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18 October 2018
The High Court has held that a retail store owner was jointly liable with a product manufacturer for an accident that had occurred at his store.
Faisal and another v Younis (trading as Safa Superstore) and another  EWHC 1111 (QB)
A mother and her two year old son both suffered serious injuries when the boy reached out to a bottle of caustic soda displayed on the bottom shelf at a shop, and attempted to ingest the contents. The manufacturer admitted liability in light of the fact that the child-resistant cap was defective. The court was therefore required to determine what, if any, contribution to liability was due from the retailer.
The High Court agreed with the court at first instance that the retailer ought to have appreciated that there was a foreseeable risk of injury to children if the product was stored on the bottom shelf. This was particularly so considering the label on the bottle contained a warning that the contents could cause severe burns and that the bottle should be kept out of the reach of children. Consequently the retailer was held jointly and severally liable in respect of the same damage as the manufacturer. In contribution proceedings the court apportioned responsibility on the basis that the manufacturer should bear two-thirds and the retailer one-third.
This case acts as a particular warning that retailers cannot abdicate responsibility to manufacturers for product safety issues. Retailers must undertake their own risk assessments on the products they display. More generally, however, this case serves as a reminder of the scope of liability risks for the various parties in the product supply chain: manufacturers, distributors, suppliers and retailers could all be held responsible for damage, injury or death caused by their product.
Liability for harm can arise in a number of ways within the product supply chain and all parties involved should remain vigilant. In summary:
Generally, any party purchasing products at any stage along the supply chain (including the ultimate consumer) can bring a contractual claim against the party from whom they directly purchased the product. The law will imply certain contractual terms about the quality and nature of goods purchased even if such terms are not specifically referred to when the goods are bought.
Consumers can bring claims under the CPA for damage suffered from defective goods. Primary liability under the CPA normally rests with the producer. Liability is strict, so a consumer will have a claim irrespective of whether the producer is at fault. If, however, the producer is insolvent, untraceable, or outside the EU, then a claim could be made against the distributor, supplier or retailer instead.
A claim in negligence could be made against any party in the supply chain, if their actions were negligent and caused loss or harm to a party who has purchased the product. In addition, a claim may also be brought by a person who uses the product or a third party bystander who is injured by the product.
The General Product Safety Regulations 2005 impose obligations on producers and distributors of goods to ensure that consumer products placed on the market are safe. Liability is strict so that there is no need to prove that the producer or distributor knew that the product was unsafe. A breach of this obligation is a criminal offence.
The product liability risks for companies involved in negligence claims are enhanced by the existence of 'joint and several liability' – as this case illustrates. It means that a defendant may be liable for the full amount of compensation awarded to the claimant, regardless of how far they were responsible for the injury. It is then for that party to seek contribution from the other wrong-doers.
The existence of 'joint and several liability' has long been criticised for creating disproportionate liability as, for example, it arguably places insured companies at greater risk. Suggestions for reform have included the introduction of proportionate liability or a statutory capping regime on insurance claims. Until then, however, anyone who produces, supplies, distributes or displays products should be mindful of the scope of product liability law.
For further information on this topic please contact Sian Edmunds at Burges Salmon LLP by telephone (+44 117 939 2000) or email (firstname.lastname@example.org). The Burges Salmon LLP website can be accessed at www.burges-salmon.com.
This article has been reproduced in its original format from Lexology – www.Lexology.com.
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