Product liability and safety law is a vital consideration if your business supplies products to consumers.
Products must be safe when they reach those consumers and, while the burden of safety often falls on the manufacturer, there are legal obligations for shops and other distributors as well.
The consequences of ignoring these obligations can be extremely severe, including even a prison sentence, so it's vital that you are aware of and compliant with them.
Producers, manufacturers, importers, businesses that customise products, and businesses that ‘own-brand’ products (for example by putting their own brand name on an existing product) bear the heaviest burden when it comes to liability and safety.
Retailers may liable if they fail to inform the producer about an unsafe product when asked to do so by a consumer. Furthermore, retailers may also be liable in the event that they fail to take reasonable steps to avoid providing unsafe products.
It is also important to remember that there may be multiple parties involved in the manufacturing chain. In these cases, each of these parties may be held jointly liable.
A case can be brought by anyone who is harmed. Normally, they have up to three years from the date of the injury to begin proceedings, but in some cases this deadline may be extended to up to ten years.
In the event that no one is injured but the product is still unsafe, you cannot be sued, but you may still be prosecuted. This applies both to the business and, in some cases, to directors individually.
The consequences of producing a product that is unsafe vary depending on the circumstances. If someone is killed or injured, you can be sued for damages. In the event of damage to property, you can be sued in the event that the damage caused is equivalent to £275 or more.
In the case of injury, damages will depend on the nature of that injury, but can run into hundreds of thousands of pounds. In the case of death, damages are typically awarded based on the total potential earning power of the individual over the rest of their natural life. Clearly, such an award can run into the millions.
If the product you manufacture or supply is safe, but it is incorrectly installed and therefore becomes dangerous, you are unlikely to be held liable.
The exception to this is cases in which the product requires special knowledge or handling, and you fail to pass this information on to the installer or distributor. In these instances, you must provide proper instructions.
In order for your product to be deemed safe under product liability and safety law, it must be as safe as can be “reasonably expected”. The specific steps you need to take in order to ensure this will depend on the nature of the product, but as a first step you should check to see whether there are statutory or generally accepted safety standards at a UK or EU level.
There is a common misconception that you can indemnify yourself against loss or injury simply by asking customers to sign a waiver to that effect. In fact, this has no basis in law. You must take every reasonable step to ensure that the product is safe in any case.
In the case that you are liable for injury or damage caused by an unsafe product, you may in the first instance wish to settle the claim. However, if you choose to defend yourself, there are six grounds on which you may be able to do so.
You should consider taking out product liability insurance. This can protect you against financial claims made against you as a result of an unsafe product.
You should also think about combining product liability cover with other key covers such as public liability and professional indemnity, in order to make sure that your business is properly protected.
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22 June 2020 • 9-minute read
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