Product Liability for Retailers

Claire Opacic
Claire Opacic

Published: December 13th, 2023

7 min read

The focus of product liability literature is often on manufacturers but, whilst retailers may often be able to escape liability due to the provisions of s. 2 of the Consumer Protection Act 1987, there are still scenarios in which a retailer may be found liable. As such it is sensible to ensure that you have a good grasp of the potential liability that may exist and the current law in this area. We have therefore set out below a helpful reminder of the key causes of action in respect of:

  • Consumer Protection Act 1987
  • Contract and Consumer Rights Act 2015
  • Negligence

Consumer Protection Act 1987

This Act was introduced to provide protection for any consumer who suffers damage as a result of a defective product. As a result any consumer can bring a claim for either personal injury or property damage which is caused wholly, or partially, by a defect in a product even in the absence of a contractual relationship. Section 2 of the Act identifies that the duty in respect of defective products lies with:

(a) the producer of the product;

(b) any person who, by putting his name on the product or using a trade mark or other distinguishing mark in relation to the product, has held himself out to be the producer of the product;

(c) any person who has imported the product into the United Kingdom in order, in the course of any business of his, to supply it to another.

(d) any person who supplied the product if the person who suffered the damage requests the supplier to identify one or more of the persons (whether still in existence or not) to whom subsection (2) above applies in relation to the product; that request is made within a reasonable period after the damage occurs and at a time when it is not reasonably practicable for the person making the request to identify all those persons; and the supplier fails, within a reasonable period after receiving the request, either to comply with the request or to identify the person who supplied the product to him.

In many scenarios a retailer will not be the manufacturer but they may have added a trademark or name if it is an "own brand product". They may have imported the item into the UK from a producer based abroad, often in China, and finally even if none of the above apply, if a retailer does not have proper systems in place to deal with enquiries from a claimant, it may still be caught by the legislation by failing to pass on the manufacturers details in a reasonable time frame and so face the risk of liability. As a result you need to be aware of the supply chain of your stock and your potential exposure, which may vary across the different goods held. Additionally any correspondence from a claimant or their solicitor seeking the identify of a manufacturer or importer should be actioned, and not ignored, to ensure that you do not lose the opportunity of an easy defence to such claims where your business does not hold one of the other statuses identified within the Act.

Liability applies under this Act where the safety of the product is not such as persons generally are entitled to expect, unless the defendant can fall within one of the specified defences provided. As a result there can be strict liability for damage caused by a defective product as the claimant needs to only prove to succeed in a claim that the product was defective, they suffered damage, and there was a causal link between the defect and the damage suffered. There does not need to be proof by the claimant of fault on behalf of the defendant and, unless one of the set defences applies, liability may attach even if the issue was not known before. The main defence used is that the defect did not exist at the time of supply and has arisen since, but there may be specific scenarios in which one of the other statutory defences could apply. Establishing the same will often require the cost of an expert and will accrue costs that cannot often be recovered from the claimant so it is sensible to try and avoid the need for being involved in such evidential arguments where possible.

Contract/Consumer Rights Act 2015

The condition of goods supplied will often be an explicit term of a contract for supply in a business contract. Where a formal deal has been negotiated both parties may have included provisions to clarify their obligations and to limit their liability in respect of the same. As a result in a business to business transaction the extent of any likely claim for a defective item may well be clearly established in the available contractual paperwork. Where it is not though for consumer purchases, the Consumer Right Act 2015 will imply a term that the quality of the goods is satisfactory. The Act provides that the quality of goods is satisfactory if they meet the standard that a reasonable person would consider satisfactory, taking account of any description of the goods, the price or other consideration for the goods (if relevant), and all the other relevant circumstances. In determining liability under the Act a court will consider factors such as the expected durability, safety and the fitness for the purpose the item was supplied.

Under this Act there is no ability for the retailer to pass on liability to a manufacturer and the liability will remain between the supplier and the customer. Whilst you may be able to pass that liability on to a manufacturer through your own additional claim based on your own contract for supply, this creates further costs from an additional action and may result in a claimant involving the supplier in court proceedings even if you have complied with the information provision requirements under the Consumer Protection Act 1987.

Negligence

To prove a claim in negligence a claimant would need to show that the defendant owned them a duty of care, that the defendant breached that duty, that the breach caused the damage and the damage was foreseeable. Whilst a court is likely to accept that a manufacturer or supplier has a duty of care to their customers, for a claimant to succeed in this regard however they will need to prove that the defendant failed to take reasonable care. If you are merely a supplier, and have not been involved in the manufacturing, it may be difficult to show that there has been a breach of any duty, particularly if the items come packaged and any fault would not have been visible without opening up the item. The extent of any liability on a supplier in this regard will therefore depend on their involvement and knowledge. If a supplier was advised by the manufacturer of a fault and recall but failed to pass that information on to their customers it is likely that a court would consider this in breach of their duty to their customers. Liability may also apply if there has been an element of consultation about the choice of product by the customer. For example if a customer asks for advice on the right item to purchase for a specific function, and he is guided to buy a product that is not suitable for that function, the advice given in this regard may be sufficient to extend the suppliers liability for any resultant damage due to their added awareness of the customer's needs.

Comment

This is a brief review of the current main causes of action for this area and is not a complete review of all issues that need to be considered in these types of claims. Aside from the issue of liability product liability claims can also often have additional complications. There may be limitation issues due to the absolute long stop limitation period for consumer protection claims or caused by arguments over the date of knowledge. There has also been a trend by some claimant solicitors to seek to bypass fixed costs by suggesting that such claims are excluded from the PL pre-action portal despite no clear guidance in this regard. As such should you require more detailed insight or receive a new product liability claim, and require further assistance, please do not hesitate to contact us. It is also important to note that a government consultation in respect of potential amendments to the law governing product safety within the UK closed in October 2023. We shall have to wait to see if this leads to any significant changes for claims going forward but do keep an eye on our regularly issued updates for any news in this regard.


For further information please contact Claire Opacic

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