Ken Oliphant

28 December 2012

Case 1: Brake Pad Failure

X Ltd manufactures bicycles. In 2011, it started to use a new material for its brake pads, which X Ltd believed on the basis of its testing to be a cheaper, longer-lasting and generally more effective alternative to traditional materials. X Ltd was aware of a very small risk that – given a combination of particular circumstances (temperature, surface water, oil, etc) – the new brake-pad material might suddenly be rendered ineffective, but it considered that the risk was likely to eventuate only very rarely and did not outweigh the general advantages of the new material. It included a statement about the possibility of failure in the small print of the product instructions supplied with all of its bicycles incorporating the new brake pads. A, who purchased one of the bicycles, is one of a handful of people injured in accidents attributable to the failure of the new brake pads; A’s bicycle is also damaged. B, a passer-by, is injured in the same accident.

(a) Analysis

What is X Ltd’s liability to A and B? Pay particular attention to the various possible bases of liability (a general tortious liability for fault, vicarious liability, contractual liability, or a special strict liability regime?). Would it make any difference to your analysis if Y, who is (i) an employed researcher in X Ltd’s laboratory, or alternatively (ii) an independent research contractor, had covered up the risk that the new brake-pad material might fail?

(b) Commentary

What does your analysis demonstrate about the reasons for introducing strict product liability and the justifications that may be given for it? Do these justifications apply where (as in the present case) the injury is caused by a standard product and results from choices made in the design process? And where the victim is a third party rather than the purchaser? Is the resulting liability truly a strict liability or does it ultimately rest on fault?

Case 2: Infected Blood

A is infected with Hepatitis N as the result of a blood transfusion conducted in X Hospital in 2005. The source of the infection was blood supplied to X Hospital by Y Ltd, who had collected it from a donor, Z. Unknown to himself, Z was a carrier of the Hepatitis N virus. At the time, the risk of Hepatitis N in donated blood had been identified in a single published paper in a scientific journal, but only a handful of research laboratories in the world had the capacity to test for its presence in specific quantities of blood. Furthermore, the majority of the scientific community did not believe that the condition (Hepatitis N) really existed. It was only subsequently that the condition’s existence came to be generally accepted and that a test was developed that allowed hospitals and blood suppliers to screen out infected parcels of blood.

(a) Analysis

What is the liability to A of X Hospital, Y Ltd and Z? Pay particular attention to the various possible bases of liability (a general tortious liability for fault, vicarious liability, contractual liability, or a special strict liability regime?). Would it make any difference to your analysis if A contracted the virus as the result of a blood transfusion conducted in 2001, but her condition only manifested itself in 2012? (In this context, consider in particular differences in the time limits applied to the various possible bases of liability.)

(b) Commentary

What does your analysis demonstrate about the reasons for introducing strict product liability? In particular, why are ordinary principles of fault-based, vicarious and contractual liability considered insufficient? What does your analysis demonstrate about the justifications that may be given for strict product liability? Do these justifications apply where (as in the present case) the injury is caused by a non-standard product and results from a failure to identify a pre-existing defect in the individual product?

Case 3: Bridge Collapse

A, a pedestrian using a public right of way, is injured by the collapse of a bridge constructed by X Ltd on land belonging to Y, who commissioned the construction, on the basis of a plan drawn up by architect Z, whom Y also commissioned directly. It transpires that Z’s plan was defective and caused the collapse. Y incurs the cost of instructing a different architect to redesign the bridge. Under the terms of its initial engagement, X Ltd is obliged to construct the new bridge for no additional remuneration.

(a) Analysis

What is the liability to A of X Ltd, Y and Z? Is the architectural plan itself a ‘product’, and so subject to strict product liability, or does it merely represent the performance by Z of a service, to which some alternative liability regime applies?

What further liability, if any, does Z have to X Ltd and Y, whether on the basis of a direct claim or a recourse action?

(b) Commentary

What does your analysis demonstrate about the coherence of strict product liability as it exists in your jurisdiction, paying particular attention to the limits on its scope. Identify the various alternative types of liability that could arise (including contractual liability), and highlight the main differences between them. To what extent is liability for immovables different from liability for movables, and is this justified?  To what extent is liability for the supply of services different from liability for the supply of products, and is this justified?