claim the defence if he/she knew, or should have known, of the defect after supplying the product but nevertheless failed to take appropriate measures to prevent the occurrence of damages caused by the defect .
(1) That the manufacturer did not supply the product
The manufacturer may be exempted from liability under the Product Liability Act if it proves that the product has been distributed unintentionally. Whether or not the manufacturer is at fault does not affect the grounds for the exemption. However, if the manufacturer is at fault for such unintentional distribution, and damage has occurred as a result of such unintentional distribution, then the manufacturer may be liable for damages under general liability laws (see 7. below).
(2) That the existence of the defect could not be identified by the state of scientific or technical knowledge at the time when the manufacturer supplied the product
(3) That the defect is attributable to the manufacturer’s compliance with the applicable standard prescribed by law effective at the time when he/she supplied the product
(4) In the case of the manufacturer of raw materials or components, that the defect is attributable to the design or manufacturing instructions provided by the manufacturer of the product made of the relevant raw materials or components.
There are a number of specific defences to an action based on a claim that goods have a safety defect:
- the defect alleged did not exist when the goods were supplied by the manufacturer;
- the goods were defective only because there was compliance with a mandatory standard (see further below);
- the state of scientific or technical knowledge at the time the goods were supplied was not such as to enable the defect to be discovered (the so-called ‘development risk’ or ‘state of the art’ defence) (see further below); or
- in the case of the manufacturer of a component used in the product, the defect is attributable to the design of the finished product or to any markings, instructions or warnings given by the manufacturer of the finished product, rather than a defect in the component.
Compliance with mandatory standard
Under the defective goods action provisions, it is a defence that the goods had the defect only because there was compliance with a mandatory standard. A mandatory standard is a standard for the goods or anything relating to the goods which, under law, must be complied with when goods are supplied, and which carries a penalty for non-compliance. A standard which simply requires a minimum standard to be achieved is not a mandatory standard.
In an action for negligence and under the statutory guarantee provisions of the ACL, compliance with regulations or standards is a relevant factor in determining whether goods are as fit for the purpose(s) for which goods of that kind are commonly bought as is reasonable to expect.
Development risk defence
If a product is found to have a safety defect under the ACL, the manufacturer or supplier can argue what is commonly referred to as the “state of the art defence” or “development risk defence”. The manufacturer or supplier must establish that the state of scientific or technical knowledge at the time when the product was supplied by its actual manufacturer was not such as to enable the defect to be discovered.
The producer shall not be held liable if:
- The damage is caused jointly by a defect in the product and the fault of the victim or a person for whom the victim is responsible;
- The damage is caused by force majeure.
Articles 1245-9 to 1245-16 of the Civil Code provide for the following specific defences:
- The defendant cannot be qualified as the producer of the defective product, meaning that (i) the defendant did not put the product into circulation and (ii) if the product was put on the market by the defendant, it was not intended to be sold or distributed in any manner;
- The absence of a product defect, the burden proof lying with the defendant;
- The state of scientific and technical knowledge, at the time the product was put on the market, did not allow the existence of the defect to be detected. This is not applicable where the damage was caused by an element of the human body or by products derived from it;
- The defect is due to the conformity of the product with mandatory legislative or regulatory rules, the defendant remaining however liable for a defective product that has been manufactured in accordance with existing standards or has been the subject to administrative authorisation;
- The damage is caused jointly by a defect in the product and by the fault of the victim or a person for whom the claimant is responsible.
When the lawsuit is filed, the judge must summon the defendant to present a defence, which will be the first opportunity to explain the reasons why the lawsuit should be ruled groundless.
In such opportunity, the defendant should prove it is not liable for the damage claimed. In order to do so, it must prove (i) the in existence of the defect; (ii) the defendant did not insert the product in the market; or (iii) exclusive fault of the consumer or a third party.
Article 41 of the Product Quality Law provides for three statutory grounds that exempt product liability:
- The product has not been put in circulation;
- At the time when the product was put in circulation, the defect which caused the damage did not exist; and
- The existence of the defect could not have been detected due to the science and technology level at the time when the product was put in circulation.
In addition, the defendant may also rely on the general defenses of tort law:
- In the event that there is no causal link between the defect and the damage suffered by the defendant, the producer or seller of the product need not assume liability. For instance, if the injury or property loss is caused by the plaintiff’s gross negligence, such as failure to properly follow the instructions in the product manual; and
- If the statutory limitation of the plaintiff’s claim has expired, then plaintiff would be time-barred from bringing claims against the producer or seller. This is explained in more detail in Question 6 below.
The CPA provides certain specific and limited defences, namely that:
- the defect is the result of complying with a requirement of UK or EU law;
- the defendant did not at any time supply the product to another person;
- the supply by the defendant was not in the course of a business;
- the defect did not exist in the product at the time of supply;
- the state of scientific knowledge at the time when the product was put into circulation was not such that a producer of products of the same description could be expected to discover the defect in its products (the "development risk" or "state of the art" defence); or
- the product was included in another defective product and the defect was attributable to that other defective product.
It is not a defence to claim that a product was manufactured in accordance with safety standards or accepted practices, nor it is a defence that it would be too costly or difficult to fix or avoid the defect.
Where fault on the part of the injured person has contributed to the damage, the damage claim is reduced accordingly (concept of contributory negligence, Section 254 of the German Civil Code). Also, In the case of damage to property, the injured party has to pay for damages up to an amount of 500 euros himself. The producer is even not liable at all if he did not put the product into circulation or had never intended to do so, if it can be assumed that the defect did not exist at the time when the product was brought into circulation, the defect is due to compliance of the product with mandatory regulations or if the state of scientific and technical knowledge at the time when the producer put the product into circulation was not such as to enable the defect to be discovered.
Several defences against product liability claims are available to manufacturers and intermediaries. The doctrine of “development damage” might prevent liability, where it is found that a product was not defective when it was brought into circulation, but where subsequent knowledge has shown that, according to the current technical or scientific knowledge, it would give rise to liability to use the product.
The doctrine of “system damage” might prevent liability in cases where an inherent danger, which is characteristic of the product, is accepted by users, e.g. tobacco´s tendency to cause cancer.
Where contributory negligence on the part of the claimant is established, the damages may be reduced.
It is often an effective mean of defence to refer to the fact that the product complies with all applicable standards and requirements, since proving this fact may mean that no consumer rights were violated with the distribution of the product.
As a matter of procedure, the respondent is allowed to challenge any piece of evidence that has been submitted by the consumer and state that the respective evidence does not contain a clear proof of the fact of a defect or damage caused.
The parties are able to ask the court to verify the documents submitted to the case files if they suspect them not to be authentic.
Applying to the court for assistance in collecting evidence may often help with obtaining objective facts that exclude possibility of existence of defects at a certain period of time or even existence of the alleged damage on the consumer’s side.
Even if the defects were proven by the consumer, the respondent still may rely on the existence of circumstances that release the latter from liability (namely, the consumer ignoring the requirements of the product manual, etc).
There are a number of defences available, namely:
- the product was not defect at the time of sale but rather the defect occurred after it was brought in circulation (reduced burden of proof for the defendant: he has to show that, having regard to the circumstances, his claim of the defect occurring after the product was brought into circulation is plausible)
- the defect can be attributed to a legal provision or official instruction with which the product had to comply,
- the defect was not seen as a defect according to the state of technology at the time when the product was put into circulation by the person against whom an action is brought
- the defendant has merely produced a raw material or a component part and the defect was caused by the design of the product in which the raw material or component part was fitted, or by the instructions given by the producer of the product.
- the injured person or a party for whose conduct he is responsible contributed to the fault that led to the damage (partial or full defence, depending on the severity of the conduct)
- the defendant did not bring the product in circulation or denies his status as an entrepreneur
Lack of guilt (culpability) is not available as a defence under the Product Liability Act.