Out-Law Guide | 08 Mar 2018 | 10:17 am | 12 min. read
This guide was last updated in March 2018
While some product safety obligations can be limited and controlled contractually, the regulatory requirements can only be learned and managed. The price of failure in terms of recall costs, reputational damage, fines and even imprisonment mean that product quality and safety is a truly business critical issue.
In this guide, we summarise the main regulatory obligations for businesses. Please see our related guides for information on businesses' civil law duties, the work product safety regime and the food safety regime.
The General Product Safety Directive
There is now a range of EU sectoral regulation which lays down product safety and other requirements for certain products, which can include both consumer products and products for use at work. We discuss the sectoral duties below.
The General Product Safety Directive (GPSD) provides a general safety framework that must be observed in relation to consumer products which are not covered by the sectoral regulations. It was also designed to supplement and fill gaps which the sector-specific legislation did not address.
The interaction of the GPSD and the sectoral regulation has led to some confusion, and the EU has proposed simplifying and clarifying the product safety regime through a new Product Safety and Market Surveillance Package including a new Regulation on Consumer Product Safety which would replace the GPSD. The draft includes new obligations aimed at improving product identification and traceability and a greater emphasis on penalties. However, this package has been on hold since 2014 due to a disagreement over country of origin marking.
The GPSD is implemented in the UK through the 2005 General Product Safety Regulations (GPSR). Much of the approach found in the GPSR is also found in the sector-specific legislation but there are some additional requirements, specific to the economic operator, for instance with respect to the keeping of technical information for 10 years.
The General Product Safety Regulations
The GPSR provides a broad umbrella of regulation to ensure that consumer products, when marketed, are safe. It creates a series of obligations on producers and distributors to help to ensure that this goal is achieved and to reduce the risk to consumers from unsafe products. The GPSR gives wide powers to Trading Standards departments and other authorities to ensure that unsafe products do not remain on the market and, if need be, are recalled.
The GPSR creates a safety requirement for consumer products where there are no specific safety regulations covering that kind of product or where the regulations that do exist do not address particular risks. Therefore, they are an important reference point for many producers or distributors of products which are likely to end up in consumer use.
Only those products which are intended for consumers or which are likely, under reasonably foreseeable conditions, to be used by consumers even if they were not actually intended for them are within the scope of the GPSR.
The safety requirement
A 'safe' product is one which, under normal or reasonably foreseeable conditions of use, does not present any risk or only the minimum risks compatible with the product's use and which are considered to be acceptable and consistent with a high level of protection for the safety and health of persons. 'Conditions of use' in this context also covers duration of use, putting into service, installation and maintenance.
As an example, an inherently dangerous product such as a power saw designed for use at home can nonetheless be regarded as a safe product provide it presents the minimum risk compatible with a high level of protection. The producer must therefore ensure that adequate instructions are provided and that appropriate safety devices, such as guarding, are fitted.
In many cases, the fact that a product is unsafe will be obvious. However, in some cases, the mode of use which the consumer has made of the product may be highly relevant to whether the product was in fact unsafe. As with the Consumer Protection Directive and UK Consumer Protection Act, which provide a civil remedy for consumers in relation to unsafe products, the fact that there are other products capable of providing a higher degree of safety is not by itself a reason to regard a product as an unsafe product.
The regulations provide further guidance about factors to be taken into account when deciding whether a product is unsafe, including:
Where EU legislation, or UK legislation where there is no EU legislation, prescribes that a product must comply with certain requirements in order to be placed on the market, then the product will be presumed to be safe in respect of those matters. Where a product complies with a British Standard implementing a European standard, then the product will be presumed to be a safe product so far as the risks covered by that national standard are concerned.
However, if a product does not in fact comply with one or more of the relevant provisions, this will not prevent the product being an unsafe product. Nor do these presumptions prevent action by the authorities to remove unsafe products from the market.
Primary duties of producers and distributors
A 'producer' is defined as the manufacturer or brander of the product, if based in the EU. If based outside of the EU, then the manufacturer's agent or representative in the EU will be regarded as the producer. If there is no EU agent or representative, then the producer will be the first importer into the EU.
'Producer' is also used to describe any other professional in the supply chain whose ability may affect the safety of the product. So, for example, someone who stores the product, modifies the product or incorporates it into another product would be a producer for these purposes if those activities affect the product's safety.
A 'distributor' means a professional in the supply chain whose activity does not affect the safety properties of a product.
It is an offence for a producer or distributor to sell or to place on the market a product which is not safe. Likewise, it is an offence for a distributor to sell or to place on the market a product which it knows or should have presumed based on information in its possession was not a safe product.
Committing the offence exposes both the company and any director or manager who consented or connived in, or whose neglect allowed, the action or failure leading to the offence. The penalty is up to 12 months imprisonment and/or a fine of £20,000.
Where a producer or a distributor knows that a product it has placed on the market is not safe, it is obliged to notify an enforcement authority immediately of:
This notification obligation does not apply where the circumstances indicate that the defect was only affecting isolated circumstances or products.
If the risk is a serious one requiring rapid action, the notification must also include:
Failing to comply with these duties is an offence, which again exposes both the company and any director or manager who consented or connived in, or whose neglect allowed, the action or failure leading to the offence. The penalty is up to three months imprisonment and/or an unlimited fine.
Additional duties for producers
A producer is obliged to provide consumers with the relevant information allowing them to assess and take precautions against the risks inherent in a product where such risks are not immediately obvious without adequate warnings.
A producer must also adopt measures appropriate to allow it to:
Although the regulations are not completely clear on this point, they appear to require the producer to ensure that it has systems in place to enable it to take such action.
There appears to be no specific criminal penalty in the event that the producer does not in fact take steps such as issuing warnings or ordering a recall. However, a producer that did not take appropriate warning or recall action would undoubtedly increase the risk of prosecution for placing an unsafe product on the market, as well as being likely to face action from the authorities to force any preventative action which they regarded as appropriate. This is particularly likely where there is a serious risk posed by a product. In addition, if a producer was aware that a product it had placed on the market was seriously unsafe but took no action to prevent the risk, and the product subsequently led to the death of a consumer, there would be a risk of exposure for both the producer and its responsible directors to manslaughter prosecutions.
The regulations do, however, lay down certain mandatory requirements on producers designed to ensure they remain fully informed and can take suitable and appropriate risk avoidance action.. These carry criminal sanctions and include:
These final three requirements apply where, and to the extent that, it is reasonable to do so.
These obligations merely introduce into law what is in any event best practice for any product manufacturer. Ensuring strong backward traceability should allow someone examining a product in the field to know with the help of the producer which product batch or production date the product dates from. This should allow the producer to be able to isolate the batches of components, materials and production machines which were used to manufacture the product.
This information, the more detailed the better, allows the producer and others within the supply chain to keep to a minimum the volume of product which could become the subject of a recall, rectification or warning programme. This has the very real advantage of minimising the substantial costs incurred in recall or rectification, allowing them to deal only with product which is actually affected by a problem rather than having to remove from the market much larger bodies of product simply because the issue cannot be isolated more narrowly.
It is also good practice to ensure that information fed back from the field about product problems is fully investigated and conclusions drawn so that if it is necessary to take action to prevent risk this can be done at the earliest opportunity. Again, allowing a developing product defect to go on will in many cases mean that much more affected product is put into the marketplace, increasing both regulatory and financial exposures.
There is also a related obligation to inform distributors of products which do or may present a risk so that appropriate action can be taken.
Additional duties of distributors
Distributors are also obliged, within the limits of their activities, to take part in the monitoring of the safety of products which they are placing on the market by:
Failure to comply with these elements is an offence and exposes both the distributor and any director or manager who consented or connived in, or whose neglect allowed, the action or failure leading to the offence. The penalty is up to three months imprisonment and/or an unlimited fine.
Powers of the enforcement authorities
The enforcement authorities, who are typically trading standards departments, have a variety of powers to obtain information and, in particular, to issue safety notices.
A safety notice can require that a producer or distributor:
There are appeal procedures available to a party aggrieved by a safety notice. If a safety notice is served it is essential to take specialist legal advice rapidly, as failure to comply with a safety notice is itself an offence.
Corrective actions and risk assessments
A producer or distributor who is aware that a product which it has placed on the market is unsafe needs to carefully consider what the appropriate action to take should be to minimise the risk. In some cases, a warning may be sufficient, for example where the level of risk is such that it would be disproportionate to recall the product, particularly where the product's nature is such that it will be used up within a very short period of time so that it no longer poses a danger.
These are matters which require a risk assessment and can be matters of fine judgement. It needs to be borne in mind that if the enforcement authorities are not satisfied with the action which is proposed, it may take matters out of the hands of the producer/distributor and impose its decision via a safety notice.
Sectoral legislation: scope and additional duties
There is now a suite of new sector-specific directives and regulations covering many product types including toys, cosmetics, gas appliances, construction products, low voltage electrical products and medical devices. The GPSD will have limited application to consumer products covered by such legislation.
Unlike the GPSD, the sectoral legislation applies to products for use at work or in commercial premises as well as to consumer products.
Under the CPR, the obligation to place safe construction products on the market is set out more indirectly, by reference to the need for products placed on the market to comply with a declaration of performance and to be marked with a 'CE' mark. The declaration should include, amongst other things, that the product is in accordance with the relevant European standard and complies with the relevant essential characteristics which are required to ensure that the construction works comply with basic requirements such as mechanical resistance and stability, safety in case of fire, and safety and accessibility in use.
The LVD imposes safety obligations on all economic operators, including producers and distributors, to only place products on the market designed and manufactured in accordance with good engineering practice in safety matters and which do not endanger the health and safety of persons or property. It also sets out defined safety objectives, such as protecting against hazards caused by contact, temperature, arc or radiation, as well as any non-electrical dangers.
As can be seen from the above, the risks addressed by the sectoral legislation are much more specific than under the GPSD. Where the risk is addressed by the sector-specific legislation, the GPSD has no application in assessing safety.
Enforcement, withdrawal and recall obligations
The old sectoral legislation often did not include some of the enforcement provisions found under the GPSD such as the provisions on withdrawal and recall. The GPSD was used to fill that gap for consumer products.
However, the new sectoral legislation contains its own obligations to take corrective measures, including withdrawal and recall as necessary, to ensure sample testing and being informed of complaints, and to inform the relevant enforcement authorities in the event of risk. Accordingly, the GPSD requirements are replaced by these provisions.
As well as the obligations as to safety, traceability and marking of products found in the GPSD, manufacturers, importers and other economic operators have additional obligations under the sectoral legislation. These include:
All economic operators must keep their own traceability records, up and down the supply chain, for 10 years.