The semi-annual overview of product liability and product safety law in practice
Evaluation period August 2022 – June 2023
Decisions in product liability and product safety law are of great importance for manufacturing companies. Recent case law has dealt, among other things, with claims for compensation in the case of serial defects and the question of who is to be regarded as the manufacturer of a product in the first place.
The Federal Court of Justice (BGH), Court decision of 21.03.2023 – VI ZR 1369/20
The sale and distribution of waste often causes legal problems in practice. In the present case, the defendant had purchased a potassium phosphate solution as waste, subsequently labelled it as an EC fertiliser for arable farming and prepared product information. It had the waste thus re-declared delivered by a distributor directly from the third party to the buyer, a farmer. After the farmer had applied the fertiliser to his field, the treated plants died within ten days. The farmer attributed this to contamination with herbicides and claimed damages of just over EUR 70,000.
In the opinion of the lower court and the Federal Court of Justice, there was no case of product liability under the Product Liability Act. This was because § 1 para. 1 sentence 2 ProdHaftG presupposed that an object other than the defective product was damaged and that this object, by its nature, was usually intended for private use or consumption. However, the plaintiff farmer had acquired the fertiliser for professional purposes, which is why nothing else could apply to the plants fertilised with it.
However, the Federal Court of Justice found that the seller’s conduct constituted a breach of a duty of care within the meaning of section 823(1) of the German Civil Code. The manufacturer had the most extensive duty to avoid product defects, whereas distributors were only responsible to a very limited extent due to their lack of influence on the design and planning of the product; in particular, liability for design and manufacturing defects was excluded.
A person who only purchases a product and resells it for a specific purpose can also be held liable in tort as the producer of the product. By renaming the waste and creating the corresponding product information, the seller had created a new product and was thus a producer in the sense of producer liability. Although the waste had already been sold to her contaminated, the public has different requirements for waste on the one hand and fertiliser on the other. Therefore, the seller could not assume that the waste had been examined for contamination beforehand – neither by the third party nor by the distributor.
District Court (LG) Hamburg, Court decision of 14.11.2022 – 322 O 63/22
Serial error I
The question of whether defects in a product series can give rise to claims for compensation by users has been the subject of many court decisions in recent years. In the case before the Hamburg Regional Court, the issue was not a so-called suspected defect, but the question of how product defects that occurred elsewhere in a product series affect the plaintiff’s standard of proof. The plaintiff had an IUD inserted for contraception, which came loose after three years, with one of the arms missing.
The court granted the claim for compensation for pain and suffering under §§ 1 para. 1, 8 sentence 2 ProdHaftG, reducing the amount claimed. The fact that a product defect in the IUD in question had not been proven was irrelevant because there was prima facie evidence that the loss of one arm was due to a product defect. The same defect had occurred in several of the manufacturer’s products in this series. Moreover, no other reasons for the loss were apparent.
District Court (LG) Limburg, Court decision of 14.10.2022 – 4 O 114/21
Serial defects II
This case also involved the question of the defectiveness of an IUD for contraception. Some of the products placed on the market ruptured while still in the body or when removed. The manufacturer then initiated a recall.
In the case of the plaintiff, both arms of the IUD had broken off in the course of removal prompted by a desire to have children, not by the recall. Two attempts to remove them failed. Only a third attempt in the form of a clinical operation was successful.
The District Court found a product defect resulting from a manufacturing defect. The compound of a plastic and barium sulphate had not been mixed properly, causing the material to become brittle in some places.
If damage occurs frequently during the use of a product, there is prima facie evidence of its defectiveness, even if this evidence has not been provided for the product at issue. The frequency of faults in the affected batches already speaks for an objective safety defect that could potentially lead to damage. Finally, there was further prima facie evidence in favour of the causality between the defect and the damage, because precisely the defect described in the defendant’s warnings had occurred.
Higher Regional Court (OLG) Zweibrücken, Court decision of 30.08.2022 – 1 U 267/21
A person who knows that his product may not be safe but uses it anyway cannot claim compensation for the resulting damage. The plaintiff suffered a deer accident and attributed this to a “wandering braking point” and thus a product defect in his motorbike.
This could not be established; simple wear and tear was also a possibility. Furthermore, according to the Higher Regional Court, the plaintiff had already tried to repair the front brake several times before the accident; the motorbike had been in the workshop a total of five times for this reason. After the last repair, the plaintiff had not checked whether the problem had now been eliminated: Therefore, trust worthy of protection could not have arisen at all. As a driving instructor and experienced motorcyclist, the plaintiff should have been aware of the extent of the problem. However, anyone who “so recklessly” puts himself in danger must bear the resulting damages himself.
Administrative Court (VG) Stade, Court decision of 18.01.2023 – 6 A 296/20
Non-hazardous kneading slime
Sometimes the market surveillance authorities overshoot the legal target. This was also the case in this case, where an importer of plasticine as a children’s toy was prohibited from continuing to market the product. The background was that the boron content exceeded the limit value of the EU Toys Directive (2009/48/EC).
According to the Stade Administrative Court, such a measure (based on Article 16 (1) of the Market Surveillance Ordinance) requires a health risk, whereas mere non-conformity with the Toys Directive is not sufficient. Although the contents actually exceeded the limit values, there was no health risk whatsoever. Therefore, the market surveillance authority should have first requested the manufacturer to take countermeasures. A direct complete prohibition of the placing on the market was disproportionate.
Revision of the Product Safety Regulation
Along the way, the framework conditions of product safety law have changed. The Product Safety Regulation, which replaces the previous directive, was published in the Official Journal of the European Union on 23.05.2023 and applies from 13.12.2024.
Direct applicability ensures a maximum degree of harmonisation in the EU and thus more legal certainty for those applying the law, as transformation into national law and thus susceptibility to national differences is no longer necessary. As in the past, however, the fine and penalty provisions required to enforce the law will be found in flanking national laws, in Germany probably in the law on making products available on the market (ProdSG).
Among other things, the definition of the safe product and the placing on the market in the case of online trade are new. In future, all economic operators will be subject to extended notification and cooperation obligations vis-à-vis the market surveillance authorities, which must be informed via the European Commission’s Product Safety Alert Business Gateway tool if a product is found to be unsafe, irrespective of the degree of risk identified. A so-called product responsible person must be established in the EU as a contact person for each product placed on the market.
In addition, the requirements for the implementation of consumer recalls have been harmonised and more incentives have been created to make consumer participation in recall measures more attractive. In future, recalls must be initiated by an appropriately marked letter, which must be written in all member state languages in which the respective product has been placed on the market. Manufacturers will be obliged to use all available information channels, including social media, to inform consumers about a recall. In this context, they must not use trivialising terms such as “voluntary”, “precautionary” or even “in rare/specific cases” in order not to mislead consumers about the urgency of a measure.
The implemented mechanisms, if implemented appropriately, will result in significantly increased consumer protection and a noticeable intensification of market surveillance activities. The short implementation period gives economic actors relatively little time to adapt their processes to the new requirements.back