June 21 2012
In practice, applicable technical standards in the manufacturing industry play a prominent role in determining whether a given product meets legal product safety requirements. In the European marketplace a wide variety of standards exist, some of which are particular to a specific country, while others apply to the European Union as a whole.
The present case(1) was decided by the court not on the basis of strict liability under the Product Liability Act, but under the fault-based liability regime of the Civil Code. The court found that, while applicable technical standards for a given product are in general a substantial factor in evaluating its safety, the duty of care imposed on manufacturers of products that are obviously hazardous requires that the manufacturer rely not solely on compliance with the applicable technical standards of the industry. Rather, the manufacturer must consider additional product safety issues during the design process. This case provides some useful insight into the German courts' view of the interdependence between technical standards in the industry and design requirements in the context of product safety.
The plaintiff (who was one-and-a-half years old at the time of the accident) was injured while his parents were preparing a coal fire in a barbecue grill on the balcony of their apartment. The cause of the plaintiff's injuries was a flare from a bottle of fire accelerant paste. The plaintiff's father was using the paste to light the coal in the barbecue grill. The plaintiff suffered severe burns on his face and body. The defendant was the manufacturer of the paste, which was sold in one-litre plastic bottles. The plastic bottles, which were distributed by the defendant, bore a childproof closure with an integrated dosage valve. The defendant had purchased the valves from a supplier, which appeared as a third party in the lawsuit. The court of first instance dismissed the plaintiff's claim in its entirety on the grounds that any claims based on the strict liability regime of the act had already been forfeited under the applicable statute of limitations. Also, the court of first instance explicitly held that the manufacturer had not breached its duty of care, which would have been a prerequisite for claims based on the Civil Code.
On appeal, the plaintiff (appellant) stated that the proximate cause of the accident was the loosening of the dosage valve, the direct consequence of which was the flare that severely burned the plaintiff. The plaintiff stated that the loosening of the dosage valve was attributable to a design defect in the bottle, for which the defendant was responsible. The plaintiff sought compensatory damages of €50,000.
The defendant moved to uphold the judgment of the court of first instance and to dismiss the appeal. Its principal argument was that certain findings were sufficient to defeat the claim of breach of duty of care – namely, that the bottle cap was designed and manufactured in full compliance with the applicable German industry standard (DIN 66358) and that the product had been tested and approved by a technical inspection association.
The Hamm Court of Appeal nevertheless reversed the judgment of the first instance court and awarded €50,000 in damages.
The court of appeal declined to apply the Product Liability Act's statute of limitations. Rather, it held that because the award was grounded on the fault-based liability regime of Section 823 of the Civil Code, the longer statute of limitations of that section should be applied, which meant that the claim had been filed in time.
The court then ruled that the bottle manufactured and distributed by the defendant was defective. The court first resorted to the established principle that a manufacturer is liable for breach of its duty of care when a defective product is placed on market. Applying the findings of the court-appointed expert to the established precedent of the Federal Supreme Court, the court held that the bottles were defectively designed because, at the time of their entry into the marketplace, they did not employ all safety features and incorporate all safety warnings that might reasonably have been expected for such a product, given its purpose and foreseeable use by consumers.
In the judgment, the court stressed that compliance with the applicable industry standards was insufficient to prove the absence of a design defect. In this context, the court referred to an earlier Federal Supreme Court decision in which technical standards were found to represent only the minimum safety standards for a given product, thereby requiring the manufacturer also to consider, evaluate and monitor all other technical issues and insights, even if these are not included in the current industry standards. The court added that a manufacturer must consider all reasonably foreseeable technical risks and hazards in connection with a given product and its use. In the opinion of the court, the level of duty of care with regard to product safety requirements would directly depend on the type of product. Specifically, the court held that the requirements would be particularly strict in the event of an imminent risk of death or bodily injury to consumers from the product in question. In the view of the court, such dangers were obvious for a bottle containing flammable agents.
The expert had found that the dosage valve integrated into the bottle cap was not properly constructed so as to resist the removal of the cap not only by tensile but also by leveraging force. Referring to several examples provided by the expert, the court held that the inadvertent removal of the cap should reasonably have been foreseen by the manufacturer during the design process. Furthermore, the court agreed with the expert's opinion that the inadvertent removal of the cap had been the cause of the flare; had the cap been properly designed and manufactured to offer leverage-removal protection, the plaintiff would not have been injured by the flare.
Ultimately, the court accepted the expert's findings that, given the highly flammable content of the bottles and their foreseeable use near a naked flame, it would have been necessary to design and manufacture the bottle, cap and dosage valve in such a way that any separation of the cap and the integrated valve from the bottle would be technically impossible. The court also agreed with the expert's statement that while the applicable technical standard (at that time DIN 66358, with which the bottle in question was fully compliant) provided only for the cap to be designed to resist tensile removal, the risk of removal by leveraging force should have been evident to the manufacturer and should have been accounted for in the design. Following the Federal Supreme Court precedent, the court presumed that the design defect and the organisational omissions leading to it were attributable to the manufacturer.
The court found no contributory negligence on the side of the plaintiff based on lack of evidence that the father acted negligently. The court also held that contributory negligence based on breach of the parental duty of supervision was inappropriate, as no such breach had been shown. It thus awarded the plaintiff compensatory damages in the full amount of €50,000, plus court costs and attorneys' fees.
In essence, this decision places a difficult burden on manufacturers. Applying the standards of the court, a product may be regarded as defective even if it fully complies with the applicable technical standards of the industry and such compliance has been confirmed by a neutral third party (eg, a technical inspection association). The court expressly ruled that it is the manufacturer's duty to anticipate foreseeable misuse of a given product, even if technical measures aiming at the avoidance of such misuse are not included in the applicable technical standards. In this case, the court held the defendant responsible for a foreseeable misuse that it allegedly did not anticipate.
Although the court repeatedly emphasised that the fire accelerant paste in itself represented an extremely hazardous product by its nature, the court did not expressly limit the requirements with regard to the applicable duty of care to manufacturers of such inherently hazardous products. Consequently, the judgment will apply to all manufacturers. The level of the duty of care to be applied by the manufacturer in both product design and product monitoring processes will require the manufacturer to view industry standards as minimum product safety standards only. Compliance with such standards will not exonerate the manufacturer from liability for the consequences of foreseeable misuse, even if the relevant risk is not foreseen by the applicable industry standards. Since the findings of the expert, while apparently plausible and consistent, do not appear unassailable, this case also demonstrates the strong influence of court-appointed experts on final court decisions.
For further information on this topic please contact Joerg Staudenmayer or Marla Weston at CBM International Lawyers LLP by telephone (+49 7031 439 9600), fax (+49 7031 439 9602) or email (firstname.lastname@example.org or email@example.com).
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