Overview of Product Liability in Tort
The formation and development of the product liability doctrine
Product liability is a crucial aspect of consumer protection in developed countries, with regulations established to ensure comprehensive safety for consumers Historically, the product liability regime has effectively safeguarded both consumers and manufacturers The United States pioneered the application and development of product liability laws, significantly influencing global practices Inspired by the success of American legislation, the European Union has also implemented its own product liability framework, demonstrating a commitment to protecting consumer interests To grasp the principles and applications of product liability law, it is essential to explore its historical evolution and development.
The evolution of product liability law is intricately linked to the decline of the doctrine of privity, which traditionally held that contracts only created obligations between the parties involved, leaving third parties without recourse Esteemed legal scholar Professor William Prosser emphasized that the history of product liability reflects a challenge to this doctrine, ultimately empowering injured individuals to seek legal remedies for harm caused by defective products This shift marked a significant change from a legal framework that predominantly protected manufacturers to one that recognizes the rights of consumers, allowing them to claim compensation for injuries sustained from unsafe products.
In their 2010 article, Tran Thi Quang Hong and Truong Hong Quang explore key issues surrounding product liability and its significance in consumer protection They analyze the framework of product liability laws and emphasize the role these regulations play in safeguarding consumer rights The authors highlight the importance of establishing accountability in the marketplace to enhance consumer confidence and ensure product safety This examination provides valuable insights into the intersection of legal responsibility and consumer welfare.
The doctrine of privity establishes that a contract typically cannot grant rights or impose obligations on individuals who are not parties to the agreement For more detailed information, visit: http://www.lawteacher.net/contract-law/privity.php#ixzz2U30U24IL.
6 M.A Tran Thi Quang Hong, Truong Hong Quang (2010), above n 4
7 Denis W Stearns, (2001), Product liability: A brief history of its early origins, Marler Clark, LLP, p.1 Source: http://www.marlerclark.com/pdfs/intro-product-liability-law.pdf, 06/08/2013 8.30
6 not be sued, even for negligence, if there is no contractual relationship between the manufacturer and the plaintiff
In the nineteenth century, the privity doctrine was employed by defendants and judges to dismiss claims from plaintiffs seeking compensation for damages caused by defective products This legal principle continued to dominate product liability cases in the ensuing decades.
The seminal case MacPherson v Buick Motor Co of The Court of Appeals of New
York 8 marked the rejection of the privity doctrine in the United States In this case, the plaintiff was injured when a wheel on the car he was driving, and which he bought from a retailer, fell in to pieces, causing the car to crash He brought an action for negligence against the manufacturer The court upheld the plaintiff’s claim and Buick Motor Co had to pay damages to Macpherson This case determined that lack of privity is not a defense if it is foreseeable that the product is likely to cause injury negligently to the consumers
In the United States, the MacPherson precedent established a significant shift in negligence law by eliminating the need for privity in contractual relationships This landmark case was widely adopted by courts across the nation, paving the way for the evolution of negligence theory, particularly in product liability cases.
Following the dismantling of the doctrine of privity, consumers gained access to two main legal actions: negligence claims and breach of warranty claims in contract law However, liability for breach of warranty is limited to situations where the parties share privity of contract, as warranties are considered essential components of the sales contract This is particularly relevant in the context of express warranties, which are often explicitly stated in the agreement.
8 http://www.courts.state.ny.us/reporter/archives/macpherson_buick.htm, 12/07/2013 11.05
Warranties in a contract provide assurance that goods meet the contract description, are suitable for their intended purpose, and possess merchantable quality If a defective product causes harm to a consumer, the seller may be held liable for breaching the warranty terms Product liability law addresses three types of warranties related to a product's quality and fitness for use: express warranty, implied warranty of merchantability, and implied warranty of fitness for a particular purpose.
10 http://legal-dictionary.thefreedictionary.com/Breach+of+Warranty 26/05/2013 09.10
During the 1930s, the privity requirement was largely abandoned, particularly in cases involving implied warranties Initially, this exception to the privity rule was limited to food and drink products However, the landmark case of Henningsen v Bloomfield Motors Inc by the New Jersey Supreme Court expanded this perspective It established that liability could extend to any manufacturer who introduced their product into the stream of commerce and marketed it, thereby eliminating the necessity of privity with the original purchaser Despite this shift, Henningsen remained rooted in contract law, focusing on the theory of implied warranty.
During this period, two key legal philosophies emerged in product liability cases: negligence and warranty While negligence requires proof of fault for consumer protection, warranties faced limitations due to the privity requirement.
Between 1930 and 1960, legal scholars and judges explored the establishment of strict liability in tort for defective products, leading many American courts to hold manufacturers accountable under this doctrine A landmark case illustrating this principle was Escola v Coca Cola Bottling Co of Fresno, where a waitress suffered injuries from an exploding Coca-Cola bottle Despite the plaintiff's inability to demonstrate the manufacturer's negligence, the court ruled that the producer and distributor of the bottles bore responsibility for any defects, reinforcing the concept of strict liability in product liability cases.
11 http://law.jrank.org/pages/9466/Product-Liability-Historical-Development.html, 12/07/2013 11.10
12 www.casebriefs.com/blog/law/contracts/contracts-keyed-to-farnsworth/policing-the-bargain/henningsen-v- bloomfield-motors-inc-2, 12/07/2013 11.07
13 The School of Law – Washington University (1974), Strict Product Liability in Tort and the Meaning of
“Unreasonably Dangerous” Defects, Journal of Urban and Contemporary Law, Vol.8, p344-345 See more at: http://digitalcommons.law.wustl.edu/urbanlaw/vol8/iss1/22/, 03/07/2013 09.30
14 http://www.uic.edu/classes/eecs/eecs491el/LectureText/Lect10Text.htm, 04/07/2013 20.30
15 http://law.jrank.org/pages/9466/Product-Liability-Historical-Development.html, 04/07/2013 19.50
16 http://www.casebriefs.com/blog/law/torts/torts-keyed-to-epstein/products-liability/escola-v-coca-cola-bottling-co- of-fresno/, 04/07/2013 20.50
In 1963, the California Supreme Court's decision in Greenman v Yuba Power Products marked a significant turning point in the development of strict liability tort theory for product liability cases This landmark ruling established the doctrine of strict liability, simplifying the legal process for plaintiffs by alleviating many challenges associated with previous product liability theories.
In today's world, the rapid growth of large-scale goods production presents challenges in maintaining quality control, which can result in increased harm to individuals and property due to defective products, affecting not just users but also third parties Consequently, the rise in product liability cases, particularly in developing countries, underscores the necessity for robust product liability laws to protect consumers in an increasingly globalized market economy.
Definition and nature of product liability in tort
Product liability law holds manufacturers, distributors, suppliers, and retailers accountable for injuries caused by their products, ensuring that those who bring products to market are responsible for consumer safety.
Product liability, as defined by Black’s Law Dictionary, pertains to the legal responsibility of manufacturers and sellers to provide compensation for damages or injuries incurred by buyers, users, or bystanders due to defects in purchased goods This area of law encompasses both negligence claims and strict product liability under tort law.
17 Nguyen Thi Tuong Vi (2009), Trach nhiem san pham theo phap luat Cong dong Chau Au va Phap luat Viet Nam
(Product liability in EC’s law and Vietnamese law), Bachelors’ Thesis, HCMC Univerysity of Law, p6
18 See Greenman v Yuba Power Products (1963), http://online.ceb.com/CalCases/C2/59C2d57.htm, 04/07/2013 20.15
19 Nguyen Thi Tuong Vi (2009), above n 16, p6
In the 2008 article "Discussion on Law on Product Liability in Foreign Trade," Ph.D Tang Van Nghia examines the implications of product liability within international business contexts Published in the State and Law Review Journal, this work highlights the importance of legal frameworks that govern product responsibility in foreign trade, addressing key issues and challenges faced by businesses operating across borders The article contributes to the understanding of how product liability laws can impact international commerce and the responsibilities of manufacturers and distributors.
21 http://www.out-law.com/en/topics/commercial/supply-of-goods-and-services/product-liability-under-the- consumer-protection-act/, 05/07/2013 11.25
22 Black's Law Dictionary 5th edition (1979), West Publishing
Product liability is crucial for safeguarding consumer interests and is governed by various legal frameworks worldwide In the United States, Section 402A of the Restatement (Second) of Torts (1965) defines product liability, stating that sellers of products in a defective condition that is unreasonably dangerous to users or consumers are liable for any resulting physical harm Similarly, the European Union's Council Directive 85/374/EEC establishes that producers are liable for damages caused by defects in their products, emphasizing the importance of accountability in product safety.
From the definition of product liability, we can draw out the following feature while doing a research about product liability in tort:
Product liability in tort refers to the obligation to compensate for damages caused outside of a contractual agreement This form of liability holds producers accountable for injuries suffered by consumers, regardless of any existing contractual relationship between them Thus, tortious liability emphasizes the responsibility of manufacturers to ensure the safety of their products and protect consumers from harm.
The individual responsible for damages related to a product is typically the one involved in its journey from production to consumer This responsibility may vary by country due to differing national regulations on product liability, but there must always be a direct or indirect connection to the consumers Consequently, every product available in the market comes with a guarantee that holds someone accountable for its quality and safety.
- The product is defective and there is a casual link between the and the damage 27
To establish liability for manufacturers, producers, and wholesalers regarding defective products, consumers must demonstrate the burden of proof This includes providing evidence of the product's defect, the resulting damage, and the causal link between the defect and the damage Only by fulfilling these criteria can consumers pursue compensation for their losses.
23 http://biotech.law.lsu.edu/cases/products/402a-b.htm 05/08/2013 02.30
24 http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uriEX:31985L0374:en:HTML 05/08/2013 02.45
25 M.A Tran Thi Quang Hong, Truong Hong Quang (2010), above n 4
1.2.2 Nature of the product liability in the area of tort
Product liability regulations mandate that manufacturers deliver safe, high-quality products that meet consumer expectations This legal framework enhances manufacturers' awareness and accountability regarding their products, effectively safeguarding consumers.
Product liability can be categorized into contractual and tortious liability, with tortious liability arising from damage caused by defective products, even without a direct contractual relationship between consumers and producers, distributors, or importers Unlike contractual liability, tort law compensates individuals injured by defective products regardless of privity of contract Consumers can safeguard their rights through legal actions such as negligence or strict product liability against those involved in the design, manufacture, sale, or supply of the product, providing a more effective means of consumer protection than traditional legal frameworks.
Basic content of the product liability under the law of tort
Product liability primarily concerns defective consumer products, particularly in the context of tort law Manufacturers and sellers in the distribution chain may be held liable for physical harm caused by dangerous products Liability arises only when products are proven to be defective and result in damage to consumers.
Object of product liability has the following characteristic: firstly, it is product that is for consumption needs and is statutory regulated and secondly, that product has to be defective
Karl Marx viewed products as outcomes of the labor process aimed at fulfilling human needs In a market economy, products are defined as items that meet market demands and generate profit These products serve various purposes and are essential in satisfying consumer requirements.
11 daily needs of human and can also be used for serving the needs of producing and other needs 28
According to Black's Law Dictionary, a "product" refers to goods that are created or manufactured through various means, including natural processes, manual labor, or the use of tools, machinery, and chemicals This definition encompasses items produced by physical effort, intellectual endeavors, or those that arise naturally through generation or growth.
Products can be categorized into tangible and intangible types Tangible products are physical items that can be touched and experienced, such as buildings, vehicles, gadgets, and clothing In contrast, intangible products are services that can only be perceived indirectly, like insurance policies.
- Depend on whether the product is moveable or not, product is classified as real estate or movable property 32
- Depend on the using purpose, product is divided into products for consumption needs and products for production and business needs 33
Under the view of law research about product liability in several countries in the world, product is mentioned as:
- Products in the form of tangible personal property (good or chattel) or intangible (service) 34
- Product for consumption needs (consumer-product)
- Product which is regulated particularly by law
1.3.1.2 Defective product in product liability under the law of tort
In general terms, product liability law requires a product to meet consumers’ ordinary expectations A product which contains an unexpected defect or danger does not
28 Nguyen Thi Tuong Vi (2009), above n 16, p.9
29 Black's Law Dictionary 6th edition (1990), West Publishing
30 Nguyen Thi Tuong Vi (2009), above n 16, p.10
31 http://en.wikipedia.org/wiki/Product_%28business%29 05/07/2013 08.45
32 Nguyen Thi Tuong Vi (2009), above n 16, p.10
34 Mark A Kinzie, Christine F Hart (2001), Product Liability Litigation, West Legal Studies, p.3
12 meet the ordinary expectations of the consumer 35 Victims of injury resulting from the use of unsafe and defective products may be entitled to be compensated in tort
In tortious product liability, liability may fall on the designer, manufacturer, seller, or supplier of a product if it is found to be dangerously defective or unsafe The existence of a defect is crucial, serving as both the foundation of the product liability claim and a pivotal element in achieving a successful recovery or defense.
Black’s Law Dictionary defines “defective condition” as follows:
A product is considered defective and unreasonably dangerous if it poses a risk of physical harm that exceeds what an average consumer would expect, based on common knowledge of its characteristics It is important to note that a product is not deemed defective simply because there is a possibility of injury during its use.
In product liability tort cases, especially those involving negligence, the manufacturer's actions are crucial in establishing whether a product defect exists Conversely, in strict liability claims, the product itself serves as evidence to confirm or refute the presence of defects related to its manufacturing, design, or warnings.
There are three main types of product defects pertaining to product liability in tort which are manufacturing defects, design defects and marketing defects 39
Manufacturing defect will be determined if a product does not conform to design specifications or performance standards, 40 or it does not follow some material way from
35 http://injury.findlaw.com/product-liability/what-is-product-liability.html, 02/07/2013 23.15
"Unreasonably dangerous" refers to products that pose risks beyond what an average consumer would expect While this definition holds significant weight, it is not universally accepted Tort law acknowledges that certain beneficial products, like prescription drugs and vaccines, cannot be entirely risk-free These products are not deemed defective solely due to their inherent dangers; additional issues must be present Consequently, drug manufacturers are not held strictly liable for products that are properly made and include suitable instructions and warnings It is important to distinguish between design defects and manufacturing defects in this context.
37 Black's Law Dictionary 5th edition (1979), West Publishing
38 Mark A Kinzie, Christine F Hart (2001), above n 29, p.4
39 http://injury.findlaw.com/product-liability/what-is-product-liability.html, 05/07/2013 19.50
A manufacturing defect occurs when a product is not properly assembled, tested, or quality-checked by the manufacturer For example, a worker may inadequately tighten a bolt, or sub-par raw materials may be utilized Proving these defects is relatively straightforward, as consumers can reference the manufacturer’s own design or marketing standards to demonstrate that the product is defective.
Defects that are clearly identifiable often lead to courts imposing liability in negligence cases Additionally, tort law employs the principle of strict liability, enabling plaintiffs to seek recovery even without proving negligence on the part of the manufacturer.
A design defect refers to a flaw in a product's design that exists even when the product is manufactured according to its specifications For instance, a chair designed with only three legs may be deemed defectively designed due to its instability, while an automobile with a fuel tank positioned to explode upon low-speed impact illustrates a critical design flaw.
Design defect claims typically necessitate proof of negligence However, strict liability can be applied for a design deemed unreasonably dangerous if the plaintiff demonstrates the existence of a cost-effective alternative design that could have mitigated the risk of injury.
Marketing defects include labeling of products improperly, insufficient instructions, or the failure to warn consumers of product’s dangers 46 For example, tobacco companies
41 Mark A Kinzie, Christine F Hart (2001), above n 29
42 William M Pride (2013), Marketing 2014, 17th edition, Cengage Learning, p.135
43 http://injury.findlaw.com/product-liability/what-is-product-liability.html, 05/07/2013 20.25
44 See more at: http://www.biicl.org/files/1123_overview_uk.pdf, 06/07/2013 09.50
Design defects can lead to dangerous situations, posing unintentional risks to consumers Assessing the dangers associated with product design flaws is often a complex process.
45 http://injury.findlaw.com/product-liability/what-is-product-liability.html, 05/07/2013 20.35
Consumers have filed lawsuits against 14 for failing to provide adequate warning signs regarding the health risks associated with tobacco, which can lead to cancers and other diseases Additionally, a cough syrup has been criticized for not labeling potential dangerous side effects when combined with commonly used medications like aspirin.
In this type of defect, a negligent regarding a product or action in strict tort liability may also give rise to a marketing defect claim
1.3.2 Parties to a product liability action under the law of tort
1.3.2.1 The people having the right to claim for product liability (Potential claimants)
Consumers harmed by defective products have the right to seek compensation through product liability claims These claims can be filed by individuals, corporations, and other business entities Importantly, the plaintiff does not need to be the original purchaser of the product or have a direct relationship with the defendant to pursue a claim.
The meaning of the product liability in tort in the legal system
Product liability in tort serves as a crucial legal mechanism for safeguarding consumer rights, recognizing that consumers often find themselves at a disadvantage compared to manufacturers in terms of economic power and risk management This doctrine operates independently of any contractual relationship between consumers and manufacturers or distributors, establishing a legal framework that empowers consumers to seek redress for damages caused by defective products.
Product liability, particularly in tort law, significantly impacts manufacturers by holding them accountable for compensating customers harmed by defective products This responsibility incentivizes manufacturers to enhance technology and improve product quality, ultimately boosting their reputation and consumer trust Strict product liability regulations, which do not necessitate proof of the manufacturer’s fault, serve to eliminate low-quality products that may endanger consumers Additionally, these regulations foster competition among manufacturers, driving them to prioritize product quality and safety.
In today's rapidly developing economy, the need for effective product liability regulation is increasingly recognized globally Many developed nations have established their own product liability frameworks, while emerging countries like Vietnam are actively working to enhance their product liability institutions Implementing product liability in tort not only advances legislative efforts to create a legal framework that holds manufacturers accountable to consumers but also serves as a vital legal mechanism for safeguarding consumer rights and interests Although this concept has only recently emerged, it is crucial for fostering consumer protection.
72 Punitive Damages under Products Liability, Read more http://www.ea2020.org/punitive-damages-under- products-liability.pdf, 04/08/2013 13h55
73 Nguyen Thi Tuong Vi (2009), above n 16, p.20
20 th century, this product liability institution in tort is developed quickly in order to protect consumers in the most efficient way 74
The European Union’s Law on product Liability and some issues
The European Union’s Law on product Liability under the area of tort
2.1.1 Overview of product liability law in European Union
The European Union (EU) is a political and economic union that features a common market, shared currency, and unified legal policies Within the EU's common market, products legally manufactured in one member state can be sold in others without tariffs or duties, promoting the free circulation of goods and enhancing commercial opportunities However, challenges remain, particularly regarding the protection of consumer rights While each member country has regulations in place to safeguard consumers, the differing laws across nations create conflicts, complicating the enforcement of these rights.
Article 100 of Rome Convention in regard to EU’s foundation, set the enforcement of legal stipulation to regulate efficiently public matters, including protecting consumers 76
The Hague Convention of October 2, 1973, which was validated on October 1, 1997, established key definitions related to product liability, including terms such as product, damage, damaged party, and responsible party It specifies that the laws of the country where the damaged party resides will govern compensation for damages resulting from product liability This regulation has proven effective in addressing conflicts of law in such cases.
On January 27, 1977, the European Convention on Products Liability concerning Personal Injury and Death, known as the Strasbourg Convention 1977, was adopted This Convention emphasizes the liability of parties involved in the product supply chain for damages related to individual life and health, as outlined in Article 3.
75 Read more: http://useconomy.about.com/od/worldeconomy/p/european_union.htm, 04/08/2013 22.05
Article 100 of the Treaty of Rome, established on March 25, 1957, states that the European Parliament and the Economic and Social Committee must be consulted regarding directives that require legislative amendments in one or more Member States.
77 Nguyen Thi Tuong Vi (2009), above n 16, p.22-23
The Strasbourg 1977 Convention marked a significant advancement in product liability law within the European Community, laying the groundwork for subsequent regulations This foundational framework was further refined and expanded upon by Directive 85/374/EEC, which builds on the principles established in the Convention.
Before 1985, product liability laws varied significantly among European Community Member States, creating disparities that could hinder competition and obstruct intra-Community trade This inconsistency resulted in unequal consumer protection and differing responsibilities for producers across countries To address these issues, several proposals for a Directive on Product Liability were explored in the 1970s, culminating in the adoption of Directive 85/374/EEC by the Community.
1985 81 Directive 85/374/EEC also has discretionary clauses which allow the member countries to enforce more strict regulations in the Directive
2.1.1.2 Legal instruments governing product liability in European Union
EU’s Product liability matter is currently regulated by the following legal documents: 82
- Council Directive of 25 July 1985 on the approximation of the laws, regulations and administrative provisions of the Member States concerning liability for defective products (85/374/EEC)
- Directive 1999/34/EC of the European Parliament and of the Council of 10 May
1999 amending Council Directive 85/374/EEC on the approximation of the laws, regulations and administrative provisions of the Member States concerning liability for defective product
- Directive 98/27/EC of the European Parliament and of the Council of 19 May
1998 on injunctions for the protection of consumers' interests
78 Nguyen Thi Tuong Vi (2009), above n 16, p.23
79 For example, in France, the legal system imposed strict liability, whereas German and Greek law applied fault liability and English law was based on negligence
80 Pearson (1994), Law for European Business Studies, London, p.274
81 Council Directive of 25 July 1985 on the Approximation of the Laws, Regulations and Administrative Provisions of the Member States concerning Liability for Defective Products (85/374/EEC), OJ 1985, No L210/29
82 Nguyen Thi Tuong Vi (2009), above n 16, p.24
- Directive 2001/95/EC of the European Parliament and of the Council of 3 December 2001 on general product safety
- Council Regulation (EC) No 44/2001of 22 December 2000 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters
- Regulation (EC) No 864/2007 of the European Parliament and of the Council of
11 July 2007 on the law applicable to non-contractual obligations
This thesis will focus on analyzing Directive 85/374/EEC and its amendments under Directive 1999/34/EC, as they pertain to product liability within the European Community, while not delving deeply into other related regulations.
2.1.2 Basic content of product liability law under the law of tort in European Union
The Directive 85/374/EEC of EU proclaims strict liability as a regime for solving the problem relating to product liability The preface of the Directive starts by saying that
The approximation of laws among Member States is essential to prevent competition distortions and ensure the smooth movement of goods within the common market, while also providing a consistent level of consumer protection The article concludes that strict liability for producers is crucial in addressing the challenges posed by modern technological production, facilitating a fair distribution of risks Furthermore, the Directive implies strict liability in Article 4, stating that the injured party need only demonstrate the damage, defect, and causal link between them, without the necessity to prove fault.
The concentration will be focused upon the relevant rules of the law of tort and upon The Directive 85/374/EEC only
2.1.2.1 Principle and purpose of the Directive 85/374/EEC a Principle of the Directive 85/374/EEC
83 Joel González Castillo (2012), “Products liability in Europe and the United States”, Revista Chilena de Derecho, Vol.39 No.2, pp.277–296
Source: http://www.scielo.cl/scielo.php?pid=S0718-34372012000200003&script=sciarttext, 03/08/2013 08.55
The Directive is made up of the following elements:
The concept of strict liability places responsibility on producers to compensate victims without the need to prove fault This principle, recognized by the EU Directive, asserts that applying strict liability to manufacturers is essential for fully addressing product liability issues As technology advances and knowledge becomes more specialized, consumers face challenges in assessing latent risks associated with products Consequently, EU product liability law does not consider the manufacturer's fault, as lawmakers believe that strict liability is crucial for mitigating risks arising from modern production methods and technological progress.
- It places the burden of proof on the injured party insofar as the damage, the defect, and the causal relationship between the two is concerned;
The article establishes joint and several liability among all operators in the production chain, ensuring that injured parties have a financial guarantee for compensation of damages.
- It provides for exoneration of the producer when the producer proves the existence of certain facts explicitly set out in the Directive;
- It sets liability limitations in terms of time, by virtue of uniform deadlines;
- It sets illegality of clauses limiting or excluding liability towards the injured party;
- It sets a limit for financial liability; and
- It provides for a regular review of its content in the light of the effects on injured parties and producers b Purpose of the Directive 85/374/EEC
The Directive is promulgated to archive two main purposes:
- Ensuring consumer protection against damage caused to health or property by a defective product and protecting manufacturer, creating fairness in the market;
- Reducing the disparities between national laws
84 Helen Delaney and Rene van de Zande (2001), A Guide to the EU Directive Concerning Liability for Defective
Products (Product Liability Directive), p.2 Read more at http://gsi.nist.gov/global/docs/EUGuide_ProductLiability.pdf, 03/08/2013 09.15
2.1.2.2 Subject that take legal responsibility
Article 1 of the Directive says that the producer shall be liable for damage caused by a defect in his product This means liability, or the responsibility to pay for damages, is placed on the producer Article 3 defines the producer not only as the manufacturer of a finished product, but also as:
- The maker of any raw material or the manufacturer of a component part;
- Any person who, by putting his/her name, trademark or other distinguishing feature on the product, presents himself/herself as the producer( known as own-brander);
When the producer of a product cannot be identified, any supplier of that product is considered its producer, including in cases of imported goods where the identity of the importer is not disclosed, despite the producer's name being present The Directive specifies that suppliers and importers who disclose the identity of the actual producer or the source from which they obtained the product are exempt from liability for any injuries caused.
Any individual or entity that imports products into the Community for sale, hire, leasing, or any distribution method in their business operations, whether as an independent distributor or as a branch of a foreign manufacturer, is subject to relevant regulations.
Article 3 of Directive 85/374/EEC allows the damage party to take legal proceedings against anyone involved in the product distribution chain in order to get compensation for damage
When multiple parties are responsible for the same damage, they are held jointly and severally liable, giving the injured party the flexibility to choose which defendant to sue This decision can be based on factors such as the defendant's ease of suing, financial resources, or insurance coverage Subsequently, the defendant can pursue recourse against other liable parties.
86 The reason for this being to prevent the consumer from the inconvenience of attempting to pursue a claim against a foreign producer
The importer’s liability does not absolve the foreign manufacturer of responsibility; both parties are jointly and severally liable to the victim under the product liability laws of the member states.
88 http://legal-dictionary.thefreedictionary.com/Jointly+and+severally+liable 04/08/2013 17.55
Some issues on product liability in tort in Vietnamese law
2.2.1 Overview of product liability in tort in Vietnamese Law
Product liability in Vietnam is an emerging concept, as there is no dedicated law governing it Instead, various legal provisions address this issue across multiple laws Currently, Vietnam's legal framework lacks specific documents that directly regulate product liability, relying instead on the provisions outlined in the Law on Protection of Consumers’ Rights.
Since 2010, the Civil Code 2005 and various laws on product quality have established clear regulations regarding producer liability in Vietnam This framework for product liability has been progressively enhanced to better fulfill its role in safeguarding consumer rights.
Legal instruments governing issues relevant to product liability in Vietnam under the area of tort:
The Vietnamese Civil Code 2005, specifically Articles 604 to 630, outlines the provisions related to tort law and includes essential guiding regulations As the foundational legal framework, the Civil Code addresses the most prevalent legal issues concerning torts in Vietnam.
The Law on Products and Goods Quality 2007, along with its guiding regulations, marks a significant milestone as the first legislation specifically addressing the liability of individuals and business organizations operating within Vietnam This law establishes essential standards for product and goods quality, ensuring accountability and consumer protection in the marketplace.
2007 doesn’t present directly the definition of “product liability”, provisions of producer’s liability had already shown the basic factors of product liability
- The Law on Protection of Consumers’ Rights 2010 and its guiding regulations 126 This Law on Protection of Consumers’ Rights is a great achievement in developing and
This institution governs various aspects of liability for damage, including the grounds for liability (Art 604) and principles for compensation (Art 605) It addresses the capacity of individuals to compensate for damages (Art 606) and sets limitations on initiating lawsuits for damages (Art 607) Additionally, it covers damages resulting from property infringement (Art 608), health infringement (Art 609), life infringement (Art 610), and violations of honor, dignity, or prestige (Art 611) The institution also outlines the duration of compensation for damages related to life or health infringement (Art 612) and provides specific cases for compensation.
125 Resolution No 03/2006/NQ-HĐTP of the Supreme Court’s Committee of Judges on 08 July 2006 guiding on the application of some regulations of the Civil Code 2005 on Tort
126 Decree 99/2011/ND-CP Detailing and Guiding a number of articles of the Law on Protection of Consumer Rights
37 amending Vietnamese legal system in general and laws on protecting consumers in particular
The Commercial Law 2005, Competition Law 2005, Law on Standards and Technical Regulations 2006, and laws regarding administrative violations collectively establish the responsibilities of producers and traders in ensuring product safety for consumers Any breaches of these regulations may result in compensation for damages or administrative and penal sanctions.
Product liability remains an emerging issue within the Vietnamese legal framework, characterized by a lack of specific provisions Violations of consumer rights by product providers are prevalent, yet the absence of comprehensive laws on product liability hampers effective resolution of these violations Thus, examining Vietnamese legal provisions related to product liability is essential for advancing legislation in this area and enhancing consumer protection.
2.2.2 Product liability in the recent regulations of law
The Law on Protection of Consumers’ Rights 2010 marks a significant advancement in Vietnam's legislative framework for consumer protection A key feature of this law is its progressive provisions on product liability, including the introduction of strict liability While the law does not provide a specific definition of product liability, it establishes essential guidelines aimed at safeguarding consumer rights and enhancing accountability for product-related issues.
The 2010 legal provisions in Vietnam address limitations of previous laws by eliminating the "fault" factor from product liability cases, shifting the burden of proof away from consumers harmed by defective products This shift towards "strict liability," a standard adopted by many countries worldwide, aligns with Vietnam's goals for international economic integration and market openness This reform not only enhances consumer protection by easing their burden of proof but also incentivizes producers to prioritize safety in their products, thereby safeguarding the interests of all consumers.
2.2.2.1 Principle and purpose of product liability provisions a The principle of product liability under the law of tort in Vietnam
The principle may be presented through the following provisions:
Article 630 of the VCC 2005 holds individuals, legal entities, or other parties accountable for manufacturing or distributing goods that do not meet quality standards, resulting in harm to consumers Those found in violation of this regulation are liable for damages caused to any affected consumer.
Chapter V (Part 2) of the LPGQ outlines the key compensation principles related to product quality, detailing the mechanisms for paying damages and the various types of damages resulting from product quality failures It also addresses the compensatory responsibilities of manufacturers, importers, and sellers, along with the available defenses against such liabilities.
The Law on Protection of Consumers’ Rights 2010 outlines the rights and responsibilities of consumers, as well as the obligations of organizations and individuals involved in the trading of goods and services It also addresses the role of social organizations in safeguarding consumer rights and provides mechanisms for resolving disputes between consumers and trading entities Additionally, the law establishes the State's management responsibilities regarding consumer protection Furthermore, it emphasizes the importance of product liability within the framework of tort law in Vietnam.
Numerous codes and United Nations guidelines are designed to safeguard consumers from unfair practices in their dealings with corporations that hold a significant informational advantage.
Beside, provisions of product liability also protect fair competition on the market, which help improve the business operating of the corporations 127
2.2.2.2 Subject that take legal responsibility
Under Clause 2, Article 23 of the Consumer Rights Protection Law, a compensating organization includes any entity or individual involved in the trade of goods, such as: a) producers of the products; b) importers of the products; and c) those who brand the products or utilize labels and commercial instructions that identify the respective organizations or individuals.
127 http://www.luatviet.org/Home/phap-luat-va-cuoc-song/2010/9126/Can-quy-dinh-mot-cach-toan-dien-ve-che- dinh-trach-nhiem.aspx, 03/08/2013 15.25
39 producing, importing products; d) Organization, individual providing defective products directly to consumer in case it is impossible to determine the right organization, individual to compensate for damage
Under the LPGQ, the liability for damages is imposed on producers, importers, sellers when they do not ensure the quality of their products, causing damage to buyers or consumers 128
Article 61 of the LPGQ establishes that producers and importers are responsible for damages if the quality of their products is compromised due to their fault, resulting in harm to buyers or consumers Additionally, sellers are also held liable for damages under similar circumstances when the quality of their products fails to meet standards, leading to damage for buyers or consumers.
Compensation shall be paid according to agreements between involved parties or court decisions or arbitral awards 131
Some experience for Vietnam from studying the product liability
Comparative comments on product liability in Vietnamese Law and
The product liability law in Vietnam has undergone significant amendments since the implementation of the Law on Protection of Consumers’ Rights in 2010 These updates are informed by the experiences of developed countries, particularly those within the European Community As a result, the current Vietnamese product liability legislation shares many similarities with European laws, while also reflecting unique differences shaped by Vietnam's economic, social, cultural, and legislative contexts.
Vietnamese law and EU law both impose strict tort liability for consumers harmed by defective products However, the Vietnamese legal system lacks a specific document defining product liability, resulting in fragmented regulations across various legal texts This inconsistency creates challenges in practical application In contrast, the EU's legal framework effectively safeguards consumer interests regarding product liability.
Vietnamese law establishes product liability for organizations and individuals involved in the trading of products and goods, including producers, importers, exporters, and wholesalers This framework aligns with the principles of Directive 85/374/EEC of the European Community regarding the chain of entities responsible for product liability However, the specific legal provisions outlining the responsibilities of each party in the product supply chain in Vietnam are less detailed compared to those in the EU directive Additionally, while EU law includes regulations on joint and several liabilities, such provisions are absent in Vietnamese legislation.
The remarkable distinction between Vietnamese and EU’s law on the notion of products is that ‘products’ in Vietnamese law contain services, while in EU’s law, service
In Vietnamese law, the definition of 'products' is ambiguous and lacks the specificity found in EU law, particularly regarding intangible products, which are not explicitly excluded from the product scope in Vietnam In contrast, EU law clearly delineates the boundaries of what constitutes a product.
Vietnamese law typically necessitates an illegal act or omission, while EU law emphasizes the defectiveness of products This distinction makes the EU's approach more suitable for addressing issues of product liability.
The causal relationship is a crucial aspect in both Vietnamese and EU laws, though the specifics differ regarding illegal acts and product defects In Vietnamese civil law, the focus is on establishing a causal link between an illegal act or omission and the resulting damage to impose tortious liability Conversely, EU law requires proof of a causal relationship between damage and defective products.
Vietnamese law and EU law share a notable similarity regarding grounds for product liability in tort, particularly in the recognition of damage While both legal systems define types of damage in a comparable manner to Directive 85/374/EEC, Vietnamese law lacks specific regulations on minimum and maximum damage limits Additionally, non-material damage, pure economic loss, and business loss are explicitly excluded from the EU Directive, whereas the Vietnamese Civil Code of 2005 addresses these issues under clause 2, Article 609.
Despite removing the "fault" factor, which aligns Vietnam's product liability framework with a strict liability model for trade organizations and individuals, the current law still lacks provisions allowing consumers to claim damages against any parties in the product supply chain, unlike the European Community's strict liability regulations.
Under Article 11 of Directive 85/374/EEC, EU law establishes a 10-year prescription period for product liability, placing responsibility on producers This contrasts with the limitation periods set by Vietnamese law and regulations in other countries, highlighting significant differences in legal frameworks regarding product liability across jurisdictions.
161 Pham Thi Phuong Anh (2009), above n 1, p.28
50 producer to implement their liability, but have no regulation on limitation period releasing them from their liability 162
Both EU and Vietnamese laws share similar grounds for product liability; however, EU law places a stronger emphasis on regulation In contrast, product liability in Vietnam is relatively new and is addressed across various legal documents, often intertwined with consumer protection issues.
Some experience for Vietnam from studying product liability law in EU 50
Focusing on product liability regulation enables the European Commission to foster a responsible trading environment while effectively safeguarding consumer interests Early enforcement of product liability provisions enhances the efficiency of necessary amendments and updates based on practical needs As Vietnam develops its product liability laws, it is crucial to study the regulations of developed countries, including those of the EU.
The European Commission's provisions on product liability are effectively unified and have been adequately integrated into the national laws of member countries, leading to significant changes and harmonization in this area The flexibility of these provisions allows member states to tailor their legal development according to their specific needs In contrast, Vietnam's product liability laws lack coherence and unity, resulting in a fragmented regulatory framework Consequently, European law serves as a valuable model for Vietnam to consider in its legal reforms.
The European Community (EC) has established clear and detailed provisions regarding product liability, covering essential aspects such as the scope of subjects, product definitions, and time limitations The EC Directives offer broad concepts, allowing member countries the flexibility to address specific issues, including compensation amounts for damages This adaptability ensures that EC laws are tailored to the unique characteristics of its legislative framework Additionally, the EC's provisions on dispute resolution related to product liability are precise, aiding member states in resolving legal conflicts effectively.
163 Ngo Thi Ut Quyen (2012), above n 112
The strict laws on consumer protection and product liability in the European Community provide a significant advantage for consumers, making it easier for them to pursue legal action against producers in cases of product-related harm As a result, European consumers enjoy a high level of protection, ensuring their rights are effectively safeguarded.
Some proposal to improve product liability in Vietnamese law
The protection of consumer interests in Vietnam is primarily the responsibility of the State and society, yet enforcement of consumer protection laws by Vietnamese corporations remains inadequate compared to international standards This has resulted in the prevalence of low-quality products that pose significant health risks, such as soy sauce containing 3-MPCD, a potential carcinogen, and Chinese milk tainted with melamine, which has led to kidney stones in 300,000 children Despite existing legal provisions for food safety and hygiene, effective implementation is challenging due to difficulties in inspection and management, allowing violations to occur frequently.
Despite recent legal provisions in Vietnam aimed at enhancing consumer protection and product liability, significant gaps remain that necessitate further amendments To better safeguard consumer rights and interests, it is essential to implement comprehensive measures, including unified approaches across legislation, enforcement, and judicial processes Additionally, the involvement of social and political organizations is crucial in addressing these issues effectively.
Recognizing the critical role of consumer protection in economic development, the State should prioritize safeguarding consumer interests as a vital strategy for growth Enhancing product liability laws is essential for successful international integration and requires strategic investment in legal reforms It is important to elevate the status of product liability within the Vietnamese legal framework, as current regulations are scattered across various laws Thus, amending these legal foundations is crucial for fostering a more cohesive and effective approach to product liability in Vietnam.
164 Ngo Thi Ut Quyen (2012), above n 112
165 http://www.spsvietnam.gov.vn/Lists/Tin%20tc%20Vit%20Nam/DispForm.aspx?IDs, 06/08/2013 23.55
The amendment of laws related to consumer protection must be systematic and unified across the entire legal framework, encompassing not only consumer protection laws but also civil law, criminal law, product quality regulations, and civil procedure law.
The development of product liability laws is evolving by drawing insights from international practices, making it essential to create independent legal documents that govern product liability Current provisions must address existing shortcomings, including the establishment of a cohesive and comprehensive legal framework, the regulation of unaddressed issues, and the need for clearer and more specific guidelines This approach aims to support all stakeholders involved without causing unnecessary complications.
3.3.2 Some specific proposals in legislating product liability law in Vietnam
Some proposals in legislating product liability law, on the basis of studying European law in particular and other developed countries in general
Vietnam's current product liability law is fragmented across various legal documents, resulting in conflicting provisions that complicate practical application While the 2010 Law on Protection of Consumers’ Rights has addressed several limitations of previous regulations, determining which legal documents to apply remains a significant challenge Therefore, resolving these conflicts in product liability provisions is essential for establishing a more effective legal framework.
Beside, it is recommended that The LPGQ should not separate ‘products’ and
‘goods’ because goods are products per se Because most countries utilize ‘product liability’ to name the liability imposed on those who are concerned with the supply of
The amendment of the Civil Code regarding compensation for damages outside of contracts requires a focused approach, particularly concerning time limitations and the types of compensable damages While the current Civil Code adequately outlines various compensable damages, a more effective method for determining compensation amounts is needed Additionally, the Code lacks provisions for damages that accumulate over time and those that are difficult to quantify for individuals, despite scientific evidence supporting the existence of potential harm.
167 Ngo Thi Ut Quyen (2012), above n 112
53 products The term ‘product liability’ should also be used in Vietnam This concept will assist Vietnam in international trade 168
The Government should implement legal measures to clearly define the concept of products, specifically excluding intangible products, to facilitate easier transactions for Vietnamese individuals and businesses Additionally, it is essential to consider proposals that grant consumers the right to sue all parties involved in the production, trade, and provision of products It should be clearly stated that those responsible for causing damage must compensate the petitioner for costs incurred, including transportation, time spent on the lawsuit, and legal fees Furthermore, the lack of clear regulations regarding the joint liability of these parties allows for the evasion of responsibility, leaving consumer interests inadequately protected.
To effectively protect consumers' rights, it is essential to establish a collaborative framework that enables organizations, institutions, and individuals to work together, as this issue requires the active involvement of the entire society.
Enhancing the accountability and effectiveness of legal enforcement agencies is essential, alongside fostering the responsibility of trade organizations and individuals Additionally, improving consumer awareness regarding self-protection measures is crucial for a more robust marketplace.
To enhance consumer protection, it is essential to empower legal and administrative bodies, including the People’s Court and authorized consumer protection agencies These entities must work collaboratively with specialized organizations responsible for inspecting and supervising trade practices Timely identification and strict enforcement against violations, particularly those affecting product safety and quality, are crucial Furthermore, authorized agencies should actively communicate with the media, disseminating information about legal violations and product quality issues to ensure public awareness and accountability.
To enhance consumer protection, it is essential to strengthen the legal framework governing producer liability and to enforce strict penalties for corporate violations Producers must acknowledge their responsibility to maintain high-quality standards and adhere to regulations that safeguard consumer interests.
168 Pham Thi Phuong Anh (2009), above n 1, p.28
To enhance product quality and meet consumer needs, it is essential to adhere to 54 product standards while investing in modern scientific advancements and technology This approach aims to minimize risks and defects in production Producers must implement effective strategies to proactively address potential risks and ensure timely resolutions for consumers Additionally, they are obligated to uphold strict liability for any damages caused by defective products.
To empower consumers effectively, it is essential to implement comprehensive legal education that informs them about their rights, particularly the right to complain and seek compensation Additionally, promoting consumer knowledge and facilitating the formation of voluntary consumer associations will enhance protection and advocacy for consumer interests.
To enhance product liability laws in Vietnam, key proposals emphasize the need for thorough research and reasoning Effective consumer protection and the establishment of a robust product liability framework require the commitment of authorized bodies, as well as the shared responsibilities of both consumers and producers.