In February 2016, Mars Inc. recalled chocolate bars across fifty-five countries after a piece of red plastic was found in a Snickers bar in Germany, likely leading to millions of Euro in losses. Although only one bar was found to have been affected, Mars Inc. decided to take precautionary action to protect itself.
Awards for damages caused by defective products can be high, even for relatively minor claims. In the recent Irish case of Duhy v Ralph Lauren, a five year old was awarded €17,500 after suffering injuries from the elastic on an outfit which caused red marks on her legs, although the only treatment for the injury was the application of Bio Oil.
Product liability is the area of law where manufacturers or vendors are responsible for their products and any damage caused by them. Generally speaking, there are three means by which parties can seek legal recourse: contract law, negligence, or statute.
Where there is a contract between the parties, consumers can expect the product to be of a certain standard. The main piece of legislation in Ireland dealing with the quality of goods purchased under contract is the Sale of Goods and Supply of Services Act 1980. The law implies certain terms into a contract requiring goods to be of “merchantable quality” as well as safe and fit for purpose. If these terms are breached, the purchaser may sue for breach of contract.
However there are many cases where there is no contract, and the injured party must seek recourse by other means. In Ireland this has usually meant bringing an action for negligence.
The modern law of negligence can be traced back to 1932 in Scotland, when a woman named May Donoghue went to a café where her friend purchase a ginger beer for her. Mrs. Donoghue fell ill after consuming the beverage, apparently because the remains of a dead snail were in the bottle. At the time she had no legal recourse against the manufacturer because her friend had purchased the ginger beer for her; there was no contract between her and the manufacturer. However, the court held that the manufacturer was liable irrespective of the absence of a contractual relationship because he owed a “duty of care” to her and that duty had been breached. This duty arose where the harm was reasonably foreseeable; in that case, the defendant’s failure to find an effective cleaning system for the bottles made it reasonably foreseeable that consumers could suffer and that snails could find their way in to the bottles.
The standard of care expected from a manufacturer or vendor will depend on the type of product, and courts will consider the likelihood of injury, the seriousness of the potential injury, and the social utility of the product. For example, with pharmaceuticals, there are often unknown side effects and risks. In one recent Irish case a woman named Lorna Savage took an action against Pfizer for negligence when she developed a serious condition that left her in a wheelchair after taking a steroid produced by the company.
After the introduction of the Liability for Defective Products Act, 1991 (the “1991 Act”) this area now has the benefit of a statutory, strict liability regime. The Act does not replace other remedies, but provides another form of redress for victims of defective products. One of the main advantages of the Act is the broad definition of “producer.”
The Act provides a remedy for consumers against various parties involved in the manufacturing and distribution process. Producers who may be found liable include manufacturers of finished products or component parts or raw materials, and processors of agricultural produce. This can also be extended to importers where the producer of a product cannot be identified.
To make a claim it must be shown that the resulting injury or damage is due to a manufacturing or design error which should have been identified before the faulty product was placed on the market. The injured party has the onus of proving the damage, defect and the causal link between the two.
Under the 1991 Act a product is defective where it fails to provide the safety a person is entitled to expect, taking all circumstances into account, including the presentation of the product, the use to which it can be reasonably be expected to be put, and the time it was put into circulation. This does not mean that a product is defective just because there is a better product on the market, but at the very least the standard of safety acceptable at the time must be considered.
Manufacturers also have a duty to warn consumers about known hazards and dangers surrounding the use of their products, but even with warning labels, they can still find themselves vulnerable to claims. In the infamous McDonald’s hot coffee case in America, also known as Liebeck v McDonald’s Restaurants, Stella Liebeck sued McDonald’s after suffering third-degree burns when she spilled scalding hot coffee in her lap. Although there was a warning on the coffee cup, the jury decided that it was not legally “adequate.” Liebeck was awarded $160,000 in compensatory damages and $2.7 million in punitive damages, before the case eventually settled out of court pending an appeal hearing.
The 1991 Act provides a number of defences, if it can be shown that:
Copyright © McKeever Rowan Solicitors, 19th May 2016
This article is a general review of the law on the subject and is not intended to be a complete statement of the law. Specific legal advice must be sought on a case by case basis. For further information please contact Emma Ledford