Liability for Defective Products PDF

8 Liability for Defective Products LEARNING OUTCOMES When you have completed this chapter, you should be able to: explain the law of negligence in so far as it applies to a product liability claim; explain the statutory tort created by...

8 Liability for Defective Products LEARNING OUTCOMES When you have completed this chapter, you should be able to: explain the law of negligence in so far as it applies to a product liability claim; explain the statutory tort created by the CPA 1987; explain the circumstances in which a claim in contract might arise in relation to a product; analyse fact patterns and recognise potential examples of negligence, liability under the CPA 1987 and claims in contract relating to products; demonstrate a sound knowledge and understanding of the difference between the three areas of law relevant to this topic. 8.1 Introduction In this chapter we shall be looking at liability for damage caused by defective products. A cause of action for defective products may lie in one of three areas of law. We shall be considering two of these in detail in this chapter: the tort of negligence; and under the Consumer Protection Act (CPA) 1987. The third area of law which might be of use in claims arising from defective products is contract law. Consider the following scenario. Helen buys a new hairdryer from a shop for using at home. The hairdryer has been negligently manufactured. As a result, it catches fire when Helen is using it and she suffers severe burns to her hands. Given that Helen herself bought the hairdryer, she has a claim in contract against the shop for breach of s 9 of the Consumer Rights Act 2015 (the implied term that goods supplied by a trader to a consumer will be of satisfactory quality). (Note that if Helen had purchased the hairdryer as a non-​consumer, eg for her hairdressing business, the requirement of satisfactory quality would be implied into the contract by s 14 of the Sale of Goods Act 1979.) In addition, as we will see, Helen has potential claims under the CPA 1987 and in negligence. Although we shall be focusing on tortious liability, you should always bear in mind the possibility of suing in contract where a buyer has suffered injury or loss as a result of a 175 Tort defective product. As we shall see at the conclusion of this chapter, a contractual claim has certain advantages over a tortious one. We are now going to consider the first of the two claims arising in tort where a product is defective, namely, a claim in negligence. 8.2 Common law negligence You are already familiar with the tort of negligence, having studied it in Chapter 2 and Chapter 3. You will remember that in order to succeed in a claim, the claimant must show that the defendant owes a duty of care which has been breached, causing damage to the claimant which is not too remote. These issues remain the same for a claim concerning defective products, but case law has established some special rules. 8.2.1 Duty of care: the narrow rule in Donoghue v Stevenson You studied the case of Donoghue v Stevenson All ER Rep 1 in Chapter 2. There you considered the role of this case in the development of a test for duty of care in ‘novel’ situations. Lord Atkin formulated the well-​known ‘neighbour principle’ in this context, which is often known as the ‘wide rule’ from Donoghue v Stevenson. You will remember that the case itself was about a bottle of ginger beer containing the remnants of a dead snail. On its facts it was a case concerning a defective product (the ginger beer). Having laid down the neighbour principle/​wide rule, Lord Atkin went on to consider the circumstances in which a manufacturer of a product would owe a duty of care to the consumer. This is usually known as the ‘narrow rule’ in Donoghue v Stevenson. To show a duty of care under the narrow rule, the claimant must establish that: the defendant is a ‘manufacturer’; the item causing damage is a ‘product’; the claimant is a ‘consumer’; and the product reached the consumer in the form in which it left the manufacturer with no reasonable possibility of intermediate examination. Each of these constituent elements is considered in turn below, starting with the meaning of ‘manufacturer’. 8.2.1.1 Who is a ‘manufacturer’? Liability is imposed on the ‘manufacturer’ of a product. The word ‘manufacturer’ for the purposes of the narrow rule is widely interpreted by the courts. Case law has extended this to include any person who works in some way on a product before it reaches the consumer. This includes, for example, repairers of products (Haseldine v Daw & Son Ltd 3 All ER 156), installers of products (Stennett v Hancock 2 All ER 578) and even, on rare occasions, suppliers of products (Andrews v Hopkinson 1 QB 229). Example Tessa has her car serviced by her local garage and a new boiler installed in her home by a firm of heating engineers. Both the local garage and the heating engineers would fall within the scope of a ‘manufacturer’ for the purposes of the narrow rule, and would owe a duty in negligence to Tessa. 176  Liability for Defective Products A supplier can be within the scope of ‘manufacturer’ for the purposes of the narrow rule. In Andrews v Hopkinson 1 QB 229, the supplier was found liable because a car’s defective steering could easily have been discovered by a competent mechanic. The supplier was under a duty to check the steering because of the car’s age (the defect being a common one in cars of its age) and because of the potentially serious consequences of allowing a car with defective steering to be driven on the road. Suppliers, therefore, may owe a duty under the narrow rule if the circumstances are such that they ought reasonably to inspect or test the products which they supply (eg because the manufacturer has asked them to do so). They could also owe a duty if they actually know of a defect/​danger. So the word ‘manufacturer’ for the purposes of the narrow rule is widely interpreted by the courts. Let us move on to look at the meaning of the term ‘product’ for the purposes of liability under the narrow rule. 8.2.1.2 What is a ‘product’? The case of Donoghue v Stevenson concerned a drink, but the word ‘product’ covers almost any item you can imagine which is capable of causing damage. In addition, as Lord Atkin talked about an absence of care in the preparation of or ‘putting up’ of the product, it is clear that the duty also extends to items supplied with the product, eg packaging, containers, labels, instructions for use. According to Lord Atkin, the manufacturer of a product owes a duty of care to a ‘consumer’. Let us therefore consider who might come within this term. 8.2.1.3 Who is a ‘consumer’? This term includes not only the ultimate user of the product, but also anyone whom the defendant should reasonably have in mind as likely to be injured by the defendant’s negligence (ie ‘neighbours’ in Donoghue v Stevenson terms). Example Mrs Smith is driving her daughter, Pamela, and Pamela’s friend, Sandra, to school one day when she brakes approaching a bend in the road. Unfortunately, the brakes fail to function as they are defective (having been negligently manufactured). Mrs Smith’s car mounts the pavement, injuring William, a pedestrian. The car then ploughs into the wall of a house owned by Jennifer. Mrs Smith, Pamela and Sandra are badly injured. The term ‘consumer’ would cover all four people injured in the accident: Mrs Smith, Pamela, Sandra and William. It would also cover Jennifer whose house is damaged in the incident. They are all people whom the manufacturer of the brakes ought reasonably to have had in mind as likely to be injured by any failure to take reasonable care on its part. Cars are driven on roads adjacent to buildings and pavements, and cars are driven by people who may well be carrying passengers. Under the narrow rule, a duty will arise if there is ‘no reasonable possibility of intermediate examination’. You will now examine what this phrase means and its significance. 8.2.1.4 Intermediate examination The ginger beer in Donoghue v Stevenson was contained in a sealed, opaque bottle. There was therefore no likelihood of anyone examining the contents before they were 177 Tort consumed. However, if there is a reasonable possibility of intermediate examination then the ‘manufacturer’ of the product will not owe a duty under the Donoghue v Stevenson narrow rule. This does not necessarily mean an injured party will be without a cause of action as the duty may be owed instead by the party having the opportunity to examine the product. This is considered in the case below. In Kubach v Hollands 3 All ER 907, the claimant was a schoolgirl who was carrying out a chemical experiment with chemicals supplied by the teacher of the chemistry class, when an explosion occurred and she was severely injured. The teacher had purchased the chemicals from the second defendant. The chemicals were wrongly labelled, leading to them being unsuitable for the experiment. The second defendant had purchased the wrongly labelled chemicals from a third party, whose invoice stated: ‘The above goods are accurate as described on leaving our works but they must be examined and tested by user before use. The above goods are not invoiced as suitable for any purpose but they are of the nature and quality described.’ The second defendant had not carried out a test on the chemicals and had not advised the teacher that an examination or test would be advisable. The second defendant knew that the powder would be used for the purpose of school experiments, but it had not told the third party that the powder might be so used. The manufacturer escaped liability in Kubach v Hollands because the chemical was provided with an express warning that it was to be tested before use. Such a test would have revealed the problem. As the manufacturer expected the test to be carried out, there was a ‘reasonable possibility’ of an intermediate examination and so no duty arose under Lord Atkin’s narrow rule. The school escaped liability in Kubach v Hollands. Although the school, through the chemistry teacher, had supplied the chemical to the injured girl, it did not owe a duty as a supplier (under Lord Atkin’s narrow rule) as it had not been warned of any problem with the chemical or of the need to test before use. The court held that the second defendant, as the intermediate supplier of the chemical to the school, because of its knowledge of the need to test before use, owed a duty to the injured girl. It had breached this duty and so had to compensate for the girl’s injury. Although Lord Atkin in Donoghue v Stevenson talked about a ‘reasonable possibility’, it is clear from Kubach v Hollands that a mere opportunity or possibility of intermediate examination will not be enough to exonerate a manufacturer. The manufacturer must believe there is a likelihood of such an examination taking place. Note that if an examination by a third party (eg a supplier), or by the consumer themselves, would not have revealed the defect (eg because it is a hidden defect), the manufacturer will not be exonerated. 8.2.2 Scope of the duty owed under the narrow rule It is necessary to consider what types of loss are within the scope of the duty. Example Amanda buys a new toaster. Unfortunately, due to negligence in the manufacturing process, it fails to eject the toast from the toaster when it is cooked. As a result the toast catches fire. The fire spreads to Amanda’s kitchen curtains which are badly damaged. Amanda also suffers burns to her hands. Her toaster will need replacing and her kitchen redecorating. 178  Liability for Defective Products Lord Bridge in Murphy v Brentwood District Council (considered in Chapter 4) said that a duty under Donoghue v Stevenson’s narrow rule in respect of products would cover any injury to persons or damage to property done by the defect in the product. However, he said that if the only loss is the defective quality of the product itself, the reduction in value of the product, or the cost of repairing the defect or of replacing the product would not be covered by the duty of care. The reason for this is that he classified these losses, stemming purely from the defective quality of the item, as pure economic loss. Therefore the losses due to Amanda’s burns and the damage to the curtains in the example above are recoverable since they fall within the scope of the narrow rule, being injury and property damage respectively. The cost of replacing the faulty toaster is regarded as being pure economic loss and is not, therefore, recoverable in negligence. The cost of redecorating the kitchen is recoverable because this results from damage to property other than the defective product itself. 8.2.3 Breach of duty In all cases, the duty of care in negligence is to exercise reasonable care. The standard of care required would, for example, be: the reasonable ginger beer manufacturer, the reasonable garage or the reasonable hydraulic engineer. As in all claims in negligence, the actual standard of care expected of the reasonable person in each case will be determined by looking at all the circumstances, including the magnitude of the foreseeable risk, the gravity of potential injury, and the costs and practicalities of precautions. In addition, a manufacturer may be able to comply with its duty of care by adequately warning the consumer of any danger connected with the product. Warnings may also be relevant in the context of the ‘intermediate examination’ element of the narrow rule (eg Kubach v Hollands). 8.2.4 Proof of breach As with any claim in negligence, the onus of proving the duty has been breached lies with the claimant. The claimant’s task is not an easy one. How does the claimant produce evidence of what went wrong in the manufacturing process when the claimant was not present in the factory at the relevant time? Usually in negligence, where the facts are beyond the knowledge of the claimant, the claimant can be assisted in proving breach of duty by the maxim res ipsa loquitur. However, Lord Macmillan in Donoghue v Stevenson said that this maxim should not be relied on in cases of product liability. The problem faced by claimants is demonstrated by the case of Daniels v R White & Sons 4 All ER 258. Despite the presence of carbolic acid in their lemonade, the claimant failed to show that there was any problem with the manufacturing process. The court confirmed that the duty under Donoghue v Stevenson is only a duty to take reasonable care. As the defendant had apparently taken reasonable care, it was not in breach of duty. Despite Lord Macmillan’s dictum in Donoghue v Stevenson, other cases have been prepared to ‘infer’ breach of duty from facts that the claimant is able to prove. An example of this is the Privy Council decision in Grant v Australian Knitting Mills AC 85. Here the claimant suffered severe dermatitis due to the presence of sulphur in some underwear which the defendant had supplied. The claimant could prove the presence of the chemical in the factory and in the underwear, but could not show any specific problem in the manufacturing process. Nonetheless, the Privy Council inferred that the chemical would not have been present in the underwear had the defendants taken reasonable care, ie it inferred breach of duty. This approach was followed more recently in Carroll v Fearon PIQR P416. 179 Tort This inference differs from res ipsa loquitur in that it does require the claimant to prove some facts on which the court can base its inference. However, once the inference arises then, as with res ipsa loquitur, the court will infer breach of duty unless the defendant can rebut the inference of breach of duty by proving that the defect was not due to the defendant’s lack of care but to some later problem, for example the claimant’s own misuse of the product. 8.2.5 Causation and remoteness The claimant must prove that the defendant’s breach caused their loss in the normal way (ie the ‘but for’ test applies). This is illustrated in the context of product liability by the case of Evans v Triplex Safety Glass Co Ltd 1 All ER 283. Here the windscreen of the claimant’s car shattered some 12 months after it was fitted by the defendant. A shard of glass injured the claimant. Due to the lapse of time, the claimant could not establish any causal link between the alleged negligence by the defendant and the disintegration of his windscreen. If factual causation is established, the court will then consider any intervening acts and also the issue of remoteness, ie whether the claimant’s loss is of a reasonably foreseeable type (The Wagon Mound test). 8.2.6 Defences 8.2.6.1 Voluntary assumption of risk (volenti non fit injuria) If a claimant is aware of a defect in a product and nonetheless decides to continue with the use of the product then there is scope for the defendant to argue the defence of voluntary assumption of risk. This was envisaged as a possibility by Lord Wright in the Grant v Australian Knitting Mills case, when he said, ‘the man who consumes or uses a thing which he knows to be noxious cannot complain in respect of whatever mischief follows because it follows from his own conscious volition in choosing to incur the risk or uncertainty of mischance.’ However, as we saw in Chapter 3, knowledge of a risk is not on its own enough to amount to consent. The claimant’s conduct must also indicate a willing acceptance of the risk. This is difficult to show. 8.2.6.2 Contributory negligence If the circumstances are not enough to show consent, the defendant may alternatively rely on the partial defence of contributory negligence. Example Mike buys a new hammer to do some odd jobs around the house. When he uses it for the first time, he notices that the head is rather loose, but thinks he must have imagined it since it is, after all, brand new. He therefore continues to use it. On the third such occasion, when Mike is knocking a nail into a wall, the head of the hammer falls off and injures his foot. It is unlikely that Mike’s conduct is sufficiently foolhardy to equate to him consenting to run the risk of the hammer head falling off. However, any damages Mike recovers in a negligence claim against the manufacturer would be reduced on account of his contributory negligence in continuing to use the hammer once he became aware of the danger. 8.2.6.3 Exclusion of liability Liability in negligence for death or personal injury cannot be excluded at all (Unfair Contract Terms Act 1977 (UCTA 1977) and Consumer Rights Act 2015 (CRA 2015)) where liability arises in the course of a business or trade. However, liability to non-​consumers and consumers 180  Liability for Defective Products in negligence for other loss or damage can be excluded if the reasonableness test (UCTA 1977) or the fairness test (CRA 2015) is satisfied. 8.3 Consumer Protection Act 1987 In this section of the chapter, we shall be examining a claim under the Consumer Protection Act (CPA) 1987. A claim under the CPA 1987 provides an additional cause of action to a claim in negligence (but remember that a claimant cannot recover damages twice over for the same loss). We need to consider first who can bring a claim under the CPA 1987 and what they must establish. We then need to examine what types of damage come within the scope of the CPA 1987 and who is liable under it. Finally, we look at the available defences. 8.3.1 Who can sue? Under s 2(1) of the CPA 1987 anyone who can establish the following can sue under the CPA 1987: that they have suffered damage caused by a defect in a product. The class of claimants is, therefore, very wide. It is not just confined to the buyer, or even a direct user, of the defective product. In contrast to a claim in negligence under the narrow rule, neither need the claimant be a foreseeable victim. We are now going to examine the meaning of each of the requirements listed above. 8.3.2 ‘Damage’ ‘Damage’ is defined in s 5 of the CPA 1987. In summary: Claims for death and personal injury are without limit (s 5(1)). Personal injury is defined as including ‘any disease and any other impairment of a person’s physical or mental condition’ (s 5(1)). Damage to private property must exceed £275 before a claim for it can be brought (s 5(4)). Provided the loss of or damage to private property exceeds £275, the full amount of the loss or damage is recoverable. Damage caused by a defective product to business property is outside the scope of the CPA 1987 (s 5(3)). The cost of repairing or replacing the defective product itself is not recoverable (s 5(2)). This is regarded as being pure economic loss. Example Clive works from home. The contents of his study include a portable television set, an antique clock worth over £1,000 and a computer. He uses the computer predominantly for his business. One day the television explodes due to a mechanical defect. The resulting fire destroys the contents of Clive’s study. Clive is taken to hospital suffering from burns and the effects of smoke inhalation. 181 Tort The damage to the television itself is pure economic loss and not recoverable. The cost of replacing the clock is recoverable as this is damage to private property exceeding £275. The damage to the computer is damage to business property. The computer may be used for home purposes as well as business use. Under the CPA 1987, the property damage is excluded if ‘not … used mainly for his own private use’. As the facts state that the computer is used predominantly for business purposes, it would not be recoverable. Clive’s personal injury is recoverable. If Clive loses income because of his burns, ie economic loss consequential on physical damage or on personal injury, it is likely that he would be able to recover this applying the ordinary principles for assessing liability in tort (the CPA 1987 is silent on the point). If Clive chose to sue in negligence instead of under the CPA 1987, he would be able to recover for the loss of his computer in negligence, which he could not recover for under the CPA 1987. Damage to business property (assuming it is foreseeable) is recoverable in a negligence claim. In neither claim, however, can he recover for the damage to the television set (pure economic loss). The next requirement, which a claimant needs to establish, is the causal link between the claimant’s damage and the defect in the product. We therefore move on now to look at this. 8.3.3 ‘Caused by’ A claimant needs to establish the causal link between the claimant’s damage and the defect in the product. As with a claim in negligence, the claimant has the burden of proving causation, and the usual ‘but for’ test applies. However, under the CPA 1987, the claimant must show that the defect caused the damage. In negligence, the claimant must show that the defendant’s breach of duty caused the damage. (The issue of remoteness is not addressed in the CPA 1987. It may be, therefore, that if a claimant can establish damage caused by a defect, the defendant will be liable for that damage without limit. If the rules on remoteness do apply, however, then, as this is a tort of strict liability, the ‘direct consequences test’ from Re Polemis All ER 40 would probably govern the issue. This is more onerous to the defendant than the Wagon Mound test of foreseeability as the defendant is liable for all direct consequences of their tort, even those that are unforeseeable.) Let us now move on to look at the requirement that there should be a ‘defect’ in the product before a claim will lie under the CPA 1987. 8.3.4 ‘Defect’ Claimants suing under the CPA 1987 must prove that they have suffered damage caused wholly or partly by a defect in a product. ‘Defect’ as defined by s 3(1) of the CPA 1987 effectively means ‘unsafe’, ie that the safety of the product is not such as persons generally are entitled to expect. The CPA 1987, therefore, applies to products which are unsafe as opposed to products which are simply defective. This limitation does not apply to claims in negligence, but in essence a similar position is achieved, as under the narrow rule the duty only covers damage to property and personal injury and not pure economic loss. To decide the level of safety persons generally are entitled to expect, s 3(2) of the CPA 1987 sets out some circumstances to be taken into account, including: the whole get-​up and presentation of the product (including packaging, instructions, warnings); 182  Liability for Defective Products what the expected use of the product is; the age of the product in question. In A v National Blood Authority 3 All ER 289 the court decided that consumer expectations for blood products were that the blood would be free from viruses (such as hepatitis C). This meant the blood was defective within the meaning of the CPA 1987 even though the defendants showed that the risk of such a viral infection in blood was unavoidable at the time as there were no tests then available for this. This is much more onerous than the duty in negligence which is satisfied where a defendant takes all reasonable care. The defect must exist in a ‘product’, so we shall move on to consider the meaning of that term. 8.3.5 ‘Product’ The defect must exist in a ‘product’. Under s 1(2) the CPA 1987, ‘product’ is widely defined. It means ‘any goods or electricity and … includes a product which is comprised in another product whether … a component … or raw material’. This would, therefore, include component parts like an engine in a car. It also includes ‘blood’ (A v National Blood Authority 3 All ER 289). We have now identified and examined the essential elements of a claim under the CPA 1987. The next issue we need to consider is who the claimant should sue. 8.3.6 Who is liable? Under the CPA 1987, the four categories of potential defendant are: the producer of the product (ie the manufacturer); an ‘own-​brander’; an importer; a supplier, but only in limited circumstances outlined under s 2(3) of the CPA 1987. 8.3.6.1 The producer (manufacturer) The manufacturer of the ‘product’ will be the usual defendant. The definition of ‘product’ includes components as well as finished products. This means, therefore, that if a component part is faulty, both the manufacturer of the part and the manufacturer of the whole product are liable. Example An aircraft crashes due to faulty landing gear. Both the manufacturer of the aircraft and the manufacturer of the landing gear could be sued. 8.3.6.2 The ‘own-​brander’ This is the person who, by putting their name or trademark on the product, holds themselves out as being its producer. Example Many large retail stores in the UK (eg Marks & Spencer, Tesco) put their own brand name on goods produced by others. 183 Tort 8.3.6.3 An importer This is a person who imported the product into the UK from outside of the UK in order to supply it to another person. 8.3.6.4 A ‘forgetful supplier’ Under s 2(3) of the CPA 1987, a supplier (eg retailer) is liable only where they are unable to meet a victim’s request to identify any of the people involved in the chain of supply (eg the wholesaler or the manufacturer). Suppliers are otherwise not liable under the CPA 1987. Having looked at the categories of potential defendant, let us now move on to consider the nature of liability under the CPA 1987. 8.3.7 Nature of liability The CPA 1987 merely requires the claimant to show that they have suffered damage caused by a defect in a product. It does not require a claimant to prove that the defect resulted from any fault or carelessness on the defendant’s behalf. In other words, liability is strict under the CPA 1987 in that the defendant will be liable without proof of any fault on his part. A v National Blood Authority demonstrates the strict liability nature of the CPA 1987. The fact that the defect in the product was unavoidable was not an argument the defendant could put forward. Strict liability under the CPA 1987 is advantageous for claimants when compared with a claim in negligence based upon proving fault. Under the narrow rule in Donoghue v Stevenson, the claimant has to establish that the defendant had failed to reach the standard of care of the reasonable person in their position in order to prove breach of duty (and therefore negligence) on the defendant’s part. We have now finished looking at a claim under the CPA 1987 from the claimant’s viewpoint. We now turn to look at the claim from the defendant’s perspective, considering what defences may be available. 8.3.8 Defences Once a claimant establishes a defect, causation and damage, the onus shifts to the defendant to establish one of the defences under s 4 of the CPA 1987. The availability of these complete defences means that although the defendant’s liability is strict, it is not absolute. 8.3.8.1 The defect was attributable to compliance with legal requirements Compliance with a legal requirement will absolve a producer from liability only if the defect was an inevitable result of compliance. 8.3.8.2 The defendant did not supply the product to another Example A thief breaks into a factory and steals a batch of toys which contain defects. A child of the thief is subsequently injured when playing with the toy. The manufacturer has not supplied the toy to the thief (or to the child) and therefore could rely on this defence. 8.3.8.3 The defendant supplied the product otherwise than in the course of business Example A defective product is sold by one friend to another. 184  Liability for Defective Products 8.3.8.4 The defect did not exist when the defendant supplied the product If a defendant could therefore show that the defect was caused by misuse of the product or by fair wear and tear, this defence will succeed. 8.3.8.5 A manufacturer of component parts is not liable for a defect in the finished product Which is wholly attributable to the design of the finished product or to compliance with the instructions given by the manufacturer of the finished product 8.3.8.6 ‘Development risks’ (or ‘state of the art’) This defence is the most controversial, particularly in the area of drugs, medicines and pharmaceutical products –​in fact it is one of the most controversial aspects of the whole Act. To rely on the development risks defence, a defendant must prove that the state of knowledge, at the time the product was supplied, amongst producers of the product in question, was not such as to allow a producer of the product to discover the defect. Case law has confirmed that when considering this defence, the producer in question should be judged against the highest standard of knowledge that is accessible anywhere in the world. A producer would only be able to rely on this defence, therefore, if they could show that they could not have discovered the defect via any information accessible anywhere in the world. This considerably curtails the scope of this defence. In addition, the case of A v National Blood Authority 3 All ER 289 confirms that the defence only applies to defects/​risks that could not have been foreseen. It did not therefore help the defendant in that case, as the risk of blood infection was known but nothing could be done about it. Even allowing for the narrow interpretation of the developmental risks defence as discussed above, this defence remains an important one, especially in sectors such as the pharmaceutical industry. Arguments for the defence’s inclusion are principally centred round the idea that, if the defence was not available, manufacturers might be deterred from developing new products, particularly in high-​risk industries (eg drugs). Given that these new products might be of benefit to the general public, the general public might, therefore, be losers in the long run. The principal argument against the defence’s inclusion is that individual consumers have to bear these development risks should they materialise. It would be more appropriate for manufacturers to bear the risks because they can insure. 8.3.8.7 Contributory negligence In addition to the complete defences considered above, the CPA 1987 also retains the partial defence of contributory negligence. The defence of contributory negligence applies where the claimant is partly responsible for their loss or damage. In such cases the defendant may rely on contributory negligence in the usual way (considered in Chapter 3). Example Bethan buys a new electric blanket and leaves it switched on in her bed one evening when she goes out to visit a friend. The blanket has been negligently manufactured and, as a consequence, catches fire. Bethan returns home to find her house has been destroyed in the resulting fire. It is likely that the blanket is defective under the CPA 1987, but there would be a finding of contributory negligence against Bethan in these circumstances, to the extent that her carelessness has caused or contributed to the damage she has suffered. 185 Tort 8.3.8.8 Exclusion of liability Under s 7 of the CPA 1987, a defendant cannot exclude, limit or restrict their liability in any way. (Liability in negligence for death or personal injury cannot be excluded at all (UCTA 1977, s 2(1) and CRA 2015, s 65) where liability arises in the course of a business or trade. However, in contrast to the position under the CPA 1987, liability to non-​consumers and consumers in negligence for other loss or damage can be excluded if the reasonableness test (UCTA 1977, s 2(2)) or the fairness test (CRA 2015, s 62) is satisfied.) As you have studied the CPA 1987 claim, you may have noticed similarities to and differences from the claim in negligence under the narrow rule in Donoghue v Stevenson. 8.4 Claims in negligence and under the Consumer Protection Act 1987 compared and contrasted As you have seen, in A v National Blood Authority 3 All ER 289, the claimant was given a blood transfusion which was infected with hepatitis. The court agreed that this product was not as safe as the consumer was entitled to expect. The Authority argued that it knew of the risk but had no way of telling at the time which batches of blood might be infected. The court accepted that the CPA 1987 was stricter than common law negligence and found in favour of the claimant. This is, therefore, a very significant case, as it shows that the CPA 1987 is capable of achieving its purpose of providing greater protection for the consumer. In the activity below, you will have the opportunity to compare and contrast claims in negligence for defective products and claims under the CPA 1987. ACTIVITY 1 Claims in negligence and under the CPA 1987 Please complete the chart below, putting a tick in the appropriate box to indicate whether you think there is a common or a different approach in negligence and under the CPA 1987 to the issues listed in the chart. If you tick the ‘No’ box, make a note of your reasons for doing so. The issue Same position Yes No 1. The strictness of the liability. 2. Recovery for personal injury. 3. Recovery for damage to other property. 4. Recovery for cost of repairing or replacing defective product. 5. Class of potential claimants. 6. Class of potential defendants. COMMENT The issue Same position Yes No 1. The strictness of the liability. √ 2. Recovery for personal injury. √ 186  Liability for Defective Products The issue Same position 3. Recovery for damage to other property. √ 4. Recovery for cost of repairing or replacing defective product. √ 5. Class of potential claimants. √ 6. Class of potential defendants. √ Under the CPA 1987, liability is strict; whereas in a claim in negligence, the claimant must establish the defendant’s negligence in order to succeed. While damage to other property is recoverable under both claims, if business property has been damaged, no claim for the damage lies under the CPA 1987. Furthermore, the minimum claim for damage to private property under the CPA 1987 is £275. The class of potential claimants is wider under the CPA 1987, given that a claimant need not be a foreseeable victim. The class of potential defendants is wider under the tort of negligence and would include people like repairers and installers. They would not come under the definition of a ‘producer’ in the CPA 1987. However, the CPA 1987 covers importers in certain cases and own-​branders, both of whom would not be within the scope of a negligence claim. We have now finished looking at the two claims which may arise in tort where a product is defective. In the final section of this chapter, we will briefly consider the position in contract. 8.5 Liability in contract We saw at the beginning of this chapter that you should always consider a possible claim in contract against the supplier of a defective product. Of course in some cases this will not be an option, eg where the claimant was not the buyer of the product (and does not come within the Contracts (Rights of Third Parties) Act 1999), or where the supplier has gone out of business. If, however, a contractual claim is available, this may prove to be the best claim to pursue. Example Let us return to the scenario involving Clive (see the example at 8.3.2) with a view to comparing his tortious and contractual claims. We saw in the example at 8.3.2 that Clive could recover more of his losses in a claim in negligence than under the CPA 1987, because he could then recover for everything apart from the cost of replacing the television. Clive’s best claim (assuming he bought the television set himself) would lie in contract for breach of the terms implied by s 9 and s 10 of the Consumer Rights Act 2015 (in that the television is not of satisfactory quality nor reasonably fit for its purpose). He would not have to prove fault on the part of the supplier (strict liability exists under s 9 and s 10) and his damages would extend to the cost of replacing the television, as pure economic loss is recoverable in contract. He would be able to recover all his other losses as well, as they too fall within the scope of the rule in Hadley v Baxendale (1854) Exch 341, being either a natural consequence of the breach or something in the contemplation of the parties at the time the contract was entered into. 187 Tort The follow-​up activity below gives you an opportunity to consolidate your knowledge and understanding of this area. ACTIVITY 2 Liability for defective products This follow-​up activity is in three parts. It tests your understanding of and ability to apply the material you have covered in this chapter. Please read the following scenario and adopt the approach suggested for each part of the activity. PART 1 Negligence: Application of the narrow rule in Donoghue v Stevenson You will need to ensure that you understand the essential elements of the narrow rule before you attempt this activity. You may find you need to re-​read some or all of the material covered so far in this chapter before tackling this activity. It is designed to enable you to check your understanding of the narrow rule and your ability to apply it to a factual scenario. Please read the factual scenario below. Natasha is a professional violinist. As she was rather overweight, she decided that she needed to get more exercise, and therefore she bought herself a top of the range exercise bike from Sam’s sports shop. She took the bike home and read the instruction booklet carefully before using it for the first time. The instructions said nothing about weight limits for users of the exercise bike. The exercise bike had been made by a company called ‘Getfit Bikes Ltd’. Later that day Natasha decided to practise her violin at the same time as trying out the exercise bike. After a couple of minutes the bike collapsed. Natasha fell off the bike, broke her arm, smashed her glasses worth £150, and caused extensive damage to her expensive violin. Natasha has heard a rumour from a friend who works at Sam’s sports shop that the shop is in financial difficulties and may have to close. Consider whether Natasha would have successful claims in negligence against Getfit Bikes Ltd and/​or Sam’s sports shop for the loss and damage she has suffered. We recommend that you consider the following issues in answering this activity: 1. Does Getfit Bikes Ltd constitute a ‘manufacturer’ for the purposes of the narrow rule in Donoghue v Stevenson? 2. Is the exercise bike a ‘product’ for the purposes of the narrow rule? 3. Would Natasha be a ‘consumer’? 4. Was there a reasonable likelihood of an intermediate examination of the bike before Natasha used it which would have revealed the defect? 5. What losses will be covered by any duty Getfit Bikes Ltd owes to Natasha? 6. If Getfit Bikes Ltd did owe Natasha a duty of care under the narrow rule, what standard of care was expected of it? 188  Liability for Defective Products 7. How will Natasha prove breach of duty, and how easy will it be to do so? 8. If Natasha can prove Getfit Bikes Ltd’s breach, can she establish the causal link between its breach and the loss and damage she has suffered? Can she show that her losses are not too remote? 9. Are there any complete or partial defences that Getfit Bikes Ltd might successfully raise against Natasha? Having considered these issues in relation to a potential claim in negligence against Getfit Bikes Ltd, you then need to consider them in relation to Natasha’s potential claim against Sam’s sports shop. COMMENT Natasha v Getfit Bikes Looking at the issues you were recommended to consider in relation to a claim against Getfit Bikes Ltd: 1. Getfit Bikes Ltd clearly comes within the term ‘manufacturer’ for the purposes of the narrow rule. 2. An exercise bike would constitute a ‘product’. 3. Natasha would be a ‘consumer’, being a user of the bike. 4. Getfit Bikes Ltd may argue that no duty was owed as it was relying on an intermediate examination by the shop or by the consumer. It would have to show that such an examination was reasonably probable and would have been sufficient to reveal the danger. (This will depend upon the usual practice in relation to such products and whether Natasha had been made aware, eg in the instructions accompanying the bike, of any need to test the bike before using it, although this seems unlikely.) 5. Any duty owed by Getfit Bikes Ltd would, subject to issues of causation and remoteness (see 8 below), cover Natasha’s broken arm, broken glasses and broken violin. It would not cover the cost of repairing or replacing the bike itself as this is pure economic loss (see Murphy v Brentwood). 6. If Getfit Bikes Ltd did owe Natasha a duty of care, it must reach the standard of the reasonable manufacturer of exercise bikes. 7. Natasha will need to establish facts from which breach can be inferred. Natasha will have to produce some evidence that the defect was present when the bike left the factory. In practice it would be important to discover exactly why the bike collapsed. Was it put together correctly? Were the instructions clear? Was there a missing part? 8. Natasha must show that, but for Getfit Bikes Ltd’s lack of care, the bike would not have collapsed, causing her injury and other losses. She must also show that her losses are not too remote, ie they are of a reasonably foreseeable type (the Wagon Mound test). Here the injury to her arm and broken glasses are foreseeable types of harm, but a court may consider that it is not foreseeable that one would be playing a violin on an exercise bike and find this loss too remote. 9. Getfit Bikes Ltd might try to raise contributory negligence (under the Law Reform (Contributory Negligence) Act 1945) against Natasha, in that she was using the bike whilst playing her violin. This partial defence will succeed only if it can show that by 189 Tort so doing Natasha had failed to take reasonable care for her own safety (if the bike had been safe her actions would probably not have been unreasonable –​just a little unusual!) and that this failure had contributed to the harm she suffered. Given that the bike has collapsed, it is probable that Natasha would still have fallen off it even if she had had her hands on the handlebars at the time. It is therefore unlikely that there would be a finding of contributory negligence against Natasha, and consequently her damages are unlikely to be reduced. The conclusion to be drawn on Natasha’s potential claim in negligence against Getfit Bikes Ltd is that she has a good chance of succeeding with this claim, but only in respect of her broken arm and glasses. Natasha v Sam’s sport shop Turning now to consider Natasha’s potential claim in negligence against Sam’s sports shop, we must consider the same issues as we considered for her claim against Getfit Bikes Ltd (where the issues are exactly the same, you are referred back to the earlier part of the exercise): 1. Would the sports shop be a ‘manufacturer’ for the purposes of the narrow rule? Suppliers have been held to come within the term where their function went beyond mere distribution (see, for example, Andrews v Hopkinson). The issue here, therefore, is whether the shop was expected to check the bike before selling it to Natasha. This will be a question of fact. 2. See claim against the manufacturer. 3. See claim against the manufacturer. 4. We have dealt with the issue of an intermediate examination in 1 above, when considering whether the shop could constitute a ‘manufacturer’. 5. See claim against the manufacturer. 6. If the shop owed Natasha a duty of care, the standard of care expected of it would be that of a reasonable sports shop. 7. If Natasha can prove the shop owed her a duty then proving breach would not appear problematic, as it has not examined or tested the goods before selling to her. 8. If Natasha can prove the shop’s breach, she will have to establish that, but for its failure to examine and/​or test the bike properly, the bike would not have collapsed. 9. See claim against manufacturer. On the facts, it is more likely that Natasha will have a claim in negligence against Getfit Bikes Ltd than against the sports shop. PART 2 Application of the principal provisions of the CPA 1987 Please re-​read the factual scenario concerning Natasha and her exercise bike. We are now going to consider Natasha’s potential claims under the CPA 1987. We recommend you adopt the following approach and consider the issues listed below: 190  Liability for Defective Products 1. To be able to sue under the CPA 1987, Natasha must prove: ‘damage’ (as defined in s 5); caused by; a ‘defect’ (as defined in s 3(1)); in a ‘product’ (as defined in s 1(2)). Can she prove these requirements? 2. If Natasha has a claim under the CPA 1987, whom will she sue? 3. Does Natasha have to prove fault against a defendant? 4. Could any defence or partial defence be relied on against Natasha? How does this compare with her negligence claim, which you looked at in Part 1 of this follow-​up activity? COMMENT 1. Natasha has suffered ‘damage’ for the purposes of the CPA 1987 as she has broken her arm, and any consequential losses, such as lost earnings, due to her inability to play the violin with a broken arm. She will not be able to claim for the cost of repairing or replacing the bike as damage to the defective product itself is excluded by s 5(2). Neither will she be able to recover the cost of her damaged violin if it is regarded as ‘business’ property (see s 5(3)). The cost of replacement glasses will not be recoverable as they are worth less than £275. Whether this was caused by a ‘defect’ in the bike depends on whether its safety was not such as persons generally were entitled to expect in all the circumstances (s 3(1)). As Natasha was using the bike for the purpose for which it was marketed, having carefully read the instructions that came with it, and still suffered damage, it would seem that the bike was not as safe as persons would generally expect and, therefore, the damage seems to have been caused by a defect in the bike. Lastly, the bike is clearly a ‘product’ for the purposes of the CPA 1987. Natasha should therefore be able to bring a claim under the CPA 1987. 2. Natasha will be able to claim against the manufacturer of the bike (Getfit Bikes Ltd) as the producer of the product. She will not, however, have any claim under the CPA 1987 against the sports shop –​the shop is unlikely to be a ‘forgetful’ supplier and, in any event, Natasha knows who manufactured the bike. 3. Liability under the CPA 1987 is strict and therefore does not require proof of fault on the part of a defendant. 4. Getfit Bikes Ltd might argue that the defect was not present when the bike was supplied (s 4(1)(d)). Alternatively, they may raise contributory negligence against Natasha, but as we saw in Part 1, there is unlikely to be such a finding against her. Comparing the losses recoverable under Natasha’s two claims, Natasha can recover more under her negligence claim than under her CPA 1987 claim, because damages under the former claim would include the cost of replacing her glasses (but not the violin since this loss would probably be too remote). However, Natasha will find it easier to establish liability under the CPA 1987 claim since liability is strict. 191 Tort PART 3 A claim in contract We have seen that Natasha has potential claims in negligence and under the CPA 1987. What is Natasha’s other potential claim, and which of the three claims would you advise her to pursue? Make a note of your reasons. COMMENT Natasha’s other potential claim is against the shop for breach of contract. The exercise bike was clearly not of satisfactory quality, nor reasonably fit for its purpose under ss 9 and 10 of the Consumer Rights Act 2015. She will be able to claim for the cost of repairing or replacing the bike, as well as for her broken arm and the damage to her glasses. However, the damage to her violin may be too remote under Hadley v Baxendale (1854) Exch 341, being neither a natural consequence of the breach nor something in the contemplation of the parties at the time the contract was entered into. The contractual claim would, therefore, appear to be Natasha’s best claim. First, because liability under ss 9 and 10 of the Consumer Rights Act 2015 is strict (the shop need not have been at fault) and, secondly, because she can recover damages for more of her losses than in either of the other claims. However, if the rumour is true and Sam’s sports shop is in financial difficulties, it may not be worth suing. SUMMARY You began this chapter by establishing how the law of negligence operates in the field of product liability. You saw that under Donoghue v Stevenson the duty of care owed by a manufacturer to a consumer is subject to certain conditions. The scope of this duty has also been expanded by the courts beyond the literal interpretation of ‘manufacturer’ and ‘consumer’. In terms of case analysis, you saw that the other elements of a claim in negligence in this context are the same as you studied in Chapter 2 and Chapter 3. Next you considered liability under the Consumer Protection Act 1987.This is a statutory tort of strict liability, although you have seen that it is arguable whether it has significantly improved the position of a consumer or not. Finally, you looked briefly at the circumstances in which a claim in contract may be appropriate. Having studied the three areas of law potentially relevant to product liability, you should appreciate the various advantages and disadvantages of each. This means that you should be able to analyse a set of facts and advise accurately on the claims that may be available. 192  Liability for Defective Products Figure 8.1 Product liability: negligence flowchart Did the defendant owe the claimant a duty of care? Consider all of the following: – is the defendant a ‘manufacturer’? (can include repairers, installers and suppliers) – is the item that caused damage a product? – is the claimant a ‘consumer’? and – was there no reasonable possibility of an intermediate examination before the product reached the consumer that would have revealed the defect? YES. Consider breach of duty NO. There is no liability in negligence Was the defendant in breach of duty? (The defendant must reach the standard of the reasonable manufacturer) Consider factors (eg magnitude of the risk, warnings) Consider whether the claimant can prove facts on which the court can base an inference of breach. YES. Consider causation NO. There is no liability in negligence Did the defendant breach cause consequential damage (ie not the product itself) to the claimant? YES. Consider defences NO. There is no liability in negligence 193 Tort Figure 8.2 Product liability: Consumer Protection Act 1987 flowchart PRODUCT LIABILITY: CONSUMER PROTECTION ACT 1987 (CPA) Has the claimant suffered damage that is recoverable under the CPA? – personal injury and/or – damage to private property exceeding £275 (not business property or the product itself) YES. Was the NO. Consider a claim product defective, ie in negligence was the safety of the product not such as persons generally are entitled to expect? YES. Consider causation NO. There is no claim under the CPA Did the defect in the product cause the claimant damage? YES. Consider potential defendants NO. There is no liability – producer? under the CPA – own brander? – importer into the UK? – ‘forgetful supplier’ The defendant is strictly liable for the claimant’s damage subject to any available defences under the CPA 194