Overview of Product Liability in Tort
The formation and development of the product liability doctrine
Product liability plays a vital role in protecting consumers in many developed countries, with most nations establishing regulations to ensure comprehensive consumer safety Historically, the product liability regime has demonstrated its effectiveness in safeguarding both consumers and manufacturers The United States pioneered the development of product liability law, with its legal frameworks significantly influencing global standards Following America's lead, the European Union adopted its own product liability schemes, demonstrating strong commitment to consumer protection Understanding the history and development of product liability law is essential for grasping its theoretical foundations and practical applications.
The development of product liability law is closely linked to the decline of the doctrine of privity, which states that only directly involved parties in a contract can enforce rights or seek remedies As Professor William Prosser noted, the history of product liability law reflects an attack on the privity doctrine, empowering injured consumers to access legal remedies for damages caused by defective products Traditionally, under the privity doctrine, contractual product liability favored manufacturers, as only parties directly involved in the contract could claim compensation.
In their 2010 publication, M.A Tran Thi Quang Hong and Truong Hong Quang discuss key issues regarding the product liability system and its crucial role in consumer protection They highlight the importance of establishing clear legal frameworks to assign responsibility for defective products, ensuring consumers receive adequate safeguard The authors emphasize that effective product liability regulations help promote safety standards and hold manufacturers accountable, ultimately safeguarding consumer rights Their analysis underscores the significance of a well-developed legal structure to enhance consumer protection and maintain market trust.
The doctrine of privity holds that, under normal circumstances, a contract cannot confer rights or impose obligations on anyone other than the parties involved This principle limits the ability of third parties to benefit from or be bound by contractual agreements, emphasizing that only those directly contracting have enforceable rights and responsibilities For more detailed information, visit: http://www.lawteacher.net/contract-law/privity.php#ixzz2U30U24IL.
6 M.A Tran Thi Quang Hong, Truong Hong Quang (2010), above n 4
7 Denis W Stearns, (2001), Product liability: A brief history of its early origins, Marler Clark, LLP, p.1 Source: http://www.marlerclark.com/pdfs/intro-product-liability-law.pdf, 06/08/2013 8.30
6 not be sued, even for negligence, if there is no contractual relationship between the manufacturer and the plaintiff
In the nineteenth century, the privity doctrine was utilized by defendants and judges to oppose plaintiffs seeking compensation for damages caused by defective products For decades thereafter, this doctrine continued to dominate legal cases related to product liability, shaping how courts addressed claims of injury or loss resulting from defective goods.
The seminal case MacPherson v Buick Motor Co of The Court of Appeals of New
York 8 marked the rejection of the privity doctrine in the United States In this case, the plaintiff was injured when a wheel on the car he was driving, and which he bought from a retailer, fell in to pieces, causing the car to crash He brought an action for negligence against the manufacturer The court upheld the plaintiff’s claim and Buick Motor Co had to pay damages to Macpherson This case determined that lack of privity is not a defense if it is foreseeable that the product is likely to cause injury negligently to the consumers
The MacPherson precedent established a significant shift in negligence law across the United States, dismantling the strict privity requirement in product liability cases Recognized as a groundbreaking case, it paved the way for courts nationwide to accept the theory of negligence concerning defective products This landmark decision not only became the standard in negligence jurisprudence but also initiated the development of the tort of negligence within product liability, influencing legal practices across all states.
Following the abolition of the privity doctrine, consumers gained two primary legal avenues: an action in negligence and an action for breach of warranty in contract However, liability for breach of warranty is limited to situations where the parties are in privity of contract, as warranties were originally considered an integral part of the sales agreement This restriction particularly affects claims based on express warranties, which are deemed to be directly made to the buyer within the context of the sales contract.
8 http://www.courts.state.ny.us/reporter/archives/macpherson_buick.htm, 12/07/2013 11.05
Warranties in a contract provide assurance that goods conform to the contract description, are suitable for their intended purpose, and possess merchantable quality If a defective product causes injury to a consumer, the seller can be held liable for breach of warranty Product liability law encompasses three key types of warranties related to a product’s quality and fitness for use: express warranties, implied warranties of merchantability, and implied warranties of fitness for a particular purpose.
10 http://legal-dictionary.thefreedictionary.com/Breach+of+Warranty 26/05/2013 09.10
Historically, the privity requirement in product liability cases was abandoned in the 1930s, significantly broadening consumer protection Initially, implied warranties applied only to food, drink, and similar products, with limited exceptions However, the landmark case Henningsen v Bloomfield Motors Inc by the New Jersey Supreme Court marked a pivotal shift, emphasizing that liability extends to any manufacturer who places their product into commerce and actively promotes it, even without privity to the original buyer Despite this expansion, Henningsen was rooted in contract law, specifically based on the theory of implied warranty, highlighting the evolving approach to manufacturer liability in product law.
Courts developed two key legal philosophies, negligence and warranty, which are now effectively used in products liability cases While negligence requires establishing fault, its application in consumer protection is limited by this requirement Conversely, warranty claims, though initially constrained by the privity requirement, provided an alternative legal avenue for consumers to seek recovery without proving fault.
Between 1930 and 1960, legal scholars and judges explored the development of strict liability in tort for defective products, leading many U.S courts to impose such liability on manufacturers based on various notions of breach of warranty The landmark case Escola v Coca Cola Bottling Co of Fresno by the California Supreme Court is a key example, where a waitress's hand was injured due to an exploding Coca-Cola bottle In this case, despite the plaintiff’s inability to prove the manufacturer's fault, the judge emphasized that the producer and distributor of Coca-Cola bottles held responsibility for defects that occurred during normal use, marking a significant advancement in products liability law.
11 http://law.jrank.org/pages/9466/Product-Liability-Historical-Development.html, 12/07/2013 11.10
12 www.casebriefs.com/blog/law/contracts/contracts-keyed-to-farnsworth/policing-the-bargain/henningsen-v- bloomfield-motors-inc-2, 12/07/2013 11.07
13 The School of Law – Washington University (1974), Strict Product Liability in Tort and the Meaning of
“Unreasonably Dangerous” Defects, Journal of Urban and Contemporary Law, Vol.8, p344-345 See more at: http://digitalcommons.law.wustl.edu/urbanlaw/vol8/iss1/22/, 03/07/2013 09.30
14 http://www.uic.edu/classes/eecs/eecs491el/LectureText/Lect10Text.htm, 04/07/2013 20.30
15 http://law.jrank.org/pages/9466/Product-Liability-Historical-Development.html, 04/07/2013 19.50
16 http://www.casebriefs.com/blog/law/torts/torts-keyed-to-epstein/products-liability/escola-v-coca-cola-bottling-co- of-fresno/, 04/07/2013 20.50
In 1963, the California Supreme Court's landmark decision in Greenman v Yuba Power Products marked a pivotal moment in the development of strict liability in product liability law This case established the doctrine of strict liability in tort as a foundational basis for holding manufacturers accountable for defective products The adoption of this doctrine eliminated many challenges plaintiffs faced under traditional liability theories, thereby significantly advancing product liability regulation and providing clearer protections for consumers Additionally, the case highlighted the unpredictability a defendant might face in certain conditions, emphasizing the importance of strict liability in ensuring accountability even in unforeseen circumstances.
The surge in large-scale goods production has made quality control more challenging, leading to increased risks of damage to individuals, property, and third parties due to defective products As a result, cases of product liability are on the rise, particularly in developing countries, highlighting the objective need for comprehensive product liability laws In the context of a globalized market economy, establishing clear legal frameworks for product liability is essential to protect consumers and maintain market integrity.
Definition and nature of product liability in tort
Product liability law holds manufacturers, distributors, suppliers, and retailers accountable for injuries caused by the products they make available to the public This legal area ensures that companies are responsible for any harm their products may inflict, emphasizing the importance of safety and accountability in the marketplace Understanding product liability is crucial for consumers and businesses alike to navigate legal rights and obligations effectively.
Product liability, as defined by Black’s Law Dictionary, refers to the legal responsibility of manufacturers and sellers to compensate buyers, users, and bystanders for damages or injuries caused by defective products This area of law encompasses tort claims such as product liability actions in negligence and strict product liability, emphasizing the duty of producers to ensure product safety and the legal consequences of failing to do so Proper understanding of product liability is essential for both consumers and businesses to navigate their rights and responsibilities under the law.
17 Nguyen Thi Tuong Vi (2009), Trach nhiem san pham theo phap luat Cong dong Chau Au va Phap luat Viet Nam
(Product liability in EC’s law and Vietnamese law), Bachelors’ Thesis, HCMC Univerysity of Law, p6
18 See Greenman v Yuba Power Products (1963), http://online.ceb.com/CalCases/C2/59C2d57.htm, 04/07/2013 20.15
19 Nguyen Thi Tuong Vi (2009), above n 16, p6
Dr Tang Van Nghia (2008) discusses the importance of understanding product liability laws in international trade, emphasizing their role in ensuring consumer protection and fair business practices His article, titled "Discussion on Law on Product Liability in Foreign Trade," published in the State and Law Review Journal, highlights the legal responsibilities of businesses operating in global markets The study underscores the need for clear regulations to mitigate risks and promote accountability in cross-border commercial transactions Overall, the research provides valuable insights into the legal framework governing product liability and its impact on international trade relations.
21 http://www.out-law.com/en/topics/commercial/supply-of-goods-and-services/product-liability-under-the- consumer-protection-act/, 05/07/2013 11.25
22 Black's Law Dictionary 5th edition (1979), West Publishing
Product liability aims to protect consumer interests and is addressed in various legal frameworks worldwide In the United States, Section 402A of the Restatement (Second) of Torts (1965) defines product liability as holding sellers responsible when they sell products in a defective and unreasonably dangerous condition that causes harm to consumers or their property Similarly, the European Union’s Council Directive 85/374/EEC of July 25, 1985, establishes that producers are liable for damages caused by defective products, emphasizing the importance of manufacturer accountability in ensuring consumer safety.
From the definition of product liability, we can draw out the following feature while doing a research about product liability in tort:
Product liability in tort law involves compensating for damages caused outside of a contractual relationship This form of strict liability holds producers responsible for consumer harm, regardless of contractual ties Importantly, establishing product liability does not require a direct contractual relationship between the injured party and the manufacturer, emphasizing the protective scope of tort-based product liability.
The individual responsible for damages is typically the person involved in the product's transfer from production to consumers This responsibility may vary across countries, depending on national product liability regulations, and often involves a direct or indirect connection to the consumers According to the principle of product liability, every product in the marketplace is guaranteed to be responsible for its safety and quality.
- The product is defective and there is a casual link between the and the damage 27
Determining manufacturer, producer, or wholesaler liability requires proving that a defective product caused harm Consumers must demonstrate the presence of a defect, the resulting damage, and the causal link between the defect and the injury Only with clear proof of these elements can they successfully seek compensation for damages.
23 http://biotech.law.lsu.edu/cases/products/402a-b.htm 05/08/2013 02.30
24 http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uriEX:31985L0374:en:HTML 05/08/2013 02.45
25 M.A Tran Thi Quang Hong, Truong Hong Quang (2010), above n 4
1.2.2 Nature of the product liability in the area of tort
Product liability regulation mandates that manufacturers deliver safe, high-quality products that meet consumer expectations This legal framework enhances manufacturer accountability and encourages greater responsibility in product development Ultimately, it serves to protect consumers effectively by ensuring their safety and satisfaction.
Product liability can be categorized as either contractual or tortious Unlike contractual product liability, tortious liability arises when a defective product causes damage, even without a direct contractual relationship between consumers and producers, distributors, or importers Tort-based product liability aims to compensate injured parties regardless of privity of contract, offering broader protection for consumers Consumers can assert their rights through legal actions such as negligence or strict product liability claims against those involved in designing, manufacturing, or selling the defective product This legal framework enhances consumer protection more effectively than traditional contractual regulations.
Basic content of the product liability under the law of tort
Product liability generally centers on defective consumer products, particularly in cases of tort liability Most legal issues concern the responsibility of manufacturers and sellers within the distribution chain for causing physical harm due to product dangerousness Product liability arises only when products are defective and cause damage to consumers, making defectiveness and resultant harm the key factors in establishing liability.
Object of product liability has the following characteristic: firstly, it is product that is for consumption needs and is statutory regulated and secondly, that product has to be defective
According to Karl Marx, a product is the result of the working process that serves human needs In a market economy, a product is generally defined as any item that satisfies market demands and provides benefits Effective products are designed to meet consumer needs while generating economic value, making them essential for market success Understanding the relationship between the working process and market requirements is crucial for creating products that are both functional and profitable.
11 daily needs of human and can also be used for serving the needs of producing and other needs 28
According to Black’s Law Dictionary, a "product" refers to goods that are produced or manufactured through natural means, by hand, or using tools, machinery, and chemicals It encompasses items created through physical labor, intellectual effort, or naturally generated through processes like growth or natural generation Understanding the definition of "product" is essential for legal and commercial contexts, emphasizing both human-made and naturally occurring items as valuable commodities.
Products can be classified into tangible and intangible categories Tangible products are physical objects, like buildings, vehicles, gadgets, or clothing, that can be touched and directly perceived In contrast, intangible products are services or policies, such as insurance, which cannot be physically touched and are perceived indirectly Understanding the difference between tangible and intangible products is essential for effective marketing and product classification.
- Depend on whether the product is moveable or not, product is classified as real estate or movable property 32
- Depend on the using purpose, product is divided into products for consumption needs and products for production and business needs 33
Under the view of law research about product liability in several countries in the world, product is mentioned as:
- Products in the form of tangible personal property (good or chattel) or intangible (service) 34
- Product for consumption needs (consumer-product)
- Product which is regulated particularly by law
1.3.1.2 Defective product in product liability under the law of tort
In general terms, product liability law requires a product to meet consumers’ ordinary expectations A product which contains an unexpected defect or danger does not
28 Nguyen Thi Tuong Vi (2009), above n 16, p.9
29 Black's Law Dictionary 6th edition (1990), West Publishing
30 Nguyen Thi Tuong Vi (2009), above n 16, p.10
31 http://en.wikipedia.org/wiki/Product_%28business%29 05/07/2013 08.45
32 Nguyen Thi Tuong Vi (2009), above n 16, p.10
34 Mark A Kinzie, Christine F Hart (2001), Product Liability Litigation, West Legal Studies, p.3
12 meet the ordinary expectations of the consumer 35 Victims of injury resulting from the use of unsafe and defective products may be entitled to be compensated in tort
In tortious product liability cases, the manufacturer, designer, seller, or distributor may be held liable if the product is dangerously defective or unsafe Identifying a defect is essential, as it serves as the foundation for establishing liability and is crucial for successful recovery or defense in product liability claims Ensuring products are safe and free from defects is vital to prevent legal exposure and protect consumer safety.
Black’s Law Dictionary defines “defective condition” as follows:
A product is considered defective and unreasonably dangerous if it has a propensity to cause physical harm beyond what an ordinary user would anticipate, given their common knowledge of its characteristics However, a product is not deemed defective solely because injury is possible during its use.
In product liability law, particularly in negligence-based claims, the manufacturer’s conduct is key to establishing whether a defect exists in the product Conversely, in strict liability cases, the product itself serves as the primary evidence to determine if a defect—such as manufacturing, design, or inadequate warning—was present.
There are three main types of product defects pertaining to product liability in tort which are manufacturing defects, design defects and marketing defects 39
Manufacturing defect will be determined if a product does not conform to design specifications or performance standards, 40 or it does not follow some material way from
35 http://injury.findlaw.com/product-liability/what-is-product-liability.html, 02/07/2013 23.15
"Unreasonably dangerous" refers to products that pose risks beyond what an ordinary consumer would expect, although this definition is not universally accepted Tort law recognizes that some beneficial products, such as prescription drugs and vaccines, cannot be made entirely safe due to their inherent hazards These products are not considered defective solely because of their risks, provided they are properly manufactured with appropriate warnings and instructions Importantly, design defects differ from manufacturing defects, and companies are generally not held strictly liable for properly made products that include necessary safety information.
37 Black's Law Dictionary 5th edition (1979), West Publishing
38 Mark A Kinzie, Christine F Hart (2001), above n 29, p.4
39 http://injury.findlaw.com/product-liability/what-is-product-liability.html, 05/07/2013 19.50
Manufacturing defects occur when a manufacturer fails to properly assemble, test, or quality-check a product, making them easier to prove using the manufacturer’s own standards For example, a worker may have failed to tighten a bolt adequately, or sub-standard raw materials may have been used, resulting in defective units within the same product line Identifying such defects is straightforward because consumers can compare the product against the manufacturer’s design or marketing specifications to establish defectiveness.
Defects that are obvious are often subject to liability in negligence cases, with courts readily holding manufacturers accountable Additionally, tort law employs strict liability principles, allowing plaintiffs to recover damages even when they cannot prove manufacturer negligence.
A design defect occurs when a product is manufactured correctly according to specifications but has inherent flaws from the pre-production or design stages For example, a chair with only three legs may be considered defectively designed because it tips over easily, posing safety risks Similarly, an automobile with a fuel tank positioned vulnerable to explosion upon low-speed impact represents a defective design that compromises safety Such defects highlight the importance of thorough design scrutiny to prevent potentially dangerous products from reaching consumers.
Design defect claims typically involve proving negligence; however, strict liability can be applied when a product's design is unreasonably dangerous To establish strict liability, the plaintiff must demonstrate that a cost-effective alternative design existed that could have prevented the risk of injury, emphasizing the importance of alternative design feasibility in safety considerations.
Marketing defects include labeling of products improperly, insufficient instructions, or the failure to warn consumers of product’s dangers 46 For example, tobacco companies
41 Mark A Kinzie, Christine F Hart (2001), above n 29
42 William M Pride (2013), Marketing 2014, 17th edition, Cengage Learning, p.135
43 http://injury.findlaw.com/product-liability/what-is-product-liability.html, 05/07/2013 20.25
44 See more at: http://www.biicl.org/files/1123_overview_uk.pdf, 06/07/2013 09.50
Design defects can arise in various situations, especially when a product's design makes it dangerously irrational and unintentionally harms consumers Assessing the risks associated with design defects is often complex due to the intricate nature of product safety evaluations Proper identification and evaluation of design flaws are crucial to prevent consumer injuries and ensure product safety.
45 http://injury.findlaw.com/product-liability/what-is-product-liability.html, 05/07/2013 20.35
Consumers have filed lawsuits against 14 companies for failing to provide proper warning signs about the health risks associated with their products These warnings are crucial, as tobacco products can cause cancer and other serious diseases, while certain cough syrups lack labels warning consumers of potential dangerous side effects when combined with common medications like aspirin Ensuring clear and accurate labeling is essential to protect consumer health and prevent harmful outcomes.
In this type of defect, a negligent regarding a product or action in strict tort liability may also give rise to a marketing defect claim
1.3.2 Parties to a product liability action under the law of tort
1.3.2.1 The people having the right to claim for product liability (Potential claimants)
Consumers harmed by defective products have the right to file product liability claims, enabling responsible parties to provide compensation Product liability claims can be initiated by individuals, corporations, or other business entities, regardless of their relationship to the product Notably, the plaintiff does not need to be the purchaser or in direct contact with the defendant to pursue a product liability lawsuit.
The meaning of the product liability in tort in the legal system
Product liability in tort is a vital legal mechanism that safeguards consumer rights by holding manufacturers accountable for defective products Since consumers typically face a disadvantaged position compared to producers in terms of economic power and risk-bearing capacity, this liability ensures fair protection Importantly, under the doctrine of product liability in tort, there is no need for a contractual relationship between consumers and manufacturers, establishing a legal foundation for consumers to seek justice and compensation when harmed by faulty products.
Product liability, particularly in tort law, significantly impacts manufacturers by holding them responsible for damages caused by defective products, thereby incentivizing improvements in product quality To mitigate risks and reduce compensation costs, manufacturers are motivated to enhance technology and overall product standards, which in turn boosts their reputation and strengthens brand trust among consumers Strict product liability laws that do not require proof of fault help eliminate substandard products from the market, ensuring consumer safety Additionally, these regulations foster healthier competition among manufacturers, encouraging the production of safer and higher-quality products.
In the context of rapid economic development worldwide, many countries are recognizing the importance of regulating product liability Most developed nations have already established comprehensive legal frameworks for product liability, while developing countries like Vietnam are actively working to build and improve their own systems Implementing product liability in tort represents a significant step forward in creating a legal framework that holds manufacturers accountable and safeguards consumer rights This legal approach not only ensures manufacturer responsibility but also serves as an effective tool to protect consumer interests and promote fair commercial practices Although the legal institution for product liability has only recently been established in some countries, its development is crucial for fostering consumer trust and enhancing product safety standards.
72 Punitive Damages under Products Liability, Read more http://www.ea2020.org/punitive-damages-under- products-liability.pdf, 04/08/2013 13h55
73 Nguyen Thi Tuong Vi (2009), above n 16, p.20
20 th century, this product liability institution in tort is developed quickly in order to protect consumers in the most efficient way 74
The European Union’s Law on product Liability and some issues
The European Union’s Law on product Liability under the area of tort
2.1.1 Overview of product liability law in European Union
The European Union (EU) is a political and economic union featuring a common market, single currency, and unified legal policies Its common market allows any legally manufactured product in one member state to be sold across all member countries without tariffs or duties, promoting free trade and economic integration While the EU’s common market has facilitated the free circulation of goods and enhanced commercial activities, challenges remain, particularly concerning consumer rights protection Despite each member country regulating manufacturer and distributor responsibilities, differing national regulations lead to legal conflicts and complicate efforts to effectively safeguard consumers across the EU.
Article 100 of Rome Convention in regard to EU’s foundation, set the enforcement of legal stipulation to regulate efficiently public matters, including protecting consumers 76
The Hague Convention of October 2, 1973, on the Law Applicable to Products Liability was validated on October 1, 1997, providing clear definitions of key concepts such as product, damage, the injured party, and responsible party It establishes that the law of the country where the damaged party resides should be applied to resolve product liability claims, ensuring a coordinated legal approach Additionally, the Convention effectively regulates the choice of applicable law to resolve conflicts of law in product liability cases, enhancing legal consistency and fairness.
On January 27, 1977, the European Convention on Products Liability concerning Personal Injury and Death (Strasbourg Convention 1977) was adopted This Convention establishes the liability of parties involved in the product supply chain for damages related to personal injury and health, including death It emphasizes a strict liability framework, ensuring that victims can seek redress irrespective of fault, thereby strengthening consumer protection across European member states.
75 Read more: http://useconomy.about.com/od/worldeconomy/p/european_union.htm, 04/08/2013 22.05
According to Article 100 of the Treaty of Rome (25/03/1957), the European Parliament and the Economic and Social Committee must be consulted when directives could require amendments to national legislation in one or more member states This provision underscores the importance of involving key EU institutions in legislative processes that impact national legal frameworks, promoting cooperative decision-making within the European Union.
77 Nguyen Thi Tuong Vi (2009), above n 16, p.22-23
The Strasbourg 1977 Convention significantly advanced product liability law within the European Community, establishing a foundational legal framework This Convention's provisions have been influential, with some regulations being inherited and further developed by Directive 85/374/EEC, shaping modern product liability standards across Europe.
Before 1985, product liability laws across European Community member states varied significantly, leading to potential barriers to intra-Community trade and unequal consumer protection This legal disparity could distort competition by favoring certain producers while disadvantaging others, as consumers faced different levels of protection and producers had varying duties across countries To address these issues, the European Community considered numerous proposals for a harmonized product liability directive throughout the 1970s This culminated in the adoption of Directive 85/374/EEC, establishing a unified legal framework for product liability within the EU.
1985 81 Directive 85/374/EEC also has discretionary clauses which allow the member countries to enforce more strict regulations in the Directive
2.1.1.2 Legal instruments governing product liability in European Union
EU’s Product liability matter is currently regulated by the following legal documents: 82
- Council Directive of 25 July 1985 on the approximation of the laws, regulations and administrative provisions of the Member States concerning liability for defective products (85/374/EEC)
- Directive 1999/34/EC of the European Parliament and of the Council of 10 May
1999 amending Council Directive 85/374/EEC on the approximation of the laws, regulations and administrative provisions of the Member States concerning liability for defective product
- Directive 98/27/EC of the European Parliament and of the Council of 19 May
1998 on injunctions for the protection of consumers' interests
78 Nguyen Thi Tuong Vi (2009), above n 16, p.23
79 For example, in France, the legal system imposed strict liability, whereas German and Greek law applied fault liability and English law was based on negligence
80 Pearson (1994), Law for European Business Studies, London, p.274
81 Council Directive of 25 July 1985 on the Approximation of the Laws, Regulations and Administrative Provisions of the Member States concerning Liability for Defective Products (85/374/EEC), OJ 1985, No L210/29
82 Nguyen Thi Tuong Vi (2009), above n 16, p.24
- Directive 2001/95/EC of the European Parliament and of the Council of 3 December 2001 on general product safety
- Council Regulation (EC) No 44/2001of 22 December 2000 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters
- Regulation (EC) No 864/2007 of the European Parliament and of the Council of
11 July 2007 on the law applicable to non-contractual obligations
This article highlights the comprehensive legal framework in the European Community governing product liability Specifically, the focus is on Directive 85/374/EEC, along with its amendments introduced by Directive 1999/34/EC, which modify certain provisions within the original directive Other regulations related to product liability are acknowledged but not examined in detail, emphasizing the importance of these two key directives in shaping product liability laws in Europe.
2.1.2 Basic content of product liability law under the law of tort in European Union
The Directive 85/374/EEC of EU proclaims strict liability as a regime for solving the problem relating to product liability The preface of the Directive starts by saying that
Harmonizing the laws of Member States is essential to prevent divergences that could distort competition, hinder the free movement of goods within the common market, and compromise consumer protection Strict liability, or liability without fault, is identified as the most effective solution to fairly allocate the risks associated with modern technological production in our increasingly advanced age The Directive implicitly introduces strict liability in Article 4, stating that injured individuals only need to prove the damage, the defect, and the causal link between them, thereby eliminating the necessity to prove fault.
The concentration will be focused upon the relevant rules of the law of tort and upon The Directive 85/374/EEC only
2.1.2.1 Principle and purpose of the Directive 85/374/EEC a Principle of the Directive 85/374/EEC
83 Joel González Castillo (2012), “Products liability in Europe and the United States”, Revista Chilena de Derecho, Vol.39 No.2, pp.277–296
Source: http://www.scielo.cl/scielo.php?pid=S0718-34372012000200003&script=sciarttext, 03/08/2013 08.55
The Directive is made up of the following elements:
The concept of strict liability places responsibility on producers without requiring proof of fault, favoring the victim According to the EU Directive, this principle is fundamental and considered the most effective way to address product safety concerns Given the increasing technical complexity and specialized knowledge in modern products, evaluating latent risks has become challenging for consumers Consequently, EU laws on product liability focus on producer responsibility regardless of fault, aiming to reduce risks associated with technological advancements and modern manufacturing processes This approach ensures that victims receive protection and that manufacturers are held accountable for product safety in a continually evolving technological landscape.
- It places the burden of proof on the injured party insofar as the damage, the defect, and the causal relationship between the two is concerned;
The article emphasizes the importance of establishing joint and several liability among all operators in the production chain to ensure the injured party receives fair compensation This legal framework aims to provide a reliable financial guarantee for damages, holding each operator accountable to facilitate effective resolution and recovery processes By doing so, it strengthens consumer protection and promotes accountability within the supply chain.
- It provides for exoneration of the producer when the producer proves the existence of certain facts explicitly set out in the Directive;
- It sets liability limitations in terms of time, by virtue of uniform deadlines;
- It sets illegality of clauses limiting or excluding liability towards the injured party;
- It sets a limit for financial liability; and
- It provides for a regular review of its content in the light of the effects on injured parties and producers b Purpose of the Directive 85/374/EEC
The Directive is promulgated to archive two main purposes:
- Ensuring consumer protection against damage caused to health or property by a defective product and protecting manufacturer, creating fairness in the market;
- Reducing the disparities between national laws
84 Helen Delaney and Rene van de Zande (2001), A Guide to the EU Directive Concerning Liability for Defective
Products (Product Liability Directive), p.2 Read more at http://gsi.nist.gov/global/docs/EUGuide_ProductLiability.pdf, 03/08/2013 09.15
2.1.2.2 Subject that take legal responsibility
Article 1 of the Directive says that the producer shall be liable for damage caused by a defect in his product This means liability, or the responsibility to pay for damages, is placed on the producer Article 3 defines the producer not only as the manufacturer of a finished product, but also as:
- The maker of any raw material or the manufacturer of a component part;
- Any person who, by putting his/her name, trademark or other distinguishing feature on the product, presents himself/herself as the producer( known as own-brander);
When the producer of a product cannot be identified, any individual supplying the product is considered its producer This rule also applies to imported products that do not specify the importer’s identity, even if the producer’s name is listed The directive states that suppliers and importers who have informed the injured party of the producer’s or supplier’s identity cannot be held liable.
Any individual or company importing products into the Community for sale, hire, leasing, or distribution as part of their business operations, whether acting as an independent distributor or a branch of a foreign manufacturer, is subject to relevant import regulations 87
Article 3 of Directive 85/374/EEC allows the damage party to take legal proceedings against anyone involved in the product distribution chain in order to get compensation for damage
When multiple parties are responsible for the same damage, they are held jointly and severally liable, allowing the injured party to choose which defendant to sue based on factors like ease of legal action, financial capacity, or insurance coverage This system provides the plaintiff with strategic flexibility in litigation, while defendants may subsequently pursue recourse actions against other liable parties.
86 The reason for this being to prevent the consumer from the inconvenience of attempting to pursue a claim against a foreign producer
The importer’s liability does not extinguish the responsibility of the foreign manufacturer, as both parties remain jointly and severally liable to the victim under the relevant product liability laws within the member states.
88 http://legal-dictionary.thefreedictionary.com/Jointly+and+severally+liable 04/08/2013 17.55
Some issues on product liability in tort in Vietnamese law
2.2.1 Overview of product liability in tort in Vietnamese Law
Product liability is a relatively new concept in Vietnam, and the legal framework governing it is not consolidated under a dedicated law Instead, Vietnam’s approach to product liability is integrated across multiple legal sources Currently, there are no specific regulations or statutes solely dedicated to product liability; instead, relevant provisions are embedded within the Law on Protection of Consumers’ Rights.
Since 2010, Vietnam has reinforced its legal framework on product liability, building upon the 2005 Civil Code and pertinent laws on product quality Vietnamese legislators have clearly regulated producers' liability to ensure accountability for their products As a result, the product liability institution has steadily developed in Vietnam, enhancing its effectiveness in protecting consumers' rights and safety.
Legal instruments governing issues relevant to product liability in Vietnam under the area of tort:
The Vietnamese Civil Code 2005, encompassing Articles 604 to 630, provides comprehensive provisions on tort liability, establishing the legal framework for addressing civil damages These articles, along with their guiding regulations, serve as the primary legal reference for resolving disputes related to personal injury, property damage, and other civil liabilities As the foundational civil law, the Civil Code systematically regulates the most common issues concerning torts, ensuring clarity and consistency in legal obligations and rights within Vietnam's jurisdiction.
The Law on Products and Goods Quality 2007 and its guiding regulations establish the primary legal framework for ensuring product safety and quality in Vietnam As the first law specifically regulating the liability of individuals and business organizations operating within Vietnamese territory, it emphasizes accountability in the supply and distribution of goods This legislation aims to enhance consumer protection, promote product standards, and ensure compliance across various industries in Vietnam.
2007 doesn’t present directly the definition of “product liability”, provisions of producer’s liability had already shown the basic factors of product liability
- The Law on Protection of Consumers’ Rights 2010 and its guiding regulations 126 This Law on Protection of Consumers’ Rights is a great achievement in developing and
This institution oversees key legal provisions related to damage and liability, including grounds for liability for damage (Art 604), principles for damage compensation (Art 605), and the capacity of individuals to compensate for damages (Art 606) It also addresses limitations on initiating lawsuits to demand damages (Art 607), and specific types of damages such as those caused by infringement upon property (Art 608), health (Art 609), life (Art 610), and honor, dignity, or prestige (Art 611) Furthermore, the regulation covers the duration of enjoyment of compensation for damages caused by infringement on life or health (Art 612), as well as compensation procedures in various specific cases outlined from Art 613 onward.
125 Resolution No 03/2006/NQ-HĐTP of the Supreme Court’s Committee of Judges on 08 July 2006 guiding on the application of some regulations of the Civil Code 2005 on Tort
126 Decree 99/2011/ND-CP Detailing and Guiding a number of articles of the Law on Protection of Consumer Rights
37 amending Vietnamese legal system in general and laws on protecting consumers in particular
Relevant legal documents, including the Commercial Law 2005, Competition Law 2005, Law on Standards and Technical Regulations 2006, and Laws on Sanction of Administrative Violations, govern the responsibilities of producers and traders in ensuring product safety for consumers These laws establish clear liability for any violations, requiring offenders to compensate for damages or face administrative or criminal sanctions, thereby promoting compliance and consumer protection.
Product liability remains a relatively new issue within the Vietnamese legal system, lacking specific regulations on this matter Customer rights violations by product providers are quite common, yet Vietnam's current laws do not sufficiently address product liability, resulting in limited legal mechanisms to hold producers accountable Therefore, researching Vietnamese legal provisions related to product liability is crucial for developing comprehensive laws in this area and enhancing consumer protection.
2.2.2 Product liability in the recent regulations of law
The Law on Protection of Consumers’ Rights 2010 marks a significant milestone in Vietnam's legislative efforts to enhance consumer protection A key highlight of this law is the introduction of provisions addressing product liability, including the implementation of strict liability standards While the law does not provide a specific legal definition of product liability, it emphasizes the importance of holding producers accountable for defective or unsafe products to better safeguard consumers’ rights.
In 2010, Vietnam's legal provisions were updated to overcome previous limitations, notably removing the requirement to prove fault in product liability cases The shift to strict liability, which is widely adopted internationally, means that consumers no longer need to demonstrate negligence when claiming damages from defective products This reform aligns Vietnam with global standards in consumer protection, making it easier for victims to seek compensation while encouraging producers to prioritize product safety By implementing strict liability laws, Vietnam enhances consumer protection, reduces the burden of proof on injured parties, and incentivizes manufacturers to ensure the safety of their products, fostering a fairer marketplace.
2.2.2.1 Principle and purpose of product liability provisions a The principle of product liability under the law of tort in Vietnam
The principle may be presented through the following provisions:
According to Article 630 of the VCC 2005, individuals, legal entities, or other entities involved in manufacturing or distributing goods are legally responsible for damages if they fail to ensure the quality standards of their products This legal provision emphasizes that any damages caused to consumers due to the sale of substandard goods can result in liability for the responsible parties Ensuring product quality is crucial to prevent consumer harm and avoid legal consequences under the VCC 2005.
Chapter V (Part 2) of the LPGQ outlines comprehensive compensation principles related to product and goods quality, including guidelines on damages payment, types of damages resulting from product quality failures, and the compensatory liabilities of manufacturers, importers, and sellers It also details defenses available in compensation claims, ensuring clarity on liability and legal protections These provisions aim to protect consumers and ensure accountability within the supply chain, reinforcing the importance of maintaining high product quality standards.
The Law on Protection of Consumers’ Rights 2010 establishes the rights and responsibilities of consumers, while outlining the liabilities of organizations, businesses, and individuals involved in goods and services It also details the responsibilities of social organizations in actively participating in consumer protection efforts and provides mechanisms for settling disputes between consumers and businesses Additionally, the law emphasizes the government's role in managing and overseeing the protection of consumers’ rights Furthermore, the law addresses the purpose of product liability under the law of tort in Vietnam, aiming to hold producers accountable for defective products and ensure consumer safety.
Most codes and United Nations guidelines focus on safeguarding consumers from unfair practices by large corporations that hold significant informational advantages These protections aim to promote fairness in consumer-business relationships and prevent exploitation by entities with unequal power Ensuring transparency and equitable treatment for consumers is at the core of these standards, fostering trust and accountability in markets worldwide.
Beside, provisions of product liability also protect fair competition on the market, which help improve the business operating of the corporations 127
2.2.2.2 Subject that take legal responsibility
Under Clause 2, Article 23 of the Laws on Protection of Consumers’ Rights, the compensating organization includes entities involved in trading goods, such as producers, importers, and those labeling products Specifically, it covers: a) organizations and individuals manufacturing the products; b) organizations and individuals importing the products; and c) organizations or individuals that apply commercial names, labels, or instructions to identify their products.
127 http://www.luatviet.org/Home/phap-luat-va-cuoc-song/2010/9126/Can-quy-dinh-mot-cach-toan-dien-ve-che- dinh-trach-nhiem.aspx, 03/08/2013 15.25
39 producing, importing products; d) Organization, individual providing defective products directly to consumer in case it is impossible to determine the right organization, individual to compensate for damage
Under the LPGQ, the liability for damages is imposed on producers, importers, sellers when they do not ensure the quality of their products, causing damage to buyers or consumers 128
According to Article 61 of the LPGQ, producers and importers are liable for damages if their products' quality is compromised due to their fault, resulting in harm to buyers or consumers Additionally, sellers are also responsible for damages when their negligence leads to the poor quality of products, causing injury or loss to buyers or consumers This emphasizes the legal accountability of both producers, importers, and sellers in ensuring product quality and consumer safety.
Compensation shall be paid according to agreements between involved parties or court decisions or arbitral awards 131