Please summarise the main legal bases for product liability
The term ‘product liability’ has not been defined under any Indian statute. However, in accordance with the evolving jurisprudence around product liability claims in India, the term has generally been understood to mean the liability of any or all parties that form a part of the manufacturing and supply chain of a product, arising from any defect in the product and consequent loss or injury caused by the defective product.
In India, there is no one specific statute or law providing the entire legal framework for product liability claims. There exist multiple general and sector-specific laws that form part of the legal framework governing product liability in India, which, in certain instances may overlap depending on the sector and facts of the case.
Briefly, the substantive civil laws that relate to product liability in India are:
a the Sale of Goods Act, 1930 (SGA);
b the Consumer Protection Act, 1986 (CPA); and
c the Indian Contract Act, 1872 (the Contract Act).
Further, as India is a common law country, courts are influenced by principles of justice, equity and good conscience, and principles of tort law such as the duty of care, negligence and strict liability (including absolute liability in exceptional circumstances) in claims dealing with product liability. The provisions of the Indian Penal Code, 1860 (IPC), such as those relating to criminal negligence, fraud and cheating, may apply in cases of defective products supplied if criminal intent is ascribed to the acts of the manufacturers or suppliers.
Additionally, there are pan industry laws such as the Bureau of Indian Standards Act 2016 (BIS Act), and sector specific statutes such as the Food Safety and Standards Act, 2006 (FSSA), Drugs and Cosmetics Act, 1940 (the Drugs Act), and Motor Vehicles Act, 1988 (MVA) that govern product liability in India.
BIS Act sets out mandatory and voluntary standards and specifications applicable to products across different sectors and industries. If any goods or articles do not conform to a mandatory standard, the regulatory authority under the BIS Act has the power to issue directions to stop the supply and sale, and may recall the non-conforming goods or articles. BIS Act also provides for penal consequences, including fines and imprisonment for non-conformance, including non-conformance to prescribed standards. Other sector specific laws also place recall obligations in cases of defective products, and have penalty provisions for non-compliance.
The main legal basis for product liability is Article 3 of the Product Liability Act (Act No.85 of 1994, ‘PLA’), which describes special provisions of tort liability pursuant to the Civil Code. Between contractual parties, contractual liability should also be a main legal base.
Product regulation and liability laws have an important place in Turkey and are, on the whole, aligned with EU law.
Turkish liability laws are divided into two main categories covering product liability and product safety, respectively. With regard to product liability, the Law on Consumers’ Protection (6502) essentially implements the EU Product Liability Directive (85/374/EEC). The key objective of the law is to hold various groups (eg, producers and sellers of goods) liable for any damages caused by defective products. In relation to the protection of consumers’ rights, the Law on Consumers’ Protection is fully compliant with private law.
With regard to product safety, the Law on the Preparation and Application of Technical Legislation for Products (4703) implements the EU General Product Safety Directive (2001/95/EC). The law provides specifications and other compliance criteria for all products – whether consumer goods or industrial products – in order to prevent damage to users. The law generally contains administrative regulations.
The main legal bases for product liability are the Product Liability Act, and tort and contract liability under the Civil Act.
- Liability without fault under the Product Liability Act;
- Torts (Civil Act, Article 750); and
- Contract liability – seller’s liability for warranty against defect (Civil Act, Articles 580 and 581) and breach of contract (Civil Act, Article 390).
Australia’s product liability laws are a mixture of the common law and statute. A person who claims to have been injured or who has otherwise suffered loss or damage may commence an action for compensation on the following bases:
- the common law tort of negligence which is fault-based;
- contract (although such claims are rare); and
- breach of provisions of a number of statutes, the main one being the Australian Consumer Law (ACL).
For the purposes of this chapter, we will focus on consumer products or goods and in that regard, the ACL is the most important Australian statute. The ACL came into effect on 1 January 2011. It applies to transactions occurring on or after that date. The ACL replaces a collection of federal (also known as Commonwealth) and state consumer protection legislation with a single law which applies in all jurisdictions. The ACL is found in Schedule 2 to the Competition and Consumer Act 2010 (Cth)(CCA).
The main legal bases for product liability are the rules relating to strict product liability, tort law and contract law.
The French strict product liability regime was created by Law n°98-389 of 19 May 1998, transposing the European Directive of 25 July 1985 relating to liability for defective products (83/374/EEC).
However, a product being defective can also, under certain conditions, lead to criminal liability on the grounds of involuntary bodily harm, endangerment of the lives of others or deceit.
The main legal bases for product liability are (i) existence of a defective product insert in the market; (ii) a damage caused to the consumer; and (iii) the connection between the defective product and the damage caused.
Under PRC law, in the event that a person suffers damages as a result of product defects, it is entitled to bring actions either on the basis of tort or on the basis of contractual breach.
The tort basis for product liability claims is provided under the Tort Liability Law and the Product Quality Law. Article 41 of the Tort Liability Law provides that the producer or seller of a defective product shall be liable for damages caused by the product’s defects, and the Product Quality Law expands it with detailed rules. While the general principle of PRC tort law requires plaintiff to prove that defendant is at fault, product liability follows the principle of strict liability. Under the Tort Law and the Product Quality Law, the producer and/or seller of a defective product should compensate the infringed party regardless of whether they are at fault.
The contractual basis for product liability claims is provided under the Contract Law. Article 111 of the Contract Law provides that the seller of a product has an obligation to guarantee its quality. Failure to do so would constitute breach of the contract, for which the seller should be liable for reparation, replacement, refund, and/or monetary compensation.
If both causes of action are available, the plaintiff may choose on what basis it brings the action.
There are three principal legal bases:
- a strict liability claim under the Consumer Protection Act 1987 (CPA) which enacted the EU Product Liability Directive [Directive 85/374/EEC] (PLD) into English law. Such a claim relies on the product being deemed "defective" and having caused personal injury to the claimant or damage to private property;
- a claim under the tort of negligence. For such a claim to succeed, the product need not be deemed defective, but it must be shown that the defendant owed, and breached, a duty of care to the claimant who suffered damage as a result of that breach; and
- a breach of contract claim. A claimant would need to show that the seller of the product breached a relevant express or implied term of the contract of sale and that the breach caused loss, damage or injury.
For product liability the most important legal provisions are § 1 of the German Product Liability Act (ProdHaftG) and § 823 of the German Civil Code (BGB).
§ 1 of the German Product Liability Act is based on the European Product Liability Directive 85/374/EEC that created a regime of strict liability for defective products. As a consumer protection regulation it is particularly relevant for cases of personal injury or death; damage to property is covered only if the damaged thing is normally intended for private use or consumption and is principally used for that purpose by the injured party.
§ 823 Section 1 of the German Civil Code provides for tort liability of the producer. Liability presupposes that the producer has culpably breached a manufacturer's obligation (error in construction of manufacturing of the product, in giving instructions for the use of the products or in product monitoring).
“A manufacturer is not required to supply an accident-proof product. Rather, the standard of safety of goods imposed on the manufacturer of a product is essentially the same whether the theory of liability is labeled warranty or negligence. The product must be fit for the ordinary purposes for which it is to be used.” Jeld-Wen, Inc. v. Gamble by Gamble, 256 Va. 144, 148 (1998) (internal citations and quotations omitted). In Virginia, a plaintiff can proceed under “alternative theories of liability”: negligence and breach of warranty. See id. at 147.
Denmark has a two-branch system where liability for damage or injury caused by a defective product may be established both under the Products Liability Act and under rules developed in case law.
The Products Liability Act was introduced in 1989 and it is based on an EU product liability directive from 1985. It applies to personal injury and consumer property damage.
The product liability developed in case law is based on judgments and legal doctrines that have been developed over many years, since long before the Products Liability Act was introduced. It includes all types of damage or injury caused by a defective product (ie, personal injury, consumer property damage and commercial property damage). It is based on the general law of damages but with a stricter basis of liability.
The concept of a product that has developed in case law is broader than the concept of a product under the Products Liability Act.
The product liability rules rank equally. The claimant can choose whether to raise the claim under the Products Liability Act or under the product liability rules developed in case law. This means that the injured party can seek redress under the rules that give the most favourable result.
Product liability is regulated by the Civil Code and by the LCRP dated 7 February 1992 (LCRP). The LCRP is the main law as regards the Russian legislation on consumer rights protection. Particular issues that require detailed regulation are governed by other federal laws, binding decrees of the government and other normative acts.
The main legal bases for product liability are the Austrian
- Product Liability Act
- Product Safety Act
- General Civil Code
In addition, a defective product may also give rise to criminal or administrative criminal liability.