Overview of product liability and product liability defences

If you supply products to consumers you need to make sure they are safe. The main responsibility for ensuring this safety lies with the product’s manufacturers but if your business supplies products to consumers in some way you also have legal responsibilities.

Not all products can be completely safe, of course – a knife is always going to have sharp edges – but you have a duty to ensure the products you supply are as safe as is reasonable to expect. Using the knife as an example: you won’t be generally responsible if there is nothing wrong with it and someone cuts themselves on the sharp edge during ordinary use, but if the handle on their new knife is faulty and falls off and this causes someone to cut themselves, you could be held responsible.

If you don’t fulfil your duties you can face prosecution resulting in a fine or prison. Anyone who was injured by your unsafe product – even if you sold the product to someone else – can take a civil action against you if they have been injured or have suffered damage to personal property.

Liability for unsafe products is strict: you can't avoid liability by warning people the product isn't safe and there is no need for the injured party to prove negligence on your part. They just need to prove the product was defective and the defect in the product caused the injury. 

Safety measures 

Manufacturers

Manufacturers should ensure that systems are in place to ensure a product’s safety at every stage of the production process. They should abide by any specific regulations covering their product (e.g. such as for fireworks, food and medicines), and meet any safety standards that apply to their product. A formal quality assurance scheme with regular safety testing should be considered.

Manufacturers also have a duty to warn about potential risks and ensure consumers have information to help them understand the risks, e.g., any safety precautions that need to be taken. The safety of products should be regularly monitored, with complaints registered and thoroughly investigated. Producers also need to inform the Trading Standards Department or any other relevant authority about unsafe products.

Distributors

Distributors, such as retail outlets, are not normally liable for harm to consumers or their property resulting from an unsafe product as long as they can identify the producer. However, if you supply a faulty product you may be liable if:

• The name of your business is on the product.
• You customise or service a product or do anything to it which might affect its safety.
• You imported it from outside the European Union.
• You can’t clearly identify the manufacturer or the manufacturer has gone out of business.

Distributors do have some responsibility for safety. You must:

• Not sell any product which you know, or should know, is unsafe. Make regular checks on the Trading Standards Institute’s website (www.tradingstandards.gov.uk/advice/advice-recall-list.cfm) to check for any recent product recall notices.
• Pass on to customers any safety information provided by the producer.
• Thoroughly investigate safety complaints from customers, and inform the manufacturer.
• Work with producers and others if product liability issues arise, for example, a product is recalled because it is unsafe.
• Assist in product safety monitoring - e.g. by investigating complaints and passing information on to the producer.
• Co-operate with any investigation carried out by Trading Standards officers in local councils who are responsible for enforcing product liability laws.
• Notify the Trading Standards Department or any other relevant authority about unsafe products.

Protecting yourself from legal action

• Invest in product liability insurance to cover damages and legal costs. Most businesses have cover of between £1m and £5m. The norm is £2m.
• Ensure there is a clause in your contract with a supplier which indemnifies you against any claim for damages caused by their products.
• Maintain adequate records. Injured parties can begin their court case up to three years from the date of the injury and in some cases, can even sue up to 10 years after the product was sold. Keep all relevant documentation to allow the origin of unsafe products to be traced.
• As soon as you receive a complaint inform your supplier and find any relevant documentation.
• If the promise of replacement, refund for or repair of the product does not appease the complainant (unlikely if they have been injured by the product), seek advice from a solicitor. Your trade association may also help with information about standards and best practice in your industry.

Defending a product liability claim

A court hearing a product liability claim will consider factors such as the way a product is marketed; any instructions or warnings on or with the goods; what might reasonably be expected to be done with the goods; and the time the producer supplied the product.

If someone sues you under product liability laws you need to prove one of six defences:

1. You did not supply the product.
2. You could not reasonably be expected to discover the safety defect – e.g. scientific knowledge was not advanced enough to identify the risk when the product was sold.
3. Complying with the law made the defect an inevitable result.
4. The defect was caused after you supplied the product.
5. You are a component manufacturer and the defect was due to the design of the finished product or defective specifications given to you.
6. You didn't supply the product in the course of business (the law doesn’t cover private gifts).