A UK distributor imports products manufactured in another EU Member State and sells them to retailers, who in turn sell them to end users. A defect in such a product causes personal injury or damage to the property of a user. The manufacturer has exercised due care in the design of the product and the production process. Expert evidence cannot establish how the defect came to be present. The distributor has verified the standing of the manufacturer and his quality assurance procedures and tested samples of the incoming product. Negligence cannot be established against either the manufacturer or the distributor. Who if anyone is liable for the damage to the injured person and how will this change in the event of a no-deal Brexit?
The current position is as follows:
- Provided that the distributor identifies the manufacturer, he will be under no further liability to the injured person1.
- The injured person need not prove fault on the part of the manufacturer. If he can prove the defect, the damage and that the defect caused the damage, the manufacturer will be liable2. Whether the product is defective is determined not by its fitness for use but by whether it lacks the safety which persons generally are entitled to expect3.
- As the damage occurred in the UK, the courts of the appropriate part of the UK will have jurisdiction to hear the claim against the foreign manufacturer4. The court has no discretion to decline jurisdiction.
- A judgment of the UK court against the manufacturer will be enforceable in other EU Member States5.
In the event of a no-deal Brexit, the position will change.
- As an importer into the UK, the distributor will be liable to the injured person as if he were the manufacturer6.
- The product will have been exported from the EU. If the manufacturer could not reasonably have foreseen that the product or a product of the same type would be marketed in the UK, the law of the manufacturer’s domicile will apply7. It is unlikely that that law will make EU manufacturers liable without fault to persons who suffer damage outside the EU and who have no connection with the EU8.
- If the injured person is to proceed against the manufacturer, he will require the permission of the court to serve proceedings abroad. For that purpose, he will have to show that the damage was sustained in the UK (or, if he proceeds against the distributor as well, that the manufacturer is a necessary and proper party), that he has a good arguable case and that the UK court is the most appropriate forum for the trial of the action9.
- Enforcement of UK judgments in EU Member States will depend on the national law of the relevant Member State. Those Member States who had entered into bilateral reciprocal enforcement treaties with the UK may no longer regard them as remaining in force. Foreign manufacturers faced with claims in the UK may have to consider whether there are grounds to contest the jurisdiction of the UK court and/or whether to allow judgment to be entered by default on the basis that appearing in the proceedings to contest the merits may make any adverse judgment more readily enforceable.
Section 20(1) of The European Union (Withdrawal) Act 2018 defines “exit day” as 29 March 2019 at 11:00pm, although that definition may be amended by a Minister of the Crown by Regulation. At present, there can be no certainty over the effect of Brexit on product liability claims. Those potentially affected may wish to take precautions.
- Injured persons with claims against manufacturers domiciled in the EU may wish to consider bringing their claims before exit day while the courts have no discretion to decline jurisdiction.
- Importers into the UK should review their product liability insurance.
- The Consumer Protection Act 1987 does not affect rights of contribution or recourse among parties involved in the process of production and supply. Suppliers of raw materials, components and finished products should review their contracts with both suppliers and customers. In particular, importers into the UK should check their contracts with their own suppliers for terms which might (1) limit or exclude claims, (2) determine which law is to govern them or (3) provide for where they are to be heard.
1 Section 2(3) of the Consumer Protection Act 1987 (“the CPA”)
2 Section 2(1) of the CPA
3 Section 3 of the CPA
4 Article 7(2) of Regulation (EU) 1215/2012 on Jurisdiction and the Recognition and Enforcement of Judgments in Civil and Commercial Matters
5 Article 39 of Regulation (EU) 1215/2012
6 Section 2(2)(c) of the CPA as amended by section 6 and Schedule 3 of The Product Safety and Metrology etc. (Amendment etc) (EU Exit) Regulations 2019
7 Article 5 of Regulation (EC) No 864/2007 on the Law Applicable to Non-Contractual Obligations
8 See Allen v Depuy International Ltd  EWHC 753
9 Regulation (EU) 1215/2012 will be revoked by Regulation 89 of the Civil Jurisdiction and Judgments (Amendment) (EU Exit) Regulations 2019. The position will be governed by Civil Procedure Rules rule 6.37 and Practice Direction 6B
This article is for general information purposes only and does not constitute legal or professional advice. It should not be used as a substitute for legal advice relating to your particular circumstances. Please note that the law may have changed since the date of this article.