Out-Law Guide | 25 Aug 2011 | 11:51 am | 3 min. read
Product liability is the area of law in which manufacturers, distributors, suppliers and retailers are held responsible for any injuries products cause. Regardless of any contractual limitations of liability if a product or any of its component parts are defective its manufacturer may be liable for damage under the Consumer Protection Act (CPA) or the common law of negligence.
An action under the CPA or for negligence can be brought for death, personal injury and damage caused to private property as the result of a product defect. Neither type of action can be used to compensate for pure economic or consequential loss.
This guide considers claims for negligence against the manufacturer of a defective product. See also our Out-Law Guide to Product Liability under the Consumer Protection Act.
Liability for negligence
A claim in negligence is based on the assumption that the manufacturer owes a duty of care to all those who can reasonably be expected to make use of its product. In the case of 'dangerous' products such as those which, if defective, could cause extensive harm this duty may be owed to anybody who may reasonably be affected by a defect in the product. This means that a claim in negligence is not limited by the doctrine of privity of contract, which states that only a party to a contract can sue under it. A claim may be brought by a consumer-purchaser of the product, a person who uses the product or a third party bystander who is injured by the product.
The manufacturer's negligence may be:
Liability is not limited to the manufacturer of the product – other parties who supplied components or distributed the product may be held liable if they can be shown to have been negligent.
Limitations on negligence liability
Despite the significance of negligence liability, it is subject to a number of limitations which may restrict its effectiveness in product liability claims. The manufacturer can only be held liable where it has failed to take reasonable care, which the injured party must be able to prove. This may be difficult and expensive.
In some cases, particularly concerning manufacturing defects, the injured party may be able to rely on the principle of 'res ipsa loquitur' - meaning that no explanation other than negligence can be the case. If this applies, it is up to the manufacturer to prove that it did in fact take reasonable care. In cases like this, it may be difficult for the manufacturer to avoid liability unless it can show how the defect occurred. The manufacturer will have to show that it took reasonable care to establish a safe system of production and quality control to avoid defects, and that the employees who implemented that system took reasonable care when doing so.
Where the complaint is a result of negligent design, the injured party's position will be much weaker. Expert evidence will be necessary to establish negligence. The courts may be reluctant to impose liability for negligent design as this would involve 'second guessing' executive decisions on the relative cost and benefit of different design options.
A second difficulty faces the injured party is the need to establish a causal link between the defendant's negligence and his own loss or injury. However, he would also have to do so if his claim was under contract.
Since the action is one for common law negligence, the manufacturer will be able to rely on any of the usual defences available in tort. For example, the manufacturer may be able to rely on the partial defence of contributory negligence if the injured party ignored warnings, misused the goods or continued to use them after a danger becomes apparent.
A further restriction on negligence actions is that, although damages may be awarded for personal injuries or damage to property, damages will generally not be awarded for purely economic losses.