European Legislation on Product Liability

In South Africa we have many organizations who manufacture and export products to countries who are members of the European Union. We know that many of these products must have the CE marking applied to them as proof that the product complies with all the essential health and safety requirements for that product. (In later blogs I will give more information on exactly how this works.)

The essential health and safety requirements are contained in directives and regulations that have been issued by the European Parliament. In the case of the directives they are national requirements in the legal systems of each member state, while regulations apply in each member state without having to be published as national legislation.

In this blog I would like to provide information on the European legislation on product liability. To ensure that the information comes across as intended, I have taken the liberty to copy the appropriate section form the Blue Guide on the Implementation of EU Product Rules – 2016.

“The concept of manufacturer according to Union harmonization legislation as shaped by the New Legislative Framework is different from that under the Directive on consumer product liability 85/374/EEC. In the latter case, the concept of ‘producer’ covers more and different persons than the concept of ‘manufacturer’ under the New Legislative Framework.

Legal or administrative action may take place against any person in the supply or distribution chain who can be considered responsible for a non-compliant product. This may, in particular, be the case when the producer is established outside the Union. The Directive on product liability covers all movables and electricity, as well as raw materials and components of final products. Services as such are currently excluded from the scope. Secondly, the Directive applies only to defective products, i.e. products not providing the safety that a person is entitled to expect. The fact that a product is not fit for the use expected is not enough. The Directive only applies if a product lacks safety. The fact that a better product is made afterwards does not render older models defective.

Liability, the responsibility to pay for damages, is placed on the producer. A producer is either a manufacturer of a finished product or a component part of a finished product, producer of any raw material, or any person who presents himself as a manufacturer (for example by affixing a trademark). Importers placing products on the Union market from third countries are all considered to be producers under the Directive on product liability. If the producer cannot be identified, each supplier of the product becomes liable, unless he informs the injured person within a reasonable time of the identity of the producer, or of the person who supplied him with the product. When several persons are liable for the same damage, they are all jointly and severally liable.

The producer must compensate damages caused by the defective product to individuals (death, personal injury) and private property (goods for private use). However, the Directive does not cover any damage to property under EUR 500 for a single incident. National law may govern non-material damages (such as pain and suffering). The Directive does not cover the destruction of the defective product itself and, therefore, there is no obligation to compensate for it under the Directive on product liability. This is without prejudice to national law.

The Directive on product liability allows Member States to fix a financial ceiling for serial accidents at a minimum of EUR 70 million. However, most Member States have not used this possibility.

The producer is not automatically liable for damage caused by the product. The injured person, whether or not he is the buyer or user of the defective product, must claim his rights to obtain compensation. The victims will be paid only if
they prove that they have suffered damage, the product was defective, and this product caused the damage. If the injured person contributes to the damage, the producer's liability may be reduced or even eliminated. However, the victims do not need to prove that the producer was negligent because the Directive on product liability is based on the principle of no-fault liability. Thus, the producer will not be exonerated even if he proves he was not negligent, if an act or omission of a third person contributes to the damage caused, if he has applied standards, or if his product has been tested. The producer will not have to pay, if he proves:

·       he did not place the product on the market (for example the product was stolen),

·        the product was not defective when he placed it on the market (thus he proves that the defect was caused subsequently),

·        the product was not manufactured to be sold or distributed for economic purpose,

·        the defect was caused due to compliance with mandatory regulations issued by the public authorities (which excludes national, European and international standards),

·        the state of scientific and technical knowledge at the time when the product was put on the market could not as such enable the existence of the defect to be discovered (the development risks defense), or

·        where he is a subcontractor, that the defect was due either to the design of the finished product or to defective instructions given to him by the producer of the finished product.

10 years after the product is placed on the market, the producer ceases to be liable, unless legal action is pending. Further, the victim must file an action within 3 years of the damage, the defect and the identity of the producer being
known. No waivers of liability in relation to the injured person may be agreed.

The Directive on product liability does not require Member States to repeal any other legislation on liability. In this respect, the Directive's regime adds to the existing national rules on liability. It is up to the victim to choose the grounds
on which to file the action”

I trust that this article helps manufacturers and exporters to realize the importance of complying with all the legal requirements that apply to the specific products that they are exporting to Europe. The evolution of EU legislative techniques in this area has been progressive, tackling issues one after another, although sometimes in parallel, culminating in the adoption of the New Legislative Framework: essential or other legal requirements, product standards, standards and rules for the competence of conformity assessment bodies as well as for accreditation, standards for quality management, conformity assessment procedures, CE marking, accreditation policy, and lately market surveillance policy including the control of products from countries outside the European Union. We know that customs will in many cases check compliance before allowing products out of customs.

For more information and assistance, please feel free to contact me at koosgouws10@gmail.com.

You can also visit our website at www.sheqmanagementsystem.co.za, or alternatively, at www.she-management-systems.webnode.com

Koos