1. GPSD - What Has Changed? Andrew Edgar, Clifford Chance LLP BICCL, 14 February 2005

2. GPSD - What Has Changed · BICCL, 14 February 2005 1 Introduction New provisions in draft Regulations include: “Last resort” compulsory recall Unilateral action by authority for “serious risks” Decision-making on whether a product is “dangerous” by: –The authority –A person appointed by the CIArb before a recall notice is issued –A magistrate, possibly a judge, after a recall notice is appealed –An arbitrator in a claim for compensation by the producer/distributor

3. GPSD - What Has Changed · BICCL, 14 February 2005 2 Recalls for dangerous products Authority may issue a recall notice where it has reasonable grounds for suspecting that a product is a “dangerous product” (defined as “any product other than a safe product”) Further, (Reg. 15(5) criteria): Other action would not suffice to prevent the risks Action by producer/distributor is unsatisfactory/insufficient to prevent the risks At least 7 days notice has been given of intention to serve notice Advice has been sought by the authority (on producer/distributor’s request) from a person appointed by CIArb to determine whether the product is dangerous or a recall notice is proportional to the seriousness of the risk

4. GPSD - What Has Changed · BICCL, 14 February 2005 3 Special provisions for serious risks A serious risk is “any serious risk, including one the effects of which are not immediate, requiring rapid intervention” (Reg. 2) Where the product poses a serious risk (Reg. 15(6)): action taken by producer/distributor is irrelevant no 7 days’ notice of intention to serve recall notice is given no referral to determine whether the product is dangerous and recall proportional

5. GPSD - What Has Changed · BICCL, 14 February 2005 4 Special provisions for serious risks (2) Authority, when enforcing through a safety notice, must act in a manner proportional to the seriousness of the risk + take account of the precautionary principle but … it may take any action under the Regulations urgently and without encouraging voluntary action (Reg. 10(4))

6. GPSD - What Has Changed · BICCL, 14 February 2005 5 Appeals Right of appeal to Magistrates’ Court to vary or set aside notice within 21 days (Reg. 17(1)) Order will be granted if: The product is not dangerous Reg. 15(5) (criteria for recall notice) has not been complied with; and Serving of the notice was not proportional to the seriousness of the risk Right of appeal to suspend recall notice pending appeal within 7 days of notice (Reg. 17(5)) Authority may appeal any order to suspend Magistrates’ Court Crown Court

7. GPSD - What Has Changed · BICCL, 14 February 2005 6 Right to compensation Authority liable to pay compensation to the person on whom a recall notice has been served in respect of “any loss or damage” if (Reg. 16(6)): The product was not a dangerous product; and The exercise of the power is not attributable to any neglect or default by that person Compensation to be determined by arbitration (Reg. 16(7)) Impact on authority’s decision to order a recall? Limits on compensation: loss or damage incurred only in UK as a consequence of authority’s decision where recall in other EU MS following RAPEX procedure?

8. GPSD - What Has Changed · BICCL, 14 February 2005 7 Recalls in practice? Initial decision by authority can be challenged before and after a recall is issued … but in public? Scope for different assessments of risk? How likely is authority to: Issue a recall notice Take unilateral action in cases of perceived urgency?

9. Clifford Chance, 10 Upper Bank Street, Canary Wharf, London, E14 5JJ, UK © Clifford Chance LLP 2004 Clifford Chance Limited Liability Partnership www.cliffordchance.com GPSD - What Has Changed? UK/208961