Protection against the „new” risks “adequately solving the problem, peculiar to our age of increasing technicality, of a fair apportionment of the risks inherent in modern technological production” dr R. Strugała WPAiE

Famous product liability lawsuits McDonald’s coffee The Liebeck v. McDonald’s case of 1994 is one of the most prominent unbelievable product liability cases in U.S. history. In this case, Stella Liebeck accidentally poured hot coffee, purchased from McDonald’s, on her lower body and suffered third degree burns on her thighs, groin and buttocks. Liebeck’s lawyers argued that the company served coffee at a temperature of 180 to 190 degrees Fahrenheit while other companies served coffee only at a reasonable 140 degrees. Liebeck was awarded a jury verdict of $2.7 million in punitive damages and $160,000 for medical expenses. dr R. Strugała WPAiE

Famous product liability lawsuits 5. Toyota cars In 2010, Toyota issued a massive recall for many of its cars. A safety feature known as “brake to idle fail safe” was not installed in many cars and, therefore, increased the chances of an accident when the accelerator malfunctioned. The aim of the fail-safe system is to prompt the engine to ignore the gas pedal when the brakes are pressed, greatly reducing the chances of an accident, even when there is a problem with the accelerator. The failure to include this fail- safe mechanism in many Toyota models resulted in one of the biggest litigation cases in recent history, as well as a class action lawsuit. Toyota agreed to pay a whopping $1.1 billion to settle the suit. dr R. Strugała WPAiE

Historical background Before 1985, all EU Member States had their own national laws regarding liability for defective products. These national laws were generally grounded on fault-based contractual or tort liability principles. distorting competition affecting the movement of goods within the common market different degrees of consumer protection against defective products. dr R. Strugała WPAiE

Legal picture Two directives govern the field of product liability and product safety: (i) Council Directive 85/374/EEC of July 25, 1985, on the approximation of the laws, regulations, and administrative provisions of the Member States concerning liability for defective products (the “PLD”); and (ii) Directive 2001/95/EC of the European Parliament and of the Council of December 3, 2001, on general product safety (the “GPSD”). dr R. Strugała WPAiE

Implementation All EU Member States have implemented the PLD through national legislation. A judgment of April 25, 2002, the European Court of Justice (the “ECJ”) ruled that the PLD mandates full harmonization in that “the margin of discretion available to the Member States in order to make provision for product liability is entirely determined by the Directive itself and must be inferred from its wording, purpose and structure.” dr R. Strugała WPAiE

Implementation Article 13 PLD allows Member States to maintain existing schemes of contractual or noncontractual liability or specific liability systems. However, the ECJ emphasized that “Article 13 of the Directive cannot be interpreted as giving the Member States the possibility of maintaining a general system of product liability different from that provided for in the Directive,” but rather “as referring to a specific scheme limited to a given sector of production.  The German Drug Act (1976) dr R. Strugała WPAiE

Who is to sue? Pursuant to Article 1 PLD, the producer shall be liable for damage caused by a defect in its product. A “producer” is defined broadly in Article 3 PLD as: the manufacturer of a finished product or of a component part; the producer of any raw material; any person who, by putting his name, trademark, or other distinguishing feature on a product, presents himself as its producer; any person importing a product into the Community for sale, hire, leasing, or any form of distribution in the course of his business; each supplier of a product if the producer cannot be identified, unless the supplier informs the injured person, within a reasonable time, of the identity of the producer or the particular supplier of the product that injured him or her; and each supplier of an imported product, if the product does not indicate the identity of the importer, even if the name of the producer is indicated. dr R. Strugała WPAiE

Who is to sue? (JOINT LIABILITY) Whenever two or more persons are found liable for the same damage pursuant to the PLD, each person has joint and several liability. The applicable national law will govern any possible rights of contribution or recourse between the jointly and severally liable parties. dr R. Strugała WPAiE

What is the product? The scope of the PLD extends to “all movables even if incorporated into another movable or into an immovable” and electricity. “products of the soil, of stock-farming and of fisheries, excluding products which have undergone initial processing” – initially beyond the scope of implementation (the inclusion was left to the Member States’ discretion).  “mad cow disease” crisis: Directive 1999/34/EC incorporated agricultural products into the field of application of the PLD dr R. Strugała WPAiE

When does the liability arise? To trigger the PLD’s strict liability mechanism, the injured person must demonstrate that the harmful product was defective A product is defective when it does not provide the safety that a person is entitled to expect, taking all circumstances into account, including: the presentation of the product; its reasonably expected use; and the time when the product was put into circulation A product is not defective for the sole reason that a safer product is subsequently designed and sold. dr R. Strugała WPAiE

Burden of proof The PLD established the principle of strict (“no-fault”) liability on producers for damage caused by a defective product The injured person need not demonstrate any fault or negligence by the producer. However, the injured person still bears the burden of proving: (i) The damage; (ii) The defect in the product; and (iii) The causal relationship between the defect and the damage. dr R. Strugała WPAiE

RECOVERABLE DAMAGES Damage caused by death or by personal injuries Damage to, or destruction of, any property other than the defective product itself, with a lower threshold of €500, provided that the property: is ordinarily intended for private use or consumption, and was used by the injured person mainly for his or her private use or consumption. dr R. Strugała WPAiE

RECOVERABLE DAMAGES options for MS The Member States may determine compensation for nonmaterial damage that an injured person may seek. The Member States may decide, at their discretion, to cap a producer’s total liability for damage resulting from deaths or personal injuries caused by identical products with the same defect. However, the cap may not be below €70 million. The PLD forbids a producer from limiting the producer’s liability to an injured person by contract dr R. Strugała WPAiE

Conclusions While the PLD has succeeded in providing a common level of consumer protection and a common basis for producer liability, the PLD appears to have fallen short of achieving fully harmonized product liability laws throughout the EU. Notably, national courts have given differing interpretations to specific provisions of the PLD, and some national legislatures continue to resist the total harmonization sought by the PLD. In practice, product liability claims may appear to be based predominantly on (preexisting) national liability rules rather than on the strict liability provided by the PLD. dr R. Strugała WPAiE

PRODUCT LIABILITY LAW IN FRANCE France has implemented both Council Directive 85/374/EEC of July 25, 1985, on the approximation of the laws, regulations, and administrative provisions of the Member States concerning liability for defective products (the “PLD”) and Directive 2001/95/EC of December 3, 2001, on general product safety (the “GPSD”). French law continues to include several other provisions governing liability for defective products that remain applicable in addition to the PLD principles. dr R. Strugała WPAiE

PRODUCT LIABILITY LAW IN GERMANY Germany has implemented both Directive 85/374/EEC of July 25, 1985, and Directive 2001/95/EC of December 3, Thus, German legislation has the same basis as other European countries regarding product liability. Germany implemented Product Liability Directive 85/374/EEC (the “PLD” or the “Directive”) by passing a special law, the Produkthaftungsgesetz (the “ProdHaftG”), which came into force on January 1, The ProdHaftG mirrors the PLD very closely. The ProdHaftG governs German law, creating rights and duties and making direct recourse to the actual PLD obsolete. The ProdHaftG establishes the principle of strict liability for manufacturers for damage caused by a defective product, with no proof of culpability needed. dr R. Strugała WPAiE