UK: Double Trouble: Supplying Dangerous Products Can Give Rise To Both Criminal And Civil Liability

Last Updated: 13 March 2008
Article by John D. Colahan and Mark Clarke

Businesses which fail to comply with the General Product Safety Directive face an increased risk of both criminal and civil liability. This article provides an overview of businesses' obligations under the General Product Safety Directive and considers some of the product liability implications of failing to comply with the safety standards that it imposes.

The Regime

The General Product Safety Directive (2001/95/EC) (the GPSD) has been implemented by each of the Member States of the European Union (EU). The GPSD introduced a new safety regime to the EU and, through the various national implementing measures, has imposed new obligations on producers, suppliers and distributors of consumer products. Certain consumer products, such as toys, cosmetics and electrical appliances, are covered by sectoral Directives. Where a product is subject to specific safety requirements imposed by a sectoral Directive, the GPSD will only apply to the aspects and risks or categories of risks not covered by the sectoral Directive.

The General Safety Requirement

The GPSD provides for a primary obligation for producers and distributors of consumer products to place only safe products on the market. A "safe" product is one which, under normal or reasonably foreseeable conditions of use, does not present any risk to consumers, or only the minimum risks compatible with the product's use. All other products are deemed to be "dangerous" products.

Supporting Obligations

This general safety requirement is supported by various secondary obligations which require producers and distributors of consumer products to share and report information concerning risk, and to take appropriate action to manage such risk, including, if appropriate, recalling the products.

In particular, producers and distributors must immediately notify a competent enforcement authority where a product is known to pose a risk to consumers that is incompatible with the general safety requirement. Such businesses must also immediately inform the competent authority of any action they have taken to prevent risks to consumers.

If a competent authority considers the risk to consumers to be "serious" (i.e., requiring rapid intervention), it is obliged to notify the European Commission (the Commission) with "due dispatch". The Commission will then share this information with other Member States through RAPEX, its Rapid Alert System for dangerous consumer products (including consumer products that are covered by sectoral Directives, but excluding food and medical devices or pharmaceuticals). Sharing the information via RAPEX will discharge any obligation to notify other national authorities in the RAPEX area.

The competent authorities are obliged to promote and encourage voluntary action, but where a competent authority has reasonable grounds for believing that a product is dangerous and the voluntary action taken by a business has not been sufficient to minimise the risk to consumers, it can order the business to take appropriate measures, including, as a last resort, recalling the product (sometimes at very short notice).

Liability Under the GPSD

Failure to comply with the obligations arising under national laws implementing the GPSD can result in significant reputational damage for a business, particularly in the event of a product recall (whether instigated by the business itself or by a competent authority). Further, breaches of the GPSD can give rise to criminal liability under national laws. In England and Wales, the penalty for each offence can be a fine of up to £20,000 and/or up to 12 months of imprisonment. The GPSD does not, however, require Member States to provide for the compensation of consumers who are injured by dangerous products or as a result of other breaches of the GPSD.

Civil Liability

On a European level, civil liability for injury caused by dangerous products is provided for by the Directive on Liability for Defective Products (85/374/EEC) (the Product Liability Directive). The Product Liability Directive provides for a strict liability regime, pursuant to which, even in the absence of fault, a supplier is liable to pay compensation for damage caused by a defective product. Under the Product Liability Directive, a product is "defective" if it does not "provide the safety which a person is entitled to expect". Businesses may be subject to additional civil liability regimes at a national level, for example, in England and Wales, in negligence or for breach of contract or statutory duty.

Whilst the concepts of "dangerousness" and "defectiveness" under the two Directives are different, it is likely that a product which is proven to be "dangerous" under the GPSD would not be considered to provide the safety which a person is entitled to expect and, as such, would also be "defective" under the Product Liability Directive. In such a case, the supplier of the product would be at risk of both criminal prosecution and of civil liability for damages. (It is interesting to note, however, that although a supplier may be able to invoke a complete defence under the Product Liability Directive, such as the "development risk defence", this would not remove its potential criminal liability under the GPSD.)

Similarly, although failure to comply with the supporting obligations provided for by the GPSD will not incur a civil liability for damages, proof of such failure may, and in England and Wales can, be adduced as evidence of a business's negligence or breach of statutory duty.

Further, since the GPSD provides for a number of routes through which producers and distributors of consumer products can or must provide product safety information in writing to enforcement authorities and/or the Commission (both of which can require the production of reports as a compulsory measure), such businesses must be mindful, to the fullest extent possible, about the creation of adverse or sensitive documents in this context. Enforcement authorities are obliged to make such information available to the public and, where an enforcement authority considers there to be a serious risk, it must notify the Commission, which will share the information with the other Member States.

The corollary is that product risk information is now disseminated more quickly and widely than ever before and the greater the availability of information about potentially dangerous or defective products, the greater the risk of civil claims. Added to which, in the event of a civil claim in England and Wales, such information as has been communicated to the enforcement authorities would probably fail to be disclosed in the civil proceedings (and this is likely to include information that has been communicated to the enforcement authorities under cover of "professional secrecy").

Practical Guidance

The GPSD has considerably reduced the discretion of producers and distributors of consumer products with respect to when to issue warnings or share information concerning the risks which such products might present and when corrective measures, including recalls, should be implemented. This reduction in discretion has increased the level of corrective activity and, with it, the risk of civil claims for damages. The best way for businesses to avoid the double exposure to criminal and civil liability is to prevent product safety risks before they occur. This can be most easily effected at the time of procurement, when any product which a business proposes to import and/or supply should be assessed against the relevant regulatory requirements and industry best practice.

In any event, all businesses that produce, import and/or supply consumer products must comply with the safety standards prescribed by both the GPSD and the Product Liability Directive. Together, these Directives impose a significant obligation on such businesses to ensure the safety of consumer products in the EU and failure to do so presents real business risks.

That being so, all such businesses should carefully evaluate their internal systems for quality assurance and the management of risk. In particular, where businesses import products directly from markets with histories of product safety concerns, it is their duty to ensure that such products are safe and the various obligations provided for by the GPSD are complied with. Such businesses should not, therefore, simply rely upon warranties from non- European manufacturers that products have been adequately tested, but must ensure independently that appropriate quality controls are in place and that their products are safe. Moreover, in the light of recent highly publicised disputes along supply chains, it is advisable to review existing contractual documentation to make sure that it has a clear delineation of responsibility for failures of quality assurance, as well as robust dispute resolution provisions.

Accordingly, producers, importers and/or suppliers of consumer products should, as appropriate:

  • document their quality control system and regularly update it;
  • conduct sample testing;
  • investigate, record and follow-up any product related complaints;
  • maintain appropriate warnings and instructions on their products;
  • establish and maintain a document retention policy;
  • establish relationships with relevant trade associations;
  • train personnel on product safety issues; and
  • monitor technological developments relating to product safety.

Additionally, given the speed with which producers and distributors of consumer products are now expected to report risks arising in relation to their products and the corrective they have taken to minimise the risk to consumers, it has never been more important to establish a rapid response system to deal with information concerning risk and implement a crisis management plan to enable swift and thorough product recalls. Whilst these steps may not extinguish the possibility of civil claims, they are likely to reduce the likelihood of the same.

Finally, the impact caused by action in the EU needs to be considered in the light of regimes and liability that can arise elsewhere, notably in the US.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
 
In association with
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement

Mondaq.com (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of www.mondaq.com

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about Mondaq.com’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.

Disclaimer

Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.

Registration

Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to unsubscribe@mondaq.com with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.

Cookies

A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.

Links

This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.

Mail-A-Friend

If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.

Security

This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to webmaster@mondaq.com.

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to EditorialAdvisor@mondaq.com.

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at enquiries@mondaq.com.

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at problems@mondaq.com and we will use commercially reasonable efforts to determine and correct the problem promptly.