(p. 262) 11. Product liability
This chapter deals with damage caused by defective products and, in tort law, the topic is covered by two separate legal regimes. The first is the ordinary law of negligence (with some qualifications) and the second is the system of strict liability introduced by the Consumer Protection Act 1987, as required by a European Directive. The latter is limited to personal injuries and to some damage to private property, so there are still a number of cases where a claimant has to rely on negligence—for example, where there is damage to goods used for commercial purposes. Also, the Act applies only to certain kinds of defendants (‘producers’), and a claimant will need to use negligence if, for example, they are injured by a defectively repaired product.
One important point is that both systems apply only to damage to goods other than the defective product and not to damage which the defective product causes to itself: that is a matter solely for the law of contract. For those who need to refresh their memory on this, or those who have yet to study contract law, we have included a basic overview of the liabilities that may arise in contract in relation to defective products on our Online Resource Centre.
For more information go to the Online Resource Centre.
11.1 Liability for negligence
Donoghue v Stevenson  AC 562 not only established a general concept of duty of care in negligence (the wide rule) but also laid down the qualifications of that broad concept when applied to liability for damage caused by a defective product (the narrow rule). The relevant passages are reproduced below.
The facts are given in section 2.1. Held: a manufacturer owes a duty of care to the consumer of a product which they have produced negligently, even though there is no contractual relationship between them.
LORD ATKIN: There will no doubt arise cases where it will be difficult to determine whether the contemplated relationship is so close that the duty arises. But in the class of case now before the Court I cannot conceive any difficulty to arise. A manufacturer puts up an article of food in a container (p. 263) which he knows will be opened by the actual consumer. There can be no inspection by any purchaser and no reasonable preliminary inspection by the consumer. Negligently, in the course of preparation, he allows the contents to be mixed with poison. It is said that the law of England and Scotland is that the poisoned consumer has no remedy against the negligent manufacturer. If this were the result of the authorities, I should consider the result a grave defect in the law, and so contrary to principle that I should hesitate long before following any decision to that effect which had not the authority of this House. I would point out that, in the assumed state of the authorities, not only would the consumer have no remedy against the manufacturer, he would have none against any one else, for in the circumstances alleged there would be no evidence of negligence against any one other than the manufacturer; and, except in the case of a consumer who was also a purchaser, no contract and no warranty of fitness, and in the case of the purchase of a specific article under its patent or trade name, which might well be the case in the purchase of some articles of food or drink, no warranty protecting even the purchaser-consumer. There are other instances than of articles of food and drink where goods are sold intended to be used immediately by the consumer, such as many forms of goods sold for cleaning purposes, where the same liability must exist. The doctrine supported by the decision below would not only deny a remedy to the consumer who was injured by consuming bottled beer or chocolates poisoned by the negligence of the manufacturer, but also to the user of what should be a harmless proprietary medicine, an ointment, a soap, a cleaning fluid or cleaning powder. I confine myself to articles of common household use, where every one, including the manufacturer, knows that the articles will be used by other persons than the actual ultimate purchaser—namely, by members of his family and his servants, and in some cases his guests. I do not think so ill of our jurisprudence as to suppose that its principles are so remote from the ordinary needs of civilized society and the ordinary claims it makes upon its members as to deny a legal remedy where there is so obviously a social wrong.
It will be found, I think, on examination that there is no case in which the circumstances have been such as I have just suggested where the liability has been negatived. There are numerous cases, where the relations were much more remote, where the duty has been held not to exist. There are also dicta in such cases which go further than was necessary for the determination of the particular issues, which have caused the difficulty experienced by the Courts below. I venture to say that in the branch of the law which deals with civil wrongs, dependent in England at any rate entirely upon the application by judges of general principles also formulated by judges, it is of particular importance to guard against the danger of stating propositions of law in wider terms than is necessary, lest essential factors be omitted in the wider survey and the inherent adaptability of English law be unduly restricted. For this reason it is very necessary in considering reported cases in the law of torts that the actual decision alone should carry authority, proper weight, of course, being given to the dicta of the judges.
In my opinion several decided cases support the view that in such a case as the present the manufacturer owes a duty to the consumer to be careful . …
My Lords, if your Lordships accept the view that this pleading discloses a relevant cause of action you will be affirming the proposition that by Scots and English law alike a manufacturer of products, which he sells in such a form as to show that he intends them to reach the ultimate consumer in the form in which they left him with no reasonable possibility of intermediate examination, and with the knowledge that the absence of reasonable care in the preparation or putting up of the products will result in an injury to the consumer’s life or property, owes a duty to the consumer to take that reasonable care.
LORD MACMILLAN: … The question is: Does he owe a duty to take care, and to whom does he owe that duty? Now I have no hesitation in affirming that a person who for gain engages in the business of manufacturing articles of food and drink intended for consumption by members of the public in the form in which he issues them is under a duty to take care in the manufacture of these articles. That duty, in my opinion, he owes to those whom he intends to consume his products. He manufactures his commodities for human consumption; he intends and contemplates that they shall be consumed. By reason of that very fact he places himself in a relationship with all the potential consumers of his commodities, and that relationship which he assumes and desires for his own ends imposes upon him a duty to take care to avoid injuring them. He owes them a duty not to convert by his own carelessness an article which he issues to them as wholesome and innocent into an article which is dangerous to life and health. It is sometimes said that liability can only arise where a reasonable man would have foreseen and could have avoided the consequences of his act or omission. In the present case the respondent, when he manufactured his ginger-beer, had directly in contemplation that it would be consumed by members of the public. Can it be said that he could not be expected as a reasonable man to foresee that if he conducted his process of manufacture carelessly he might injure those whom he expected and desired to consume his ginger-beer? The possibility of injury so arising seems to me in no sense so remote as to excuse him from foreseeing it. Suppose that a baker, through carelessness, allows a large quantity of arsenic to be mixed with a batch of his bread, with the result that those who subsequently eat it are poisoned, could he be heard to say that he owed no duty to the consumers of his bread to take care that it was free from poison, and that, as he did not know that any poison had got into it, his only liability was for breach of warranty under his contract of sale to those who actually bought the poisoned bread from him? Observe that I have said ‘through carelessness,’ and thus excluded the case of a pure accident such as may happen where every care is taken. I cannot believe, and I do not believe, that neither in the law of England nor in the law of Scotland is there redress for such a case … It must always be a question of circumstances whether the carelessness amounts to negligence, and whether the injury is not too remote from the carelessness. I can readily conceive that where a manufacturer has parted with his product and it has passed into other hands it may well be exposed to vicissitudes which may render it defective or noxious, for which the manufacturer could not in any view be held to be to blame. It may be a good general rule to regard responsibility as ceasing when control ceases. So, also, where between the manufacturer and the user there is interposed a party who has the means and opportunity of examining the manufacturer’s product before he re-issues it to the actual user. But where, as in the present case, the article of consumption is so prepared as to be intended to reach the consumer in the condition in which it leaves the manufacturer, and the manufacturer takes steps to ensure this by sealing or otherwise closing the container so that the contents cannot be tampered with, I regard his control as remaining effective until the article reaches the consumer and the container is opened by him. The intervention of any exterior agency is intended to be excluded, and was in fact in the present case excluded.
1. The above principle was applied in Grant v Australian Knitting Mills Ltd  AC 85, where the claimant contracted dermatitis from wearing woollen underpants manufactured by the defendants, which contained an excess of sulphites. It was pointed out that the use of the word ‘control’ by Lord Macmillan was misleading (‘I regard his control as remaining effective until the article reaches the consumer’). According to the Privy Council, all that was meant was that ‘the (p. 265) consumer must use the article exactly as it left the maker, that is in all material features, and use it as it was intended to be used’ (Lord Wright at p 104).
In Grant, the harm could have been avoided if the underpants had been washed before use, but Lord Wright forthrightly pointed out that ‘it was not contemplated that they should first be washed’ (at p 105). What if the packet said ‘Warning: wash before use’? Then, if the claimant had not done so, would that have been a complete defence to the manufacturer, or contributory negligence on the claimant’s part? What if it were shown that no one takes any notice of such ultra-cautious notices, thinking they are only designed to remove the manufacturer’s responsibility for producing safe goods?
2. The principle has been extended to repairers of goods (Haseldine v Daw  2 KB 343), and also to distributors where they might be expected to test a product before passing it on. Thus, in Watson v Buckley, Osborne Garrett & Co and Wyrovoys Products  1 All ER 174 the claimant’s hair was dyed by Buckley with dye that she obtained from the distributors, Osborne Garrett & Co, who had bought it from Wyrovoys Products. The dye was packaged by Osborne Garrett. Stable J held Buckley liable in contract and Osborne Garrett in tort (Wyrovoys Products had ceased to exist). Liability was based on the fact that by packaging the dye the defendants had entered a relationship with the ultimate consumer. However, the principle is not limited to situations where the defendant packages the goods as their own, for it will extend to cases where the goods remain in the same form, but where it is expected that the distributor or retailer will have tested them. Thus, in Andrews v Hopkinson  1 QB 229 it was held that a commercial seller of a second-hand car was liable in negligence for not testing the car for safety before selling it.
3. A defendant is liable only if the defective product damages property other than itself. The problem is, what is ‘other property’? In Aswan Engineering v Lupdine Ltd  1 WLR 1, the claimants bought a quantity of waterproofing compound from the first defendants, Lupdine Ltd. The compound was packed in buckets which had been manufactured by the second defendants. The compound was exported to Kuwait where the buckets were stacked five high on the quayside in full sunshine, subsequently collapsing in the heat. The whole consignment was lost. It was held that there was no liability on the sellers in contract as the buckets were of satisfactory quality, and no liability in tort because the type of damage was unforeseeable. One issue was whether the product had merely damaged itself, or whether the buckets (assuming they were defective, which they were not) had damaged ‘other property’ (the compound) of the claimants. It was thought, obiter, by Lloyd LJ that the contents of the buckets were ‘other property’.
A similar problem arises under section 5(2) of the Consumer Protection Act 1987 (section 11.2), which says that there is no liability under the Act for damage to the product itself or to the whole or any part of any product which has been supplied with the product in question comprised in it.
4. Another problem arises in respect of defects that occur in the design (rather than manufacturing) process of goods. Design defects potentially affect consumers on a much larger scale, are more difficult to discover and the link from design defect to harm (causation) is often harder to establish. It is here that we see the limitations of the tort of negligence’s protection of people from harms caused by defective products, though some of these limits may be ameliorated by the introduction of a strict liability regime, as the next section discusses.
11.2 Strict liability
Strict liability for products—liability without the need to establish fault—has long been accepted in the United States (see Restatement (Second) of Torts, s 402A), and there were numerous recommendations over time, both in Britain and in Europe, for its adoption. Eventually, in 1985, a European Directive (85/374/EEC) was issued on liability for defective products. As a result of the mandatory nature of the Directive, strict liability was finally adopted in the UK by Part 1 of the Consumer Protection Act 1987.
You may find it helpful to look at the annotated version of the Act or the ‘at a glance’ table which can be downloaded from the Online Resource Centre.
Part I Product Liability
1. Purpose and construction of Part I
(1) This Part shall have effect for the purpose of making such provision as is necessary in order to comply with the product liability Directive and shall be construed accordingly.
(2) In this Part, except in so far as the context otherwise requires—
‘dependant’ and ‘relative’ have the same meaning as they have in, respectively, the Fatal Accidents Act 1976 and the Damages (Scotland) Act 2011;
‘producer’, in relation to a product, means—
(a) the person who manufactured it;
(b) in the case of a substance which has not been manufactured but has been won or abstracted, the person who won or abstracted it;
(c) in the case of a product which has not been manufactured, won or abstracted but essential characteristics of which are attributable to an industrial or other process having been carried out (for example, in relation to agricultural produce), the person who carried out that process;
‘product’ means any goods or electricity and (subject to subsection (3) below) includes a product which is comprised in another product, whether by virtue of being a component part or raw material or otherwise; and ‘the product liability Directive’ means the Directive of the Council of the European Communities, dated 25th July 1985, (No 85/374/EEC) on the approximation of the laws, regulations and administrative provisions of the member States concerning liability for defective products.
(3) For the purposes of this Part a person who supplies any product in which products are comprised, whether by virtue of being component parts or raw materials or otherwise, shall not be treated by reason only of his supply of that product as supplying any of the products so comprised.
2. Liability for defective products
(1) Subject to the following provisions of this Part, where any damage is caused wholly or partly by a defect in a product, every person to whom subsection (2) below applies shall be liable for the damage.
(2) This subsection applies to—
(a) the producer of the product;
(b) any person who, by putting his name on the product or using a trade mark or other distinguishing mark in relation to the product, has held himself out to be the producer of the product;
(c) any person who has imported the product into a member State from a place outside the member States in order, in the course of any business of his, to supply it to another.
(3) Subject as aforesaid, where any damage is caused wholly or partly by a defect in a product, any person who supplied the product (whether to the person who suffered the damage, to the producer of any product in which the product in question is comprised or to any other person) shall be liable for the damage if—
(a) the person who suffered the damage requests the supplier to identify one or more of the persons (whether still in existence or not) to whom subsection (2) above applies in relation to the product;
(p. 267) (b) that request is made within a reasonable period after the damage occurs and at a time when it is not reasonably practicable for the person making the request to identify all those persons; and
(c) the supplier fails, within a reasonable period after receiving the request, either to comply with the request or to identify the person who supplied the product to him.
(5) Where two or more persons are liable by virtue of this Part for the same damage, their liability shall be joint and several.
(6) This section shall be without prejudice to any liability arising otherwise than by virtue of this Part.
3. Meaning of ‘defect’
(1) Subject to the following provisions of this section, there is a defect in a product for the purposes of this Part if the safety of the product is not such as persons generally are entitled to expect; and for those purposes ‘safety’, in relation to a product, shall include safety with respect to products comprised in that product and safety in the context of risks of damage to property, as well as in the context of risks of death or personal injury.
(2) In determining for the purposes of subsection (1) above what persons generally are entitled to expect in relation to a product all the circumstances shall be taken into account, including—
(a) the manner in which, and purposes for which, the product has been marketed, its get-up, the use of any mark in relation to the product and any instructions for, or warnings with respect to, doing or refraining from doing anything with or in relation to the product;
(b) what might reasonably be expected to be done with or in relation to the product; and
(c) the time when the product was supplied by its producer to another;
and nothing in this section shall require a defect to be inferred from the fact alone that the safety of a product which is supplied after that time is greater than the safety of the product in question.
(1) In any civil proceedings by virtue of this Part against any person (‘the person proceeded against’) in respect of a defect in a product it shall be a defence for him to show—
(a) that the defect is attributable to compliance with any requirement imposed by or under any enactment or with any Community obligation; or
(b) that the person proceeded against did not at any time supply the product to another; or
(c) that the following conditions are satisfied, that is to say—
(i) that the only supply of the product to another by the person proceeded against was otherwise than in the course of a business of that person’s; and
(ii) that section 2(2) above does not apply to that person or applies to him by virtue only of things done otherwise than with a view to profit; or
(d) that the defect did not exist in the product at the relevant time; or
(e) that the state of scientific and technical knowledge at the relevant time was not such that a producer of products of the same description as the product in question might be expected to have discovered the defect if it had existed in his products while they were under his control; or
(f) that the defect—
(i) constituted a defect in a product (‘the subsequent product’) in which the product in question had been comprised; and
(p. 268) (ii) was wholly attributable to the design of the subsequent product or to compliance by the producer of the product in question with instructions given by the producer of the subsequent product.
(2) In this section ‘the relevant time’, in relation to electricity, means the time at which it was generated, being a time before it was transmitted or distributed, and in relation to any other product, means—
(a) if the person proceeded against is a person to whom subsection (2) of section 2 above applies in relation to the product, the time when he supplied the product to another;
(b) if that subsection does not apply to that person in relation to the product, the time when the product was last supplied by a person to whom that subsection does apply in relation to the product.
5. Damage giving rise to liability
(1) Subject to the following provisions of this section, in this Part ‘damage’ means death or personal injury or any loss of or damage to any property (including land).
(2) A person shall not be liable under section 2 above in respect of any defect in a product for the loss of or any damage to the product itself or for the loss of or any damage to the whole or any part of any product which has been supplied with the product in question comprised in it.
(3) A person shall not be liable under section 2 above for any loss of or damage to any property which, at the time it is lost or damaged, is not—
(a) of a description of property ordinarily intended for private use, occupation or consumption; and
(b) intended by the person suffering the loss or damage mainly for his own private use, occupation or consumption.
(4) No damages shall be awarded to any person by virtue of this Part in respect of any loss of or damage to any property if the amount which would fall to be so awarded to that person, apart from this subsection and any liability for interest, does not exceed £275.
(5) In determining for the purposes of this Part who has suffered any loss of or damage to property and when any such loss or damage occurred, the loss or damage shall be regarded as having occurred at the earliest time at which a person with an interest in the property had knowledge of the material facts about the loss or damage.
(6) For the purposes of subsection (5) above the material facts about any loss of or damage to any property are such facts about the loss or damage as would lead a reasonable person with an interest in the property to consider the loss or damage sufficiently serious to justify his instituting proceedings for damages against a defendant who did not dispute liability and was able to satisfy a judgment.
(7) For the purposes of subsection (5) above a person’s knowledge includes knowledge which he might reasonably have been expected to acquire—
(a) from facts observable or ascertainable by him; or
(b) from facts ascertainable by him with the help of appropriate expert advice which it is reasonable for him to seek;
but a person shall not be taken by virtue of this subsection to have knowledge of a fact ascertainable by him only with the help of expert advice unless he has failed to take all reasonable steps to obtain (and, where appropriate, to act on) that advice.
(8) Subsections (5) to (7) above shall not extend to Scotland.
(p. 269) 6. Application of certain enactments etc.
(1) Any damage for which a person is liable under section 2 above shall be deemed to have been caused—
(a) for the purposes of the Fatal Accidents Act 1976, by that person’s wrongful act, neglect or default;
(b) for the purposes of section 3 of the Law Reform (Miscellaneous Provisions) (Scotland) Act 1940 (contribution among joint wrongdoers), by that person’s wrongful act or negligent act or omission;
(c) for the purposes of section 3 to 6 of the Damages (Scotland) Act 2011 (rights of relatives of a deceased), by that person’s act or omission; and
(d) for the purposes of Part II of the Administration of Justice Act 1982 (damages for personal injuries, etc.—Scotland), by an act or omission giving rise to liability in that person to pay damages.
(a) a person’s death is caused wholly or partly by a defect in a product, or a person dies after suffering damage which has been so caused;
(b) a request such as mentioned in paragraph (a) of subsection (3) of section 2 above is made to a supplier of the product by that person’s personal representatives or, in the case of a person whose death is caused wholly or partly by the defect, by any dependent or relative of that person; and
this Part shall have effect for the purposes of the Law Reform (Miscellaneous Provisions) Act 1934, the Fatal Accidents Act 1976 and the Damages (Scotland) Act 2011 as if liability of the supplier to that person under that subsection did not depend on that person having requested the supplier to identify certain persons or on the said conditions having been satisfied in relation to a request made by that person.
(3) Section 1 of the Congenital Disabilities (Civil Liability) Act 1976 shall have effect for the purposes of this Part as if—
(a) a person were answerable to a child in respect of an occurrence caused wholly or partly by a defect in a product if he is or has been liable under section 2 above in respect of any effect of the occurrence on a parent of the child, or would be so liable if the occurrence caused a parent of the child to suffer damage;
(c) subsection (6) of the said section 1 (exclusion of liability) were omitted.
(4) Where any damage is caused partly by a defect in a product and partly by the fault of the person suffering the damage, the Law Reform (Contributory Negligence) Act 1945 and section 5 of the Fatal Accidents Act 1976 (contributory negligence) shall have effect as if the defect were the fault of every person liable by virtue of this Part for the damage caused by the defect.
(5) In subsection (4) above ‘fault’ has the same meaning as in the said Act of 1945.
(7) It is hereby declared that liability by virtue of this Part is to be treated as liability in tort for the purposes of any enactment conferring jurisdiction on any court with respect to any matter.
(8) Nothing in this Part shall prejudice the operation of section 12 of the Nuclear Installations Act 1965 (rights to compensation for certain breaches of duties confined to rights under that Act).
(p. 270) 7. Prohibition on exclusions from liability
The liability of a person by virtue of this Part to a person who has suffered damage caused wholly or partly by a defect in a product, or to a dependant or relative of such a person, shall not be limited or excluded by any contract term, by any notice or by any other provision.
(1) In this Act, except in so far as the context otherwise requires—
‘aircraft’ includes gliders, balloons and hovercraft;
‘business’ includes a trade or profession and the activities of a professional or trade association or of a local authority or other public authority;
‘goods’ includes substances, growing crops and things comprised in land by virtue of being attached to it and any ship, aircraft or vehicle;
‘personal injury’ includes any disease and any other impairment of a person’s physical or mental condition;
‘ship’ includes any boat and any other description of vessel used in navigation;
‘substance’ means any natural or artificial substance, whether in solid, liquid or gaseous form or in the form of a vapour, and includes substances that are comprised in or mixed with other goods.
46. Meaning of ‘supply’
(1) Subject to the following provisions of this section, references in this Act to supplying goods shall be construed as references to doing any of the following, whether as principal or agent, that is to say—
(a) selling, hiring out or lending the goods;
(b) entering into a hire-purchase agreement to furnish the goods;
(c) the performance of any contract for work and materials to furnish the goods;
(d) providing the goods in exchange for any consideration (including trading stamps) other than money;
(e) providing the goods in or in connection with the performance of any statutory function; or
(f) giving the goods as a prize or otherwise making a gift of the goods; and, in relation to gas or water, those references shall be construed as including references to providing the service by which the gas or water is made available for use.
(2) For the purposes of any reference in this Act to supplying goods, where a person (‘the ostensible supplier’) supplies to another person (‘the customer’) under a hire-purchase agreement, conditional sale agreement or credit-sale agreement or under an agreement for the hiring of goods (other than a hire-purchase agreement) and the ostensible supplier—
(a) carries on the business of financing the provision of goods for others by means of such agreements; and
(b) in the course of that business acquired his interest in the goods supplied to the customer as a means of financing the provision of them for the customer by a further person (‘the effective supplier’),
the effective supplier and not the ostensible supplier shall be treated as supplying the goods to the customer.
(3) Subject to subsection (4) below, the performance of any contract by the erection of any building or structure on any land or by the carrying out of any other building works shall be treated for the (p. 271) purposes of this Act as a supply of goods in so far as, but only in so far as, it involves the provision of any goods to any person by means of their incorporation into the building, structure or works.
(4) Except for the purposes of, and in relation to, notices to warn or any provision made by or under Part III of this Act, references in this Act to supplying goods shall not include references to supplying goods comprised in land where the supply is effected by the creation or disposal of an interest in the land.
Limitation Act 1980
11A. Actions in respect of defective products
(1) This section shall apply to an action for damages by virtue of any provision of Part I of the Consumer Protection Act 1987.
(2) None of the time limits given in the preceding provisions of this Act shall apply to an action to which this section applies.
(3) An action to which this section applies shall not be brought after the expiration of the period of ten years from the relevant time, within the meaning of section 4 of the said Act of 1987; and this subsection shall operate to extinguish a right of action and shall do so whether or not that right of action had accrued, or time under the following provisions of this Act had begun to run, at the end of the said period of ten years.
(4) Subject to subsection (5) below, an action to which this section applies in which the damages claimed by the plaintiff consist of or include damages in respect of personal injuries to the plaintiff or any other person or loss of or damage to any property, shall not be brought after the expiration of the period of three years from whichever is the later of—
(a) the date on which the cause of action accrued; and
(b) the date of knowledge of the injured person or, in the case of loss of or damage to property, the date of knowledge of the plaintiff or (if earlier) of any person in whom his cause of action was previously vested.
1. In relation to section 4(1)(e) of the Consumer Protection Act, the so-called ‘developments risk defence’, the European Commission instituted an action against the UK on the ground that this section did not comply with Article 7(e) of the Directive (Commission of the European Communities v UK  All ER (EC) 481) but this was rejected (see the following extract). In addition, the question whether any country should be allowed to use this defence is currently being considered by the EU.
2. It is uncertain whether computer software is ‘goods’ for the purposes of the Act. (Note, however, that the Directive speaks of ‘movables’, which may be wider than ‘goods’, and the European Commission is clearly of the view that the Directive applies to software.) If defective software is incorporated into a machine it should be possible to regard the whole machine as defective. This at least will protect anyone injured by the machine and will leave the software manufacturer and the machine assembler to sort out liability between themselves on a contractual basis. For the purposes of the Sale of Goods Act 1979, software by itself is not goods but a disk containing it is (St Albans DC v ICL  4 All ER 481). If the same applied to the Consumer Protection Act 1987, it would mean that if you download software from the Internet there would be no liability on the producer, but if you pick up a free software disk there would be. As software will normally be on something, that something will be goods, and so the problem will arise only where software is downloaded. In this situation the Directive probably does apply, but note that economic loss is not covered; neither is damage to things used by a business.
The European Commission alleged that section 4(1)(e) of the 1987 Act (the ‘development risks defence’) was not in compliance with the requirements of Article 7(e) of the Directive. Article 7(e) had stated that: ‘The producer shall not be liable … if he proves … that the state of scientific and technical knowledge at the time when he put the product into circulation was not such as to enable the existence of the defect to be discovered … ’
JUDGMENT OF THE COURT: In its application, the Commission argues that the United Kingdom legislature has broadened the defence under Article 7(e) of the Directive to a considerable degree and converted the strict liability imposed by Article 1 of the Directive into mere liability for negligence. In order to determine whether the national implementing provision at issue is clearly contrary to Article 7(e) as the Commission argues, the scope of the Community provision which it purports to implement must first be considered.
Several observations can be made as to the wording of Article 7(e) of the Directive. First, that provision refers to ‘scientific and technical knowledge at the time when [the producer] put the product into circulation’; Article 7(e) is not specifically directed at the practices and safety standards in use in the industrial sector in which the producer is operating, but, unreservedly, at the state of scientific and technical knowledge, including the most advanced level of such knowledge, at the time when the product in question was put into circulation.
Second, the clause providing for the defence in question does not contemplate the state of knowledge of which the producer in question actually or subjectively was or could have been apprised, but the objective state of scientific and technical knowledge of which the producer is presumed to have been informed. However, it is implicit in the wording of Article 7(e) that the relevant scientific and technical knowledge must have been accessible at the time when the product in question was put into circulation.
It follows that, in order to have a defence under Article 7(e) of the Directive, the producer of a defective product must prove that the objective state of scientific and technical knowledge, including the most advanced level of such knowledge, at the time when the product in question was put into circulation ‘was not such as to enable the existence of the defect to be discovered’. Further, in order for the relevant scientific and technical knowledge to be successfully pleaded as against the producer, that knowledge must have been accessible at the time when the product in question was put into circulation. On this last point, Article 7(e) of the Directive, contrary to what the Commission seems to consider, raises difficulties of interpretation which, in the event of litigation, the national courts will have to resolve, having recourse, if necessary, to Article 177 of the EC Treaty.
For the present, it is the heads of claim raised by the Commission in support of its application that have to be considered. The Commission takes the view that inasmuch as section 4(1)(e) of the Act refers to what may be expected of a producer of products of the same description as the product in question, its wording clearly conflicts with Article 7(e) of the Directive in that it permits account to be taken of the subjective knowledge of a producer taking reasonable care, having regard to the standard precautions taken in the industrial sector in question.
That argument must be rejected in so far as it selectively stresses particular terms used in section 4(1)(e) without demonstrating that the general legal context of the provision at issue fails effectively to secure full application of the Directive. Taking that context into account, the Commission has failed to make out its claim that the result intended by Article 7(e) of the Directive would clearly not be achieved in the domestic legal order.
(p. 273) The Court has consistently held that the scope of national laws, regulations or administrative provisions must be assessed in the light of the interpretation given to them by national courts. Yet in this case the Commission has not referred in support of its application to any national judicial decision which, in its view, interprets the domestic provision at issue inconsistently with the Directive.
There is nothing in the material produced to the Court to suggest that the courts in the United Kingdom, if called upon to interpret section 4(1)(e), would not do so in the light of the wording and the purpose of the Directive so as to achieve the result which it has in view and thereby comply with the third paragraph of Article 189 of the Treaty. Moreover, section 1(1) of the Act expressly imposes such an obligation on the national courts.
1. The point here is that the test is objective and that knowledge includes knowledge even at an advanced level. However, the Court also notes that the knowledge must be accessible, and presumably one way of establishing this is to show that other producers were or ought to have been aware of the knowledge. But that would not be the only way of showing that the knowledge was accessible. Following EC v UK, section 4(1)(e) of the Act should be interpreted as meaning that the defence will apply only when the knowledge of the potential defect was not accessible and one way of showing that is to show that other producers would not be expected to have known of the problem, but the defendant may also need to show that there was no other way that the knowledge could be regarded as accessible.
The claimants contracted Hepatitis C by transfusions of blood taken from infected donors. The claim was made under the Consumer Protection Act 1987 (it was conceded that blood was a ‘product’ and that its preparation involved an ‘industrial process’). At the relevant time the risk of infection was known but it was not possible to test for the presence of the Hepatitis C virus in the blood of donors, and thus the risk of infection could not be avoided. Accordingly, one issue was whether ‘unavoidability’ was a relevant circumstance in determining whether a product was defective. Another issue was whether an unavoidable but known risk qualified for the ‘development risks defence’ (Consumer Protection Act, s 4(1)(e)); that is, that the state of scientific knowledge at the time was not such as to enable the existence of the defect to be discovered. Held: the defendants were liable and could not rely on the defence. (Note: because the Act implements the European Directive, the judgment generally refers to the terms of the Directive, hence ‘Article 6’ (which corresponds with section 3 of the Act, extracted earlier) and ‘Article 7(e)’ as outlining the defence in question (s 4(1)(e) of the Act.)
32. Having set out what is common ground, I now summarise briefly the difference between the two parties, some of which is already apparent from my setting in context of the factual common ground:
(i) As to Article 6, the Claimants assert that, with the need for proof of negligence eliminated, consideration of the conduct of the producer, or of a reasonable or legitimately expectable producer, is inadmissible or irrelevant. Therefore questions of avoidability cannot and do not arise: what the (p. 274) Defendants could or should have done differently: whether there were any steps or precautions reasonably available: whether it was impossible to take any steps by way of prevention or avoidance, or impracticable or economically unreasonable. Such are not ‘circumstances’ falling to be considered within Article 6. Insofar as the risk was known to blood producers and the medical profession, it was not known to the public at large (save for those few patients who might ask their doctor, or read the occasional article about blood in a newspaper) and no risk that any percentage of transfused blood would be infected was accepted by them.
(ii) The Defendants assert that the risk was known to those who mattered, namely the medical profession, through whom blood was supplied. Avoiding the risk was impossible and unattainable, and it is not and cannot be legitimate to expect the unattainable. Avoidability or unavoidability is a circumstance to be taken into account within Article 6. The public did not and/or was not entitled to expect 100% clean blood. The most they could legitimately expect was that all legitimately expectable (reasonably available) precautions—or in this case tests—had been taken or carried out …
(iii) The Claimants respond that Article 7(e) does not apply to risks which are known before the supply of the product, whether or not the defect can be identified in the particular product; and there are a number of other issues between the parties in respect of Article 7(e) to which I shall return later. …
35. The dispute therefore is as to what further, if anything, falls to be considered within ‘all circumstances’. There is no dispute between the parties, as set out in paragraph 31(i) and (ii) above, that consideration of the fault of the producer is excluded; but does consideration of ‘all circumstances’ include consideration of the conduct to be expected from the producer, the level of safety to be expected from a producer of that product? The parties agree that the starting point is the particular product with the harmful characteristic, and if its inherent nature and intended use (eg, poison) are dangerous, then there may not need to be any further consideration, provided that the injury resulted from that known danger. However, if the product was not intended to be dangerous, that is the harmful characteristic was not intended, by virtue of the intended use of the product, then there must be consideration of whether it was safe and the level of safety to be legitimately expected. At this stage, the Defendants assert that part of the investigation consists of what steps could have been taken by a producer to avoid that harmful characteristic. The Defendants assert that conduct is to be considered not by reference to identifying the individual producer’s negligence, but by identifying and specifying the safety precautions that the public would or could reasonably expect from a producer of the product. The exercise is referred to as a balancing act; the more difficult it is to make safe, and the more beneficial the product, the less is expected and vice versa, an issue being whether a producer has complied with the safety precautions reasonably to be expected . …
36. In any event, however, the Claimants make a separate case in relation to the blood products here in issue: namely that they are what is called in the United States ‘rogue products’ or ‘lemons’, and in Germany ‘Ausreisser’—‘escapees’ or ‘off the road’ products. These are products which are isolated or rare specimens which are different from the other products of a similar series, different from the products as intended or desired by the producer. In the course of Mr Forrester QC’s [counsel for the claimant] submissions, other more attractive or suitable descriptions were canvassed, and I have firmly settled on what I clearly prefer, namely the ‘non-standard’ product. Thus a standard product is one which is and performs as the producer intends. A non-standard product is one which is different, obviously because it is deficient or inferior in terms of safety, (p. 275) from the standard product; and where it is the harmful characteristic or characteristics present in the non-standard product, but not in the standard product, which has or have caused the material injury or damage. Some Community jurisdictions in implementing the Directive have specifically provided that there will be liability for ‘non-standard’ products, ie, that such will automatically be defective within Article 6: Italy and Spain have done so by express legislation, and Dr Weber, in Produkthaftung im Belgischen Recht 1988 at 219–20, considers that that is now the position in Belgium also as a result of the implementation of the Directive. …
38. In a jurisdiction where, unlike Spain and Italy, and perhaps Belgium, no legislative distinction has been drawn between standard and non-standard products, the distinction, even if I were to conclude that the blood bags in this case are non-standard products, would not be absolute. Non-standard products would not be automatically defective. A product may be unsafe because it differs from the standard product, or because the standard product itself is unsafe, or at risk of being unsafe. It may however be easier to prove defectiveness if the product differs from the standard product. …
47. I repeat, for the sake of convenience at this stage, Article 7(e):
The producer shall not be liable as a result of this Directive if he proves … that the state of scientific and technical knowledge at the time when he put the product into circulation was not such as to enable the existence of the defect to be discovered.
The Issues Between the Parties
50. Must the producer prove that the defect had not been and could not be discovered in the product in question, as the Defendants contend, or must the producer prove that the defect had not been and could not be discovered generally, ie, in the population of products? If it be the latter, it is common ground here that the existence of the defect in blood generally, ie, of the infection of blood in some cases by hepatitis virus notwithstanding screening, was known, and indeed known to the Defendants. The question is thus whether, in order to take advantage of the escape clause, the producer must show that no objectively assessable scientific or technical information existed anywhere in the world which had identified, and thus put producers potentially on notice of, the problem; or whether it is enough for the producer to show that, although the existence of the defect in such product was or should have been known, there was no objectively accessible information available anywhere in the world which would have enabled a producer to discover the existence of that known defect in the particular product in question …
Conclusions on Article 6
55. I do not consider it to be arguable that the consumer had an actual expectation that blood being supplied to him was not 100% clean, nor do I conclude that he had knowledge that it was, or was likely to be, infected with Hepatitis C. It is not seriously argued by the Defendants, notwithstanding some few newspaper cuttings which were referred to, that there was any public understanding or acceptance of the infection of transfused blood by Hepatitis C. Doctors and surgeons knew, but did not tell their patients unless asked, and were very rarely asked. It was certainly, in my judgment, not known and accepted by society that there was such a risk …
56. I do not consider that the legitimate expectation of the public at large is that legitimately expectable tests will have been carried out or precautions adopted. Their legitimate expectation is as to the safeness of the product (or not) …
(p. 276) 57. In this context I turn to consider what is intended to be included within ‘all circumstances’ in Article 6. I am satisfied that this means all relevant circumstances. It is quite plain to me that (albeit that Professor [Jane] Stapleton has been pessimistic about its success) the Directive was intended to eliminate proof of fault or negligence. I am satisfied that this was not simply a legal consequence, but that it was also intended to make it easier for claimants to prove their case, such that not only would a consumer not have to prove that the producer did not take reasonable steps, or all reasonable steps, to comply with his duty of care, but also that the producer did not take all legitimately expectable steps either. In this regard I note paragraph 16 of the Advocate General’s Opinion in Commission v UK  All ER (EC) 481 where, in setting out the background to the Directive, he pointed out that:
63. I conclude therefore that avoidability is not one of the circumstances to be taken into account within Article 6. I am satisfied that it is not a relevant circumstance, because it is outwith the purpose of the Directive, and indeed that, had it been intended that it would be included as a derogation from, or at any rate a palliation of, its purpose, then it would certainly have been mentioned; for it would have been an important circumstance, and I am clear that, irrespective of the absence of any word such as notamment in the English language version of the Directive, it was intended that the most significant circumstances were those listed.
64. This brings me to a consideration of Article 7(e) in the context of consideration of Article 6. Article 7(e) provides a very restricted escape route, and producers are, as emphasised in Commission v UK  All ER (EC) 481 unable to take advantage of it, unless they come within its very restricted conditions, whereby a producer who has taken all possible precautions (certainly all legitimately expectable precautions, if the terms of Article 6, as construed by Mr Underhill QC [counsel for the defendants], are to be cross-referred) remains liable unless that producer can show that ‘the state of scientific and technical knowledge [anywhere and anyone’s in the world, provided reasonably accessible] was not such as to enable the existence of the defect to be discovered’. The significance seems to be as follows. Article 7(e) is the escape route (if available at all) for the producer who has done all he could reasonably be expected to do (and more); and yet that route is emphatically very restricted, because of the purpose and effect of the Directive (see particularly paragraphs 26, 36 and 38 of the European Court’s judgment). This must suggest a similarly restricted view of Article 6, indeed one that is even more restricted, given the availability of the (restricted) Article 7(e) escape route. If that were not the case, then if the Article 7(e) defence were excluded, an option permitted (and indeed taken up, in the case of Luxembourg and Finland) for those Member States who wish to delete this ‘exonerating circumstance’ as ‘unduly restricting the protection of the consumer’ (Recital 16 and Article 15), then, on the Defendants’ case, an even less restrictive ‘exonerating circumstance’, and one available even in the case of risks known to the producer, would remain in Article 6; and indeed one where the onus does not even rest on the Defendant, but firmly on the Claimant.
65. Further, in my judgment, the infected bags of blood were non-standard products. I have already recorded that it does not seem to me to matter whether they would be categorised in US tort law as manufacturing or design defects. They were in any event different from the norm which the producer intended for use by the public …
(p. 277) But I am satisfied, as I have stated above, that the problem was not known to the consumer. However, in any event, I do not accept that the consumer expected, or was entitled to expect, that his bag of blood was defective even if (which I have concluded was not the case) he had any knowledge of any problem. I do not consider, as Mr Forrester QC put it, that he was expecting or entitled to expect a form of Russian roulette. That would only arise if, contrary to my conclusion, the public took that as socially acceptable. For such knowledge and acceptance there would need to be at the very least publicity and probably express warnings, and even that might not, in the light of the no-waiver provision in Article 12 set out above, be sufficient. …
67. The first step must be to identify the harmful characteristic which caused the injury (Article 4). In order to establish that there is a defect in Article 6, the next step will be to conclude whether the product is standard or non-standard. This will be done (in the absence of admission by the producer) most easily by comparing the offending product with other products of the same type or series produced by that producer. If the respect in which it differs from the series includes the harmful characteristic, then it is, for the purpose of Article 6, non-standard. If it does not differ, or if the respect in which it differs does not include the harmful characteristic, but all the other products, albeit different, share the harmful characteristic, then it is to be treated as a standard product.
68. The circumstances specified in Article 6 may obviously be relevant—the product may be a second—as well as the circumstances of the supply. But it seems to me that the primary issue in relation to a non-standard product may be whether the public at large accepted the non-standard nature of the product—ie, they accept that a proportion of the products is defective (as I have concluded they do not in this case). That, as discussed, is not of course the end of it, because the question is of legitimate expectation, and the Court may conclude that the expectation of the public is too high or too low. But manifestly questions such as warnings and presentations will be in the forefront. However I conclude that the following are not relevant:
(i) Avoidability of the harmful characteristic—ie, impossibility or unavoidability in relation to precautionary measures.
(ii) The impracticality, cost or difficulty of taking such measures.
(iii) The benefit to society or utility of the product: (except in the context of whether—with full information and proper knowledge—the public does and ought to accept the risk). …
71. If a standard product is unsafe, it is likely to be so as a result of alleged error in design, or at any rate as a result of an allegedly flawed system. The harmful characteristic must be identified, if necessary with the assistance of experts. The question of presentation/time/circumstances of supply/social acceptability etc. will arise as above. The sole question will be safety for the foreseeable use. If there are any comparable products on the market, then it will obviously be relevant to compare the offending product with those other products, so as to identify, compare and contrast the relevant features. There will obviously need to be a full understanding of how the product works—particularly if it is a new product, such as a scrid [an imaginary product], so as to assess its safety for such use. Price is obviously a significant factor in legitimate expectation, and may well be material in the comparative process. But again it seems to me there is no room in the basket for:
(i) what the producer could have done differently:
(ii) whether the producer could or could not have done the same as the others did.
(p. 278) Conclusions on Article 7(e)
74. As to construction:
(i) I note (without resolving the question) the force of the argument that the defect in Article 7(b) falls to be construed as the defect in the particular product; but I do not consider that to be determinative of the construction of Article 7(e), and indeed I am firmly of the view that such is not the case in Article 7(e).
(ii) The analysis of Article 7(e), with the guidance of Commission v UK  All ER (EC) 481 seems to me to be entirely clear. If there is a known risk, ie, the existence of the defect is known or should have been known in the light of non-Manchurianly accessible information, then the producer continues to produce and supply at his own risk. It would, in my judgment, be inconsistent with the purpose of the Directive if a producer, in the case of a known risk, continues to supply products simply because, and despite the fact that, he is unable to identify in which if any of his products that defect will occur or recur, or, more relevantly in a case such as this, where the producer is obliged to supply, continues to supply without accepting the responsibility for any injuries resulting, by insurance or otherwise.
(iii) The existence of the defect is in my judgment clearly generic. Once the existence of the defect is known, then there is then the risk of that defect materialising in any particular product. …
76. The purpose of Article 7(e) was plainly not to discourage innovation, and to exclude development risks from the Directive, and it succeeds in its objective, subject to the very considerable restrictions that are clarified by Commission v UK: namely that the risk ceases to be a development risk and becomes a known risk not if and when the producer in question (or, as the CPA inappropriately sought to enact in Section 4(1)(e) ‘a producer of products of the same description as the product in question’) had the requisite knowledge, but if and when such knowledge were accessible anywhere in the world outside Manchuria. Hence it protects the producer in respect of the unknown (inconnu). But the consequence of acceptance of the Defendants’ submissions would be that protection would also be given in respect of the known.
77. The effect is, it seems to me … that non-standard products are incapable of coming within Article 7(e). Non-standard products may qualify once—ie, if the problem which leads to an occasional defective product is (unlike the present case) not known: this may perhaps be more unusual than in relation to a problem with a standard product, but does not seem to me to be an impossible scenario. However once the problem is known by virtue of accessible information, then the non-standard product can no longer qualify for protection under Article 7(e).
The Result in Law on Issue I
78. Unknown risks are unlikely to qualify by way of defence within Article 6. They may however qualify for Article 7(e). Known risks do not qualify within Article 7(e), even if unavoidable in the particular product. They may qualify within Article 6 if fully known and socially acceptable.
79. The blood products in this case were non-standard products, and were unsafe by virtue of the harmful characteristics which they had and which the standard products did not have.
80. They were not ipso facto defective (an expression used from time to time by the Claimants) but were defective because I am satisfied that the public at large was entitled to expect that the blood transfused to them would be free from infection. There were no warnings and no material publicity, certainly none officially initiated by or for the benefit of the Defendants, and the knowledge of the medical profession, not materially or at all shared with the consumer, is of no relevance. It is not material to consider whether any steps or any further steps could have been taken to avoid or palliate the risk that the blood would be infected.
1. This case is important not only for its interpretation of Articles 6 (‘what is a defect?’) and 7 (defences) of the Directive (Consumer Protection Act, ss 3 and 4(1)), but also because Burton J stresses the no-fault nature of product liability under the Directive/Act. The question is not whether it is unfair to impose liability on a defendant who cannot avoid the loss but, given that some losses will occur, which of the two parties should bear the cost, or perhaps which of the two should insure against the risk. The purpose of the Directive is to prefer the consumer in this situation, reflecting a more general international move towards consumer protectionism in this—as well as many others—area of law.
2. When does a risk become ‘socially acceptable’ (Burton J at )? In other words, when is it generally agreed that not every example of a product will be perfect? In Richardson v LRC Products  Lloyd’s Rep Med 280, the claimant became pregnant after her husband used one of the defendant’s condoms, which fractured during sex. The cause of the fracture was unexplained. The judge seems to have assumed that there was no defect in the condom when it left the factory, but even if there was he said it would not be defective within the Act. He pointed out that while the expectation is that the condom will not fail, no method of contraception is 100 per cent effective and there will always be inexplicable failures. Thus, he seems to have thought that so long as the testing procedures were rigorous, that was all the public was entitled to expect. In A v National Blood Authority, Burton J thought this case was unclear, but in general the question is whether the public generally accept that condoms sometimes burst. Given the warnings placed on packaging, it is likely that we should be able to assume that this is the case.
3. What is technical knowledge? In Abouzaid v Mothercare The Times, 20 February 2001, the claimant was injured in the eye by the recoil of an elastic strap on one of the defendants’ products. They relied on the Department of Trade database which did not reveal any similar accidents having happened before and said that without such information they could not have discovered the defect. The Court of Appeal thought that such accident records were probably not ‘technical knowledge’ and found the defendants liable.
4. Burton J mentions ‘Manchuria’ (at ). This relates to the accessibility of the technical knowledge—see Commission v UK, where the example of an article published only in Manchuria and written in Chinese was given. The argument is that it would be unrealistic to expect manufacturers in general to know of research which is not reasonably likely to circulate. Now that much global research is available on the Internet, this example is probably a little outdated. Burton J’s alternative analogy—unpublished research results held within a company (at )—is probably more illustrative.
5. For further reading see Christopher Newdick, ‘The Development Risks Defence of the Consumer Protection Act 1987’  CLJ 455 and more generally Jane Stapleton Product Liability (Butterworths, 1994).