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Product Liability: Questions for Discussion 2012-12-28
   2016/11/27 14:54:32

Helmut Koziol

28 December 2012

Note. The questions highlighted here should form the basis of the commentaries requested in respect of the hypothetical cases selected for analysis.


In most legal systems producers are now subject to special liability regimes which appear much stricter than the fault-based liability regime applying in general: producers are liable irrespective of fault for damage caused by defective products they put into circulation. These stricter rules on product liability originate in the USA. but the concept spread rather quickly worldwide. It inspired, for example, the European Union to design its Product Liability Directive (Council Directive 85/374/EEC of 25 July 1985), which is not only influential in the EU but has also provided the conceptual basis for new laws elsewhere.

The almost worldwide tendency to provide for strict product liability raises quite a few interesting questions, which should – as far as possible – be discussed in the analyses to be provided of the hypothetical cases and otherwise in introductions to those analyses. To some extent the questions can be subdivided into those which can be characterised as fundamental insofar as they go to the reasons for introducing strict product liability and its justification, and those focussing upon the concepts employed. I will start with the fundamental questions and then go on to the conceptual issues.


1.     Reasons for introducing strict product liability

It appears that worldwide – with the possible exception of France – there was a prevailing impression of an urgent need to provide for the stricter liability for producers who put defective products into circulation and, therefore, the American concept spread very quickly. But was there really such a need and, if so, why did it arise? What gaps existed in the reasonable protection of both buyers and third persons and what were and are the shortcomings of the general rules? For example, was the borderline between contractual and delictual liability a source of problems? Or was the regime of liability for others (agents, employees, etc) inadequate? Or was the protection of pure economic interests at stake? Or was it the opinion that the requirement of fault in establishing liability was unreasonable? Or the difficulties in proving fault?

 These questions should be discussed in the commentaries provided for Cases 1 and 2.


2.     The justification for strict product liability

The further basic question seems to be how such strict liability can be justified. The imputation of liability always needs convincing reasons and, if liability is to be independent of fault, the most widely accepted criterion, some alternative criterion must be clearly enunciated. The answer to this question is, of course, decisive in laying down the reasonable scope of product liability, in solving questions of conceptual detail and in the interpretation of legislative provisions. Last but not least: if the WTLS wants to make recommendations on the development of product liability and worldwide harmonisation, then such recommendations can only be convincing if they are based on reasonable and comprehensible arguments.  

A number of possible justifications for strict product liability may be identified and evaluated.

       (a) Control of a dangerous thing


In many legal systems keepers of dangerous things are strictly liable because they have the power to exercise influence over them. Might the same idea underlie strict product liability? Or is it an objection that the producer is no longer the keeper of a product when he or she has put it into circulation and damage occurs?

In this context, is it significant that the dangerousness of defective products is in general qualitatively different from, for example, the dangerousness of nuclear plants, railways or motor cars, to mention the most important sources of danger for which strict liability is provided under many legal systems. A product is defec-tive only if the product does not offer the safety that one is entitled to expect taking all the circumstances into account. In general, however, the danger emanating from the defect cannot be considered very great since many products, even in a defective state, are not likely to bring about exten-sive damage or to substantially increase the frequency of damage occurring. Typi-cal examples are bent paper clips or rotten food insofar as they can only result in harm-less scratches or temporary nausea respectively. In comparison, rules on strict liability which are based on dangerousness show that the high probability of causing damage and the extent of the possi-ble damage are decisive considerations. 还应突出

A more fundamental reason for doubting that the danger caused by a product defect is able to justify strict liability may also be highlighted. The general, abstract danger generated by things or facilities such as, for example, nuclear plants or motor cars, serves the interest of the keeper; dangerousness and usefulness are thus inter-related. The specific danger arising in the individual case as the result of a defect is, on the other hand, usually not beneficial in any way to the entrepreneur; on the contrary, the product’s defectiveness runs contrary to his interests. Can such concrete dangerousness nevertheless justify strict liability?

       (b) Protection against the risks inherent in industrial production


What about the justification for the European Directive provided by the legislator? The Directive very clearly states that liability without fault should apply only to movables which have been industri-ally produced. The idea that the purchaser needs special protection against the special risks of anom-alies associated with industrial mass production seems worth discussing as, in spite of all reasonable measures, product defects can never be absolutely excluded in the case of mass production nor can inspection always prevent defective products from being placed on the market. The wording of the Directive, however, relaxes the limitation to industrial products so that the liability set out also applies to handmade and artistic, custom-made items, and since 1999 also to agricultural products. Moreover, would the idea of the inevitable risks inherent in indus-trial mass production really justify liability for damage deriving from defec-tive construction or inadequate instructions for use?

(c) Enterprise liability

Can the strong trend – especially in Europe but also in the USA – towards a special, more stringent liability for entrepreneurs (’enterprise liability’) help to justify the strict liability of producers? Perhaps not, inasmuch as such liability – at least, in some conceptions – remains fault-based but with a reversed burden of proof (see eg Art 4:202 of the Principles of European Tort Law), and so would by no means be as strict as the liability on producers.

(d) A risk community

Would it be possible to call on the notion of the risk community? If the producer serves as a clearing house for all damage caused by his products, he or she can pass on all the compensation costs to the clients in general, who are the ones who derive advantages from the products. In particular, no-fault- product liability laws have the effect that the posi-tion of the entrepreneur is approximated with that of an insurer, when seen from a functional perspective: the liability risks generated are taken into account by entrepreneurs in their price calculations, so that clients may be understood as a risk community, who from an economic perspective ultimately bear the costs of the risk-related liability regime imposed on the entrepreneur. However, this idea only applies when the acquirer of the goods suffers damage, and not when the damage is suffered by a third party.

(e) Other justifications

Are there any further ideas – for example, insurability – which may be able to justify the producer’s strict liability? Can economic analysis help to provide insight into this area?

These questions should be discussed in the commentaries provided for Cases 1 and 2.


3.     Inconsistencies connected with product liability?

It may be that a convincing justification can be given for strict liability on producers, but that such justification covers only part of the scope of the liability accepted today or that it also covers some areas which are currently not under the regime of strict product liability. 但该种理由只能涵盖当今接受的责任的部分或者也涵盖现在未在严格产品责任制度之内的一些领域。

Thus it could be the case that the general justification for strict product liability is not able to cover the inclusion of innocent bystanders in the circle of protected persons. On the other hand, the justification could raise the question of why fellow-entrepreneurs are not protected to the same extent as consumers or why strict liability does not arise in cases of damage caused by defective services or why only movables are subject to strict liability and not buildings or bridges or why some legal systems have a different regime for medicines, or why immaterial loss does not have to be compensated in some countries. One can imagine that quite a number of similar questions arise, varying in the individual legal systems.

These questions could be discussed in the commentaries provided for Case 3.


4.     Conceptual issues

The rules on product liability raise many questions of detail which are important in practice. A few worth mentioning are, for example, how “defect” is defined, whether a product’s failure to provide protection against harm (as in the case of a drug or weedkiller) can be a defect, what is to be understood by the terms ‘supply’ and ‘putting into circulation’, and who is a ‘producer’? The defences available in respect of a claim also cause not insignificant difficulties.

These conceptual issues are intrinsically linked with the fundamental questions of need and justification highlighted in Sections 1 and 2 above, because the concepts employed should be adequate to meet the deficiencies that strict product liability was intended to address, and should reflect and support the justifications provided for it.

These questions should be discussed in the commentaries provided for the hypothetical cases as and where appropriate.


5.     Deficiencies of the rules in practice

What are the deficiencies of the rules on product liability in your legal system?

This question could be discussed in the commentaries provided for the hypothetical cases as and where appropriate.


6.     Further questions

Each respondent is requested to highlight further issues he or she thinks to be of relevance.

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