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Product Liability: Global Scenario of Legislations

Product Liability law provides the consumer with a legal remedy for any injuries suffered by him from a defective product. It is estimated that millions of people all around the globe are negatively affected by defective products where, the seller or manufactures end up paying large number of damages. A product is required to meet the ordinary expectations of a consumer; therefore, responsibility lies with the manufacturers and the sellers to ensure safety and quality of the product as per description. This, however, has not always been the case.

The modern markets for consumer for goods as well as services have undergone drastic transformation with the emergence of Global supply chains, International Trades and rapid development of e-commerce have not only made plethora of products and services available in the markets all over the globe but also new delivery systems, options and opportunities for Consumers.

The transition from "Caveat Emptor" to "Caveat Venditor" where the "Seller" and not the "Buyer" have to be beware about the product seems to be subjective all around the world.[1]

This research is an attempt to trace the Legislations of 'Product Liability' globally (specifically India, USA, UK and Germany) and the subject matter regarding the onus of proof.

Legislations in India
In Indian scenario, The Consumer Protection Act, 1986, the only law aimed to serve the interest of consumers, the clause of product liability was nowhere mentioned in this act. Whereas, the disputes pertaining to liability of the product was covered under the Tort Law i.e., Strict Liability and the Sales of Goods Act, 1930, the Indian Penal Code, 1860 and some specific statutes related to specific goods and of certain standardizations.

The continuing disagreements regarding the Liability of Products, and the various cases constructing the question of Law, The Indian Ministry of Consumer Affairs, Food and Public Distribution took a charge and amended the Consumer Protection Act, 1986 (Now CPA, 2019) which included a specific and detailed clause of "Product Liability" (Section 82).

CPA 2019 defines product liability as "the responsibility of a product manufacturer or product seller, of any product or service, to compensate for any harm caused to a consumer by such defective product manufactured or sold or by deficiency in services relating thereto".[2]

As mentioned in the CPA, 2019, "A product liability action may be brought by a complainant against a product manufacturer or a product service provider or a product seller, as the case may be, for any harm caused to him on account of a defective product".[3]

According to CPA, 2019, a product manufacturer can be held liable if; the product contains a manufacturing fault or defect; or the product's design is defective; or where there is deviation from manufacturing specifications; or the product's express warranty does not abide by it; or the product lacks adequate instructions of correct usage to prevent harm or improper usage.[4]

Further, product service provider can be held liable if; service provided by him was deficient or imperfect or faulty or inadequate in quality, nature or manner of performance which is required to be provided in accordance with the pertaining law or as mention explicitly is the contract or; withholding of necessary information or act of omission or negligence which caused the harm or; lack of adequate instructions which may cause harm further or; the service does not abide by the express warranty or the terms and conditions of the contract.[5]

Also, the product seller can be held liable if; he exercised a considerable control over the designing, testing, manufacturing, packaging or labelling of a product that caused the harm or; he altered or modified the product in such a manner which primarily caused the harm or; Independently made an express warranty other than of the manufacturer and failed to comply with it or; the product sold by him does not have identity of any manufacturer or if have, service of notice or warrant or process cannot be effected on him or he is not subjected to law pertaining in India or; he failed to execute reasonable care in assembling, inspecting or maintaining such product or withholding of necessary information given by manufacturer regarding the dangers and improper usage of the product which further was the proximate cause of the Harm.[6]

After conversation with some of the primary officials of CCPA and NCDRC about the No. of Cases being registered for product liability and over its pendency, they argued over a point that there are no cases registered for product liability after the amendment of consumer protection act, 1986 (Now CPA, 2019).

But the point they constantly overthrowing was that of the increase in No. of cases being registered for the matter related to E-commerce and insurance policy (aftermath of the COVID-19 outbreak).

Also, there are some exception, for which the product liability action cannot be brought against the product seller if:
  1. At the time of harm, the product was altered, modified or misused or;
  2. Product Manufactures will not be liable even after the failure to provide adequate information or warning if, it was purchased by an employer for use at the workplace and the product manufacturer made him aware of instructions and warning or, the product was sold as a component or material to be used to create finished good, and the harm was the proximate of the finished product or, the product caused harm was legally meant to be used under the supervision of an expert and the product manufacturer informed them about the warning and necessary instructions or, the user of the product was under the influence of alcohol or any prescribed drug (not by medical practitioner).

Legislations in United States of America
In USA, the consumer cause of action is based on:
  1. Negligence,
  2. Breach of Warranty and
  3. Strict Liability.
Negligence means that the manufacturer or any of them in the chain of production or manufacturing did not exercised with reasonable or due care for the safety of the design and manufacture of product, which further caused harm to consumer. What constitutes "Reasonable or due care" entirely depends upon the nature of the product and to what extent harm can be caused by the product.[7]

Warranty is an expressed or implied contract between the manufacturer or vendor to its customers concerning the fitness or durability the product. For example, When an Individual buys a washing machine and the seller provide him with a written statement of warranty, this is expressed, but if there is no such statement made rather, the seller implicitly warrants for the fitness of the product, this is implied. Hence, if the manufacturer of vendor is unable to fulfil the promise made or claim or representation, he may be liable for the damages. Warrant claims are contractual and are based upon the Article 2 of Uniform Commercial Code as adopted by each state in USA.[8]

Strict Liability makes a manufacturer or vendor responsible for all the injuries caused by the defective product that is unreasonably dangerous to him, or any other person or his or her property or body.

The burden of proof lies upon the plaintiff to prove all the elements of the case, for example, if the plaintiff suffered from a harm due to negligence of the manufacturer, he must prove that the manufacturer failed to use reasonable and due care, which further breached the duty and caused the harm.

Legislations in United Kingdom
As a common law country, the legislations in UK are somewhat similar to that of India but Indian legislations have been specified and amended. The UKs main legal basis for product liability lies in the:
  1. Consumer Protection Act, 1987,
  2. Negligence and
  3. Contract.
The EU Product Liability Directive [85/374/EEC] (PLD) was transposed into UK law by the CPA. This imposes strict liability for defective products (sometimes described as no fault liability) which have caused injury or damage to private property (excluding damage to the product itself).[9]

Further for Negligence, this is fault based. The plaintiff has to proof that the harm he or she caused resulted from the defective product and the absence of reasonable or due care.

In Contract, the claimant would need to show that the contract has been breached by the defendant for the sale of the product and have breached the express or implied term of the contract which further caused loss to the claimant.

The defences available at the part of the defendant is to prove that there was not causal link between the breach of duty and the risk of a product. Further, Contributory Negligence and Voluntary assumption of risk can also be helpful as a defence.[10]

Legislations in China
In China, the Product Quality Law is a unified statue which governs product liability claims. Article 41 of this legislation imposes Strict Liability on the producer for the defective product. This means that the product manufacturer may be held liable without any fault for the defective product, therefor following the link between the breach of duty and the harm caused.[11]

Producers can only be escape from liability under one of the following circumstances stipulated in paragraph 2, article 41 of the Product Quality Law
  • the product has not been put into circulation;
  • the defect causing the damage did not exist when the product was put into circulation; and
  • the level of science and technology at the time that the product was put into circulation was not sufficient to detect the existence of the defect.[12]
Contrarily, under Article 42 of the Product Quality Law, the seller of a defective product is falsely held accountable and proof of the seller's intent or ignorance is required in order to hold the seller culpable. Nevertheless, even though the seller's innocence can be proven, article 42 also states that the seller is responsible for paying damages if it is unable to locate the manufacturer or supplier of the defective product.

Further, all the countries mentioned above (except India) does not have a specific legislation pertaining to the liability of product. They've primarily opted for the "Strict Liability" rule (also referred to as 'no fault liability'), or "Negligence". Only India have specific clause of Product Liability, which in turn was bought up by an amendment to the Consumer Protection Act, 1986 (Now CPA, 2019).

Also, in the all the countries, the onus of proof lies on the plaintiff, where he will have to showcase all the facts of the case pertaining to defective product, but the question which arises is if the rule of "Strict Liability" is implemented, the manufacturer or seller can be falsely made liable? so it needs a viable check and balance between the breach of duty, causation and the law.

Further, in India, where there is specific legislation for liability, the question arises that whether it is successfully implemented and are reached to logical conclusions or are pending? But after interaction with the officials of Central Consumer Protection Authority (CCPA) about the cases being registered after the amendment for Product Liability, they denied that such cases had not been registered after the amendment.

So, no data was available for the same. Further, after bunch of mails and calls regarding the data related to other clauses, I got no response, and no data was available on the official website for the same, which also signifies that the CCPA is not fully functional and transparent. To conclude, an effective implementation of legislation also depends upon effective working of the institutional authorities and making public aware about the law and their rights.

  2. CPA, 2019
  3. CPA, 2019
  4. CPA, 2019
  5. CPA, 2019
  6. CPA, 2019
Also Read:
  1. Comparison: UK v/s India Product Liability Law
  2. Let the Seller be Aware: Product Liability under Consumer Protection Act, 2019

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