Chambers UK: Product Liability & Safety 2021 - Law and Practice

There are three main causes of action typically employed by claimants pursuing product liability claims in the UK. There are certain strategic advantages offered by each suit which might make them preferable to certain claimants in certain circumstances; however, often claimants elect to pursue more than one of the causes of action in parallel, in respect of the same facts, to increase the likelihood of success and overcome some of the limitations of certain causes of action.

"Strict liability" statutory regime under the Consumer Protection Act 1987 (CPA)

The CPA creates a no-fault liability scheme in respect of defective products which have caused personal injury or damage to private property.

Under the regime, the following entities have joint and several liability:

• The manufacturer of the product, or an entity that holds himself out as the same by having the product designed/manufactured on its behalf and markets the product under this trade mark/name.
• The importer of the product into the UK (post-Brexit there are significant changes to liability exposure and responsibility under product safety regulations in respect of former distributors within the UK now being considered importers post-Brexit).
• The distributor/supplier, in rare circumstances where the above-listed entities cannot be identified by the distributor within a reasonable timeframe when that information is requested or a claim is made against the supplier/distributor.
  
  

The following three key elements of the cause of action must be established by the claimant.

Defect

Section 3 of the CPA establishes there is a defect in the product "if the safety of the product is not such as persons generally are entitled to expect". The court will take into account all of the circumstances when assessing the safety of the product, including:

• Product marketing
• Date of supply
• Any safety mark
• Warnings
• What might reasonably be expected to be done with the product, and
• The time when the product was supplied by its producer to another.

The landmark case of Colin Gee & Others v DePuy International Limited [2018]  (Gee) provides the following guidance on the application of this statutory test:

• The test is objective (what persons generally are entitled to expect) and not subjective (what the individual claimant expected).
• Hindsight is not relevant in determining entitled expectation, entitled expectation must be assessed as at the date of supply of the product.
• A court can take into account all the circumstances it considers factually and legally relevant to the evaluation of safety, on a case by case basis.
  
  

Damage

Generally, death, personal injury or any property loss (property for private use, occupation or consumptions) are damages for which claimants can seek compensation under the CPA.

Damage to the product is excluded from the scope of recoverable heads of damage. There is also a minimum monetary value of £275 that the property damage suffered must exceed in order to be entitled to pursue a claim under the CPA.

Causal link

There must be a causal link between the product defect and the damage/injury sustained. The traditional English law tests for causation apply to product liability cases.

Tortious liability – negligence

Manufacturers or other actors in the supply chain (mostly where a manufacturer cannot be identified) can be liable in common law negligence in respect of a defective product.

To bring a successful claim in negligence, a claimant must prove, on the balance of probabilities, that:

• The defendant owed the claimant a duty of care
• The defendant breached that duty of care
• The breach caused the claimant’s loss or damage, and
• The loss was reasonably foreseeable.
  
  

The key distinguishing feature of such actions is that the claimant must establish fault on the part of the defendant. For this reason, this claim is generally considered to be more difficult to bring than that under the no fault mechanism of the CPA.

Breach of contract – express or implied statutory term

Consumers that are party to a contract with a seller or supplier of products can pursue a breach of contract claim if a product supplied is defective or otherwise fails to conform to the contract of sale.

The seller may be exposed in respect of breach of either express terms, or those implied by the Consumer Rights Act 2015 (CRA) in respect of (i) the fitness for purpose of the product, (ii) it being as described, (iii) it being of satisfactory quality.

To bring a claim in contract, a claimant must prove, on the balance of probabilities, the following.

• A contract is in place, i.e.:
  • There is a mutual intention to create a contract
  • An offer has been made
  • That offer has been accepted, and
  • There has been "consideration" (value) exchanged between the parties.
• The contract has been breached.
• The breach of contract has led to loss.

There are different requirements to bring the three causes of action mentioned in 2.1 Product Liability Causes of Action and Sources of Law in relation to product liability claims in the UK, as follows.

CPA

Consumers (“any person who purchases or uses the product in question for private use”) have legal standing to bring product liability claims. Persons who purchase or use goods for the purpose of resale or commercial use are expressly excluded from the definition of consumers. In order to have a right of action under the CPA, the consumer must have suffered damage of a kind covered by Part 1 of the CPA.

Negligence

Any person to whom a duty of care is owed can bring a negligence claim in circumstances where that duty is breached and they sustain a reasonably foreseeable loss or damage caused by a defective product.

A claimant need not know the defendant in order to bring a successful claim in negligence. A claim may be brought by a consumer/purchaser of the product, a person who uses the product, or a third-party bystander who is injured by the product.

Contract

Generally, because of the doctrine of "privity of contract", only the parties to a contract can enforce the terms of that contract. However, a third party may, in certain circumstances, seek enforcement under the Contract (Rights of Third Parties) Act 1999, unless these rights have been expressly excluded.

There are strict time limits for bringing civil claims, including product liability claims, in England and Wales.

Negligence and contract

Under The Limitation Act 1980, claims involving personal injury must be brought within three years from the date that the damage occurred or from the date that the claimant knew, or reasonably ought to have known, that they had a cause of action (“the date of knowledge”). Knowledge can be acquired from the date that the claimant knew the identity of the defendant or realised the significance of their injury.

For non-personal injury claims, the claim must be brought within six years from the date on which the damage or loss occurred, or three years from the date of knowledge for claims concerning latent damage. The three-year limitation period can be extended at the court’s discretion.

CPA

Working in tandem with the above-mentioned time limits, the CPA contains a ten-year long-stop provision, allowing claims under it to be brought within ten years from the date on which the product was put into circulation. Absent issuing of court proceedings within that timeframe, rights under the CPA are extinguished and cannot be extended by the court.

Prior to Brexit the jurisdiction of UK courts, as opposed to other EU member state courts, was determined by the operation of EU-level laws. Post-Brexit the situation is as below.

CPA

Generally, UK courts, as with other European-based courts, will assume jurisdiction to try a case where either the injury, loss or damage occurs, or where both parties are domiciled, in that country.

Prior to the UK leaving the EU, where a defendant was domiciled in England, the English court had jurisdiction and could not decline jurisdiction pursuant to Owusu v Jackson (Case C-281/02) [2005]. Now that the UK has left the EU, this no longer applies and UK-domiciled defendants are able to challenge the English court’s jurisdiction on grounds of it not being the appropriate forum.

Negligence

In order to invoke jurisdiction of English courts in respect of negligence claims, it is sufficient for a defendant to be physically present in England and Wales to enable the claimant to serve proceedings on that defendant.

Contract

Contractual terms agreed by both parties ordinary determine the applicable law, jurisdiction and location of proceedings in respect of contractual breaches.

There are mandatory pre-action protocols applicable in respect of product liability claims, under the Civil Procedure Rules Practice Direction on Pre-Action Conduct and Protocols, that must be complied with prior to commencement of formal claims.

The following Pre-Action Protocols may typically be applicable to product liability claims:

• The Pre-Action Protocol for Personal Injury (Employers’ Liability and Public Liability) Claims, and
• The Pre-Action Protocol for Low Value Personal Injury (Employers’ Liability and Public Liability) Claims.
  
  

The above-mentioned Pre-Action Protocols ordinarily dictate the following pre-action procedural steps:

• Exchanges of correspondence, including for example a brief outline of each party’s case either in the form of letter or prescribed form, and
• Exchange of evidence in some circumstances, including, for example, high-level medical evidence in respect of personal injury claims.

Breach of these protocols can have a substantive impact on the ability to commence formal proceedings and/or can have negative costs consequences for the defaulting party, with the court potentially taking the following actions:

• Require explanation for any breach or variation of protocols, particularly in circumstances where both parties have departed from their prescriptive requirements
• Award costs, taking into account any breaches or defaults under the protocols
• Apply sanctions against the offending party, and
• Stay proceedings entirely until there is pre-action compliance.

There are broad document preservation obligations imposed on parties to proceedings, including product liability matters, in England and Wales. These rules work in tandem with rules regarding document disclosure. Please refer to 2.7 Rules for Disclosure of Documents in Product Liability Cases for further detail.

Under Civil Procedure Rules (CPR) Practice Direction 31B (paragraph 7), once litigation is contemplated, parties must ensure that all potentially disclosable documents (including any relevant products, devices, design files, testing information, etc) are preserved. Please refer to 2.7 Rules for Disclosure of Documents in Product Liability Cases for further detail.

Under this provision, past, present and future documents must be preserved.

Failure to comply with these requirements, including by interfering with evidence by deleting, overwriting, updating or destroying documents, has far-reaching consequences, including the following measures which the courts can and do impose:

• Penalties for interference with evidence
• Satellite litigation regarding affected documents
• Costs sanctions
• Strike out a party’s particulars of claim or defence, and
• The drawing of adverse inferences as to the contents of those documents (Earles v Barclays Bank Plc [2009]) – it is likely that the court will order a party to provide an explanation as to why the documents have not been preserved before drawing adverse inferences or making further orders.

There are far-reaching disclosure requirements in respect of product liability cases in the UK.

CPR Part 31 sets out the parties’ responsibilities. Generally, as part of "Standard disclosure", parties to an action are required to disclose those documents which:

• Are or have been in their control, and
• Documents on which they rely, or
• Documents that may adversely affect their own or another party’s case, or
• Those which support another party’s case (standard disclosure).
  
  

The court, in its discretion, may limit or dispose of the above requirements (CPR 31.5). CPR 31 does not apply to claims entering the small claims track (see 2.10 Courts in Which Product Liability Claims Are Brought). However, a court will ordinarily order standard disclosure, requiring each party to file and serve on the court and all parties copies of all documents upon which they intend to rely.

Parties are required to conduct a reasonable and proportionate search for the above-mentioned disclosable documents. Disclosure obligations are ongoing – ie, requiring continual disclosure until cessation of the matter, including in respect of documents created during the proceedings.

Electronic document disclosure

Given the prevalence of electronic documents and sources in modern litigation, specific rules apply to electronic documents. An electronic document is defined as any document held in electronic form (eg, emails, text messages, voicemails, word processed documents, social media messages and databases). CPR 31, Practice Direction 31A and 31B set out rules of disclosure of electronic documents in multi-track claims (though a court can apply these rules to small or fast track claims also), and relevantly, provide, amongst other things, for the following.

A party requesting the specific disclosure of electronic documents ,which are not reasonably accessible, must demonstrate the relevance of those documents in order to justify the costs and burden of retrieving them.

The parties must advise the court before the first scheduled case management conference (CMC) if an agreement has been reached concerning electronic disclosure. If an agreement has not been reached before the first scheduled CMC, the parties will be required to identify issues to put before the court for directions. It may be considered reasonable for a party to search for relevant documents using "key word searches" if a full review of every document would be considered unreasonable or disproportionate in terms of costs and review time involved.

There are prescriptive requirements for expert evidence in respect of product liability claims in England and Wales courts, as set out in the following CPR provisions:

• Annex C of the CPR Practice Direction on Pre-Action Conduct, outlining the general procedure for use of expert evidence
• CPR Part 35 sets out the control and use of experts in proceedings
• Practice Direction 35
• The Protocol for the Instructions of Experts to give Evidence in Civil Claims, and
• Part 7 of the Pre-Action Protocol for Personal Injury Claims (where applicable).

Generally, the above provisions provide that parties’ use of experts is limited:

• To circumstances where such evidence is reasonably required to resolve the proceedings, and/or
• To those cases where the court grants express permission

Other requirements include the following:

• Form:
  • Expert evidence generally must be in written form (written report) unless the court directs otherwise
  • With the court’s permission only, in certain circumstances parties can put forward written questions to the experts, including to other parties’ experts, and
  • Oral evidence can be relied upon, but subject to permission from the court (CPR 35.4).
• Expert duties:
  • Expert witnesses are impartial in their analysis and must acknowledge their duty to act independently when preparing their own expert report, with their overriding duty being owed to the court and not the party instructing or paying them, and
  • Experts must verify their report by including a statement of truth, CPR Practice Direction 35 paragraph 3.3 sets out the recommended template for statements of truth for experts to include in their reports.

In respect of each cause of action in respect of product liability claims, the claimant bears the onus of proof. The standard of proof required, in respect of each discrete action, is to prove the case against the defendant on the balance of probabilities (civil standard).

Courts in which product liability cases are brought

The forum in which a product liability is heard is dictated by the value and/or complexity of the claim. Claims all commence, in the first instance, in either the High or County Court. Thereafter, courts allocate these defended claims to one of three procedural tracks, at an early stage:

• Small claims track – claims with a value of no more than £10,000 or where personal injury damages is valued up to £1,000 only
• Fast track – claims with a value over the small claims track limit, but with a value less than £25,000, and
• Multi-track claims – claims valued over £25,000.

Multi-track claims can be heard at either the High Court or County Court. Claims with a value less than £50,000 which are commenced in the High Court are generally transferred to a County Court unless there is a specific reason for them to be heard at the High Court (for example, where the case concerns particularly difficult questions of law or cases which might attract significant public interest).

In general, in the first instance, product liability cases are heard by a single judge who will generally be alive to the potential complexity of such claims and will allow evidence from a range of expert disciplines and lay witnesses where required. On appeal in the Court of Appeal or Supreme Court, cases may be heard by three or five judges. Jury trials do not take place in civil product liability cases.

Damages available

There is no upper threshold for the award of damages in product liability cases generally.

Claimants that succeed with an action in negligence are entitled to an award of damages, the aim of which is generally to place that claimant in the position they would have been had the negligence not occurred.

Appeals in respect of product liability claims follow the general rules applicable to appeals for all civil claims in England and Wales. These rules are as follows.

• Standing – the court’s permission must be obtained before an appeal can be lodged by way of an application.
• Time limits – a party ordinarily has only 21 days following a judgment to make a request for an appeal against a County Court or High Court decision.
• Application for permission to appeal – the courts only grant such permission in circumstances where the appeal appears to have a real prospect of success or there are other compelling reasons why it should be heard; the application process is usually "on the papers" (rather than by way of oral hearing) only, unless the court deems the application exceptionally requires an oral hearing.
• Scope of appeal – an appeal is usually limited to a review of the lower court’s decision; however, the court can apply its discretion to order a re-hearing if the interests of justice would be served by doing so.
• Grounds for an appeal – an appeal will be allowed where the decision of the lower court was wrong (for example, where the court made an error of law, or of fact, or in the exercise of its discretion) or if the decision was unjust because of a serious procedural or other irregularity of the lower court; in practice, the courts rarely interfere with findings of fact made by lower courts, on the basis the judgments were made with the benefit of hearing witness and expert evidence first-hand.
• Effect of appeal decision – an appeal court may affirm, vary or set aside any order or judgment made by the lower court, order a new trial or hearing or make any other appropriate order.
• Forum of appeal – the Court of Appeal hears appeals against decisions made in a County Court or in the High Court and are heard at the Royal Courts of Justice in London; the Supreme Court in London is the final appellate court, which hears appeals on issues of general public importance.

The nature of defences available depends on the cause of action pursued.

CPA

Given the statutory nature of the CPA, defences available are limited to those provided under the legislation, as follows:

• The defect is attributable to compliance with any requirement of UK or retained EU law post-Brexit
• The defendant did not at any time supply the product
• The product was not supplied in the course of the defendant’s business or with a view to profit
• The defect did not exist in the product at the time of supply
• The state of scientific and technical knowledge at the time the product was put into circulation was not such that a producer of products of the same description as the product in question might be expected to have discovered the defect if it had existed in their products while they were under their control (known as “state of the art” or “development risks” defence), and
• The defect was not in the component supplied but in the finished product in total, for which the defendant should not be responsible.

Negligence

In practice, negligence claims are most often defended on the basis that the requisite elements of the cause of action have not been established. For example, there was no duty of care owed, there was no breach of said duty and/or there was insufficient evidence to establish causation.

Other common defences to claims in negligence are as follows.

• Contributory negligence – a claimant contributed, at least to some extent, to their damage and/or injury; the liability of the defendant is reduced by the contribution of the claimant.
• Voluntary assumption of risk – the claimant consented to the risk which resulted in injury/loss.
• Establishing that the injury was caused by the claimant’s participation in a criminal enterprise.

Contract

Again, contractual claims are often defended in practice on the basis that not all elements of the claim are made out. For example, there was no contract in place or the contractual terms did not include the term allegedly breached.

Otherwise, the following defences may be available in contract claims:

• The breach of contract was waived and the claimant did not act on the breach within a reasonable time (or at all)
• The contract terms were varied, and
• Promissory estoppel.

Under the CPA, it is a statutory defence to allege that the fact of compliance with mandatory regulatory standards introduced a product defect (see 2.12 Defences to Product Liability Claims).

Furthermore, whilst the area is still considered an area of development for judicial consideration, it is generally accepted that whilst compliance or lack thereof with regulatory obligations is a persuasive factor in determining whether or not a product is defective, it is by no means decisive.

Wilkes v DePuy International Limited [2016] made it clear that compliance with appropriate mandatory regulatory standards and/or the grant of regulatory approval are appropriate circumstances to take into account under the CPA statutory test for whether a product is defective. It was said by the court that whilst these factors are not complete defences to a claim under the CPA, they would be “powerful evidence” to indicate that the level of safety contemplated by the CPA had been reached, and that against that backdrop “it may be challenging” for the claimant to make out a case that a higher level was expected. Compliance with the manufacturer’s own specification and standards could also be persuasive on the same basis.

The link between regulatory decisions and/or approvals is important to other product-related matters and is further illustrated in the case of Volkswagen Emissions Litigation [2020]. In that matter the English High Court held it was bound under EU law (pre-Brexit) by the German type-approval authority’s finding that certain vehicles contained a “defeat device”, and the defendants’ attempt to re-litigate that decision was an abuse of process.

Non-adherence to regulatory requirements is a separate cause of action, which can attract criminal liability. Please refer to 1.5 Penalties for Breach of Product Safety Obligations.

The general principle for payment of costs in English law applies to product liability cases: the losing party pays the costs of the successful party (including fees, court fees and disbursements including expert fees).

The court can award costs on two bases.

• Standard basis, under CPR 44.3(2) – the court will only award costs that are considered to be both reasonably and necessarily incurred by the party seeking recovery; any costs considered to be disproportionate may be disallowed or reduced.
• Indemnity basis, under CPR 44.3(1)(b)) – where the court orders costs to be assessed on an indemnity basis, costs need not be incurred by necessity and there is no requirement for costs to be proportionate to the issue in dispute; essentially, a party who has an indemnity costs order made in their favour is more likely to recover a sum which reflects the actual costs incurred in the proceedings.

In product liability claims involving damages for personal injury or death, the regime of qualified one-way costs shifting (QOCS) applies. In practice, this means that in most claims where a claimant is unsuccessful, the claimant will not be responsible for the defendant’s costs. However, the QOCS provisions may not apply if the claim is struck out, or if the court determines that the claimant was fundamentally dishonest. If the claimant’s claim is successful, they may recover their costs from the defendant, subject to a "set-off" of any (interlocutory) costs orders made in the defendant’s favour.

Costs are subject to a formal assessment procedure if they are not or cannot be agreed between the parties.

The court has a wide discretion to vary any of the above general positions regarding costs, however.

As with all civil claims in England and Wales, there are many litigation funding options regularly used by product liability claimants to fund their litigation. The following are common mechanisms used in product liability cases:

• Conditional fee agreements (CFAs) – whereby legal fees of legal representatives are contingent upon a certain event taking place (usually the client "winning" the case), and
• Damages based agreements (DBAs) – whereby the lawyer’s fees are contingent on success in the case, determined as a percentage of the compensation received by the successful party.
  
  

Lawyers can charge success fees, and third-party funding is permissible.

Notably, for the above agreements entered into after 1 April 2013, successful claimants can no longer recover success fees, after the event (ATE) premiums or other arrangement costs from the defendant.

Several mechanisms, both informal and formal, exist in respect of group actions in England and Wales, as set out below.

Formal mechanisms

Group litigation orders

A group litigation order (GLO), under CPR 19 Section III, allows the management of multiple claims which give rise to common or similar issues of fact or law. Claimants to these actions must “opt in”. In the process of GLO proceedings, there will be a trial of issues that are common to all underlying claims. Lead cases that are considered the most appropriate can be chosen and they are used to allow the parties to put common issues into context. Decisions made in respect of these lead cases are binding on all parties to the GLO. This is the most commonly used formal mechanism in respect of product liability claims.

Representative actions

Representative actions, under CPR 19 Section II, can be brought by one or more claimants (the Qualified Representative Entity) on behalf of a group considered to have the “same interest”. The appeal decision in Lloyd v Google LLC [2019] determined that the “same interest” meant, in practice, those who were victims of the same alleged wrong and had sustained the same damage where the defendant was unable to raise a defence specifically responding to a claim by one represented claimant that did not equally apply to all others in the group. Accordingly, a group would not be considered to have the “same interest” if defences were applicable in some individual claimant claims but not to others. The matter has been appealed to the Supreme Court and was heard in April 2021. The Supreme Court’s decision is eagerly anticipated. These actions operate on an "opt-out" basis, such that all group members will be automatically included in the group and represented in the action, and a judgment will be binding on all those represented unless they expressly state they wish to be excluded. Such actions are rare, although there are signs they may become more widely used.

Informal mechanisms

The courts can also manage group litigation informally, including by hearing one or more representative test cases at trial while staying remaining cases. The test case decision is not binding on parties to the other claims; however, the decision is intended to determine common issues relevant to the subsequent cases to assist parties to resolve remaining claims without further litigation.

Product liability cases do not commonly reach trial in England and Wales. Such claims that do reach trial, are often in respect of medical devices or pharmaceutical products rather than general consumer products.

There is a small body of cases that have assisted in interpreting statutory tests under the no-fault mechanism of the CPA. Of these, the Gee judgment remains the seminal decision in product liability. That case related to metal-on-metal hips group litigation in England in Wales. The court found in favour of the defendant manufacturer in concluding that the claimant’s argument that the products had a “tendency” to cause soft tissue reactions (adverse reaction to metal debris (ARMD)) was “untenable” on the basis it would render all similar hip prostheses defective and is “directly contrary to the spirit and objectives” of the CPA. Based on a lack of evidence, even though the court accepted the approach, the court also rejected the claimant’s alternative argument that the products had “an abnormal potential for damage”.

Gee adopted much of the reasoning of an earlier seminal product liability case, Wilkes v DePuy International Limited [2016], but departed from A v National Blood Authority [2001], a somewhat controversial case which previously provided guidance on how to approach product liability cases. The Wilkes method of “abnormal potential for damage” was considered favourably, but no finding was made on the basis of that test due to a lack of claimant evidence. In doing so, the A v NBA approach, of first identifying “the harmful characteristic which caused the injury” was discredited.

The court in Gee:

• Recognised the inherent flexibility of the no fault mechanism under the CPA
• Promoted assessing defect under the CPA in a holistic manner, whereby the court is entitled to take into account all relevant factors, including legal and factual circumstances, when evaluating product safety
• Determined that hindsight has no place in the formulation of the "entitled expectation" of safety, the test for defect under the CPA, and
• Found that a known and inherently harmful, or potentially harmful, consequence of the ordinary use of a product did not amount to a defect.

The above position taken in Gee was largely approved in another case involving a metal-on metal hip prosthesis, Hastings v Finsbury Orthopaedics Limited and Stryker UK Limited [2019]. In this Scottish matter the court found for the defendant manufacturer. That finding was recently upheld on appeal ([2021]), but is now subject to further appeal likely to be heard in 2022.