Rules & Regulations

Product Liability

Consumer Protection Act 1987

This wide ranging act introduced a number of measures for the protection of consumers. One area of protection was to make it a legal responsibility for the producers or importers of products to supply safe products. The provisions relating to this are the product liability and safety provisions.

If you are a maker or importer of products you can be held liable for damages for products that cause harm or damage to persons or property.

You can read a copy of the Act here.
You can download a clear, readable guide from BERR (formerly the DTI) here: Guide to the Consumer Protection Act 1987 Product Liabilities and Safety Provisions.

If in any doubt take legal advice. Trading Standards enforce this act, you can get advice from them at www.tradingstandards.gov.uk (there are many leaflets and factsheets).

If the act applies to you, you are also strongly advised to take out product liability insurance.

Your obligations

If you produce or import goods you are obliged to ensure they are as safe as an ordinary person can reasonably expect. See What you should do, below for ideas on how to do this.

What product liability means

Product liability means:

• People have the right to sue for damages caused by defective products

This right applies to anyone using or harmed by a defective product - not just to the person who purchased it in the first place.

Who is liable

Under the act an injured person may sue:

• Producers - whoever produced or manufactured the goods
• Importers - whoever imported the goods into the EC. Where goods are brought first into the EC then imported into the UK, it is the first importer who is liable
• 'Own Branders' - suppliers who put their own brand onto a product and give the impression they have produced or manufactured it

Wholesalers or retailers are not liable under this act, unless they refuse to identify who the producer or importer was (but they are liable under the Sale of Goods Act to only sell products which are fit for purpose and safe).

The Act allows the injured person to pursue claims against all those who are liable, not just one.

Goods covered by the Act

The act applies to the following:

• All consumer goods and goods used at work are covered
• Buildings are not covered, though individual building goods are, eg bricks, mortar etc
• The act extends to raw materials and components as well as finished articles - if an article is unsafe then liability extends to the manufacturer of the faulty component or material as well, if applicable
• Information, print and software are generally not covered (though faulty instructions that cause danger and faulty software that causes dangerous functioning of a product are covered)

Defective products

A defective product is one which is not as safe as a reasonable person might expect it to be given when the product was produced, its general nature and price, what it is intended to be used for, how it is marketed and any instructions that come with it.

What can be claimed for?

Under the act a person can claim for:

• Death
• Personal injury
• Damage or loss of private property exceeding £275

There is no upper limit of liability. A plaintiff will have to show that, on the balance of probabilities, the faulty product caused the damage. A claim must be made within 3 years of the injury or damage and within 10 years of the product being supplied.

What you should do

The Act seeks to make products as safe as they can reasonably be, so your obligations as a business are to ensure that your products are as free from defect as possible. You can help to do this by:

• Checking if there is any specific legislation or standards for the type of product you are making or importing and seeing if your product meets them
• Checking with trading standards for any additional advice or alerts
• Thinking through the design and manufacture process to ensure the product meets the needs of the users and is robust enough for the purpose
• Ensuring your suppliers supply you with quality and safe components and materials
• Having a quality process in place that allows for routine and random testing of your products and your manufacturing process
• Maintaining product liability insurance, which covers you in the event of a claim against you
• Keeping good records - a consumer can claim for up to 10 years from when the product was supplied by the producer and any time within three years of injury or damage occurring

Product liability insurance

Product liability insurance is not compulsory but it is highly advisable if you make or import products. It will cover you against claims made against you for defective products. You should check your policy terms carefully and make sure you don't do anything which invalidates your policy - discuss it with your broker.

Getting insurance

To obtain insurance talk to your insurance broker, check the Business Benefits Pack to see which North East insurers are offering good terms to tourism businesses, search on the internet or use Business Link's choosing an insurance adviser pages.