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EU law on defective products: essential aspects of producers' responsibility.

1. Introductory comments

In response to the provocations of approximation of legislation in the field of consumer rights, especially those related to products' safety and warranties in the frame of the European Union's law, recent research has sought to explore the essential aspects of producers' responsibility for physical injury and economic harms caused to consumers by defective products. (1) In general, previous studies have revealed the importance of the three main causes of producer's exoneration (victim's fault, non commercial purpose of distribution, compliance to imperative legislation in force) in the economy of the type of liability in discussion. For instance, one stream of research has found that producer's liability is not to be retained in cases when victims have negligently ignored instructions in the use of product, while the informational default represents, on the contrary, one of the aggravating circumstances of manufacturer's responsibility. (2) A second body of literature, which focuses on general paradigms of responsibility related to contracts concluded by consumers, found that inexistence of a contractual bound between the producer and the victim of the defective product represents no exclusion of manufacturer's liability, as the type of the civil responsibility discussed covers damages caused to direct contractual partners, as well as prejudice caused to consumer's family members, to non contractual, occasional users of the product concerned or to innocent passengers. (3) A third group of studies investigated the effects of non liability clauses on the essential duties generated by contracts concluded between professionals and consumers. (4) Generally, these studies found that an exonerating clause is not efficient in cases when attempting to extirpate from the contractual body one of the essential elements of the contractual object.

While previous research has attempted to determine whether damages due to defects of design should be treated differently from prejudice caused by information defects, such as the absence form the product prospect of important interference or limits of use, the extent to which criteria such as consumer's legitimate expectations, on one hand and foreseeable use of product, on the other hand remains unknown. This is an important gap in the literature because, realistically, these criteria do not operate in isolation. Indeed, a prominent aspect of civil liability for defective products is that the criterion used to delimitate between safe and defective products circumstantiates producers' responsibility for damages caused to the extent to which only foreseeable use of product may be used as background for liability; however, due to the antagonistic substance of the two criteria proposed by legal practice (foreseeable use of product against legitimate expectations of consumer), the larger extent of the second criterion may be used as argument for its generalization. Thus, to determine if liability limits, such as misuse of product by the victim and assumed risks play a decisive role in establishing manufacturers' responsibility, the current study seeks to determine the relative explanatory power of each liability factor by examining all these factors simultaneously.

Further, recent legal theory does not place equal emphasis on all associations among the variables implied by the risk--utility balance, in the case of defective products. By assessing the role played by foreseeable use of product in the sphere of unsafe character of products, we provide arguments as to the relative strength of each variable as a predictor of producer's responsibility. In addition to examining simultaneously the relative effect of each juridical variable, the present study extends prior research in the field of "manufacturing defects--design defects" dichotomy, as manufacturing flaws benefit form the existence of a safety standard (represented by non defective products, manufactured as intended on a regular basis), while design defects do not; therefore, the approach proposed is successful in dissociating manufacturers' conduct (negligence) on manufacturing process form negligent / hazardous design causing a physical injury.

Finally, research pertaining to use of non safe products typically addresses the differences between substantial defects and information defects. Thus, we strictly focused our research efforts on underlining that, in the field of products safety, the "unsafe for consume" character may result both from the lack of information offered to consumers by the producer or the distributor, on the potential risks associated to consume and from the disproportionate character of the implied risks, in comparison with the benefits attributed to consume.

Producers' responsibility for physical injury and economic harms caused to consumers by defective products has been regulated at the European Union's level by Directive 85/374 /EEC of the European Parliament and of the Council of 25 July 1985 on the approximation of the laws, regulations and administrative provisions of the Member States concerning liability for defective products, modified and completed by Directive 1999/34/EC of the European Parliament and of the Council, transposed in the Romanian legal system by Law 240/2004 on producers' responsibility for damages generated by defective products, modified by Law 363/2007 on repressing illegal commercial practices in contracts concluded by consumers and the harmonization of national law and the European Communities Law in the field of consumers' protection; thus, for the purpose of the current study, these are the legal provisions we will be referring to, while analyzing the essential aspects and criteria for producer's responsibility in the field of damages caused by products presenting defects attributed to the manufacturing process.

2. Distinguishing physical injury (a) and economic harms (b)

From the angle of Romanian Consumer Law, in cases when the defective product merely damaged itself, the plaintiff is not allowed to seek damage relief on the grounds of the producers' responsibility for consume safety, in terms of Law 240/2004 on producers' responsibility for damages generated by defective products, modified; the only option remains invoking vendor's warranty for products conformity, as regulated by Law 449/2003 on sales of products and associated warranties, transposing in national law Directive 1999/44/EC of the European Parliament and of the Council of 25 May 1999 on certain aspects of the sale of consumer goods and associated guarantees. It should be noted that the later European act has been recently modified by Directive 2009/22/EC of the European Parliament and of the Council of 23 April 2009 on injunctions for the protection of consumers' interests (Codified version); according to Article1, the purpose of this Directive is to approximate the laws, regulations and administrative provisions of the Member States relating to actions for an injunction referred to in Article 2 aimed at the protection of the collective interests of consumers included in the Directives listed in Annex I, with a view to ensuring the smooth functioning of the internal market; for the purposes of this Directive, an "infringement" means any act contrary to the Directives listed in Annex I as transposed into the internal legal order of the Member States which harms the collective interests of consumers referred to in paragraph 1 of the legal text cited. Also it should be underlined that, under the terms of modified Directive 85/374 /EEC, "damage" means: (a) damage caused by death or by personal injuries; (b) damage to, or destruction of, any item of property other than the defective product itself, with a lower threshold of 500 euros, provided that the item of property is of a type ordinarily intended for private use or consumption and was used by the injured person mainly for his own private use or consumption.

The mentioned legal provisions operating in Romanian Consumer Law are obedient to modified Directive 85/374 /EEC provisions on material sphere of incidence set for producer's liability: while non setting minimal pecuniary limits for physical injury (as, usually, these damages surpass the sum of 500 euros), the regulation respects the European limit of 500 euros for patrimonial losses due to unsafe products, intended to avoid courts dealing with a large number of trials on small damages which may be recovered by using traditional judicial means (classical liability actions).

Adequate protection of the consumer requires compensation for death and personal injury, as well as compensation for damage to property; nevertheless, whereas the latter are limited to goods for private use or consumption (1) and are subject to a deduction of a lower threshold of a fixed amount of 500 euros (2), in order to avoid litigation in an excessive number of cases, the Directive provisions do not prejudice compensation for pain and suffering and other non-material damages payable, where appropriate, under the law applicable to the case.

3. What is <<defective>>?

Legal theory and practice on manufactures' responsibility retained that a product is "defective" when it does not provide the safety which a person is entitled to expect, taking all circumstances into account, including: (a) the presentation of the product; (b) the use to which it could reasonably be expected that the product would be put; (c) the time when the product was put into circulation. (5) However, a product is not considered defective for the sole reason that a better product is subsequently put into circulation (as stated by Article 6 of Directive 85/374/EEC on the approximation of the laws, regulations and administrative provisions of the Member States concerning liability for defective products, modified). Directive provisions where conceived to protect the physical well-being and property of the consumer, stating that the defectiveness of the product should be determined by reference not to its fitness for use, but to the lack of the safety which the public at large is entitled to expect, whereas the safety is assessed by excluding any misuse of the product not reasonable under the circumstances.

Whereas products age in the course of time, higher safety standards being developed and the state of science and technology progressing (moral and / or material aging of product), it has been held unreasonable to make the producer liable for an unlimited period for the defectiveness of his product; therefore, the liability in discussion expires after a reasonable length of time, that is a period of 10 years since the commercial launch of each lot of products on the market. As underlined by specialized doctrine, consumers dispose of a 3 years period form the manifestation of the defect for the preparation of trial and the introduction of a judicial action against the producer; however, the 3 years term is to be calculated between the borders of the 10 years period of safety warranty. According to Articles 10 and 11 of Directive 85/374/EEC on the approximation of the laws, regulations and administrative provisions of the Member States concerning liability for defective products, modified, Member States were called to provide in their national legislation that a limitation period of three years applies to proceedings for the recovery of damages and that the limitation period begins to run from the day on which the plaintiff became aware or should reasonably have become aware of the damage, the defect and the identity of the producer. On the other hand, Member States were called to provide in their legislation that the rights conferred upon the injured person pursuant to the mentioned Directive are extinguished upon the expiry of a period of 10 years from the date on which the producer put into circulation the actual product which caused the damage, unless the injured person has in the meantime instituted proceedings against the producer, therefore suspending the rolling of the 10 years term.

4. Types of defects: (a) manufacturing defects, (b) design defects and (c) information defects

A closer look at the development of producer's liability criteria reveals the existence of a fundamental distinction of three types of defect, delimiting those imputable to a manufacturing flaw form those due to a defective design or to insufficient / inadequate warning. Manufacturing defects describe an accidental flaw in the manufacturing process, usually non perceivable by producer's representatives (e.g. engine defects, engine imperfections, accidental misconstruction of one component). Manufacturing flaws are therefore easily measured against like products (safe products, manufactured as intended); in other words, in these cases, aberrations of manufacturing may be tested against the norm to determine whether a product is defective.

As to design defects, courts and authors have struggled with the concept of what constitutes defective design of a product, as in opposition to manufacturing products, where a safety standard already exists (represented by non defective products, manufactured as intended on a regular basis), design defects do not benefit form an objective / alternative standard. Originality or unique character of design usually complicates analyzes, as the courts weigh non homogenous factors, such as product functions, aesthetical aspects or presence of alternative design on the market. In addition, it is in the field of defective design that producers may be exonerated on the basis of the "risk of development" concept, as the producer may free himself from liability if he proves that the state of scientific and technical knowledge at the time when he put the product into circulation was not such as to enable the existence of a defect to be discovered [Article 7 (e) of Directive 85/374 /EEC, modified].

In the field of the producers' responsibility for the prejudice caused by the consume of a pharmaceutical product presenting a manufacturing defect, the product concerned may be declared "unsafe for human consume" simply if the risks resulting form its utilization are excessive, even if mentioned on the medicine prospect, only medicine representing the sole cure for a serious disease being excepted form the application of the mentioned rule. Additionally, it should be underlined that, in the field of pharmaceutical products safety, the "unsafe for consume" character may result both from the lack of information offered to consumers by the producer or the distributor, on the potential risks associated to consume and from the disproportionate character of the implied risks, in comparison with the benefits attributed to the consume of medical drug, as regulated by Directive 2001/83/EC of the European Parliament and of the Council of 6 November 2001 on the Community code relating to medicinal products for human use.

Producer's failure to warn consumers on risks and precautions is usually seen as a third type of defect, in addition to manufacturing defects and defects due to design. Therefore, a product may be found to be unsafe due to an information defect, understood as inadequate warning of inherent dangers. For instance, as mentioned above, in the perimeter of pharmaceutical products, warning considerations are generally inextricable, from the angle of producer's liability for damages caused, as whether the product instructions contained adequate warning or not, as well as nature, explicit character and sufficiency of the warning are relevant to the issue of establishing producer's responsibility and delimiting unreasonably dangerous products from safe for consume ones.

5. Proving a << defect >>: burden and means of proof

According to article 7 of Directive 85/374/EEC on the approximation of the laws, regulations and administrative provisions of the Member States concerning liability for defective products, the producer is not to be held responsible for the damage if he proves, alternatively: (a) that he did not put the product into circulation; (b) that, having regard to the circumstances, it is probable that the defect which caused the damage did not exist at the time when the product was put into circulation by him or that this defect came into being afterwards; (c) that the product was neither manufactured by him for sale or any form of distribution for economic purpose nor manufactured or distributed by him in the course of his business; (d) that the defect is due to compliance of the product with mandatory regulations issued by the public authorities; (e) that the state of scientific and technical knowledge at the time when he put the product into circulation was not such as to enable the existence of the defect to be discovered; (f) in the case of a manufacturer of a component, that the defect is attributable to the design of the product in which the component has been fitted or to the instructions given by the manufacturer of the product.

It should be noted that, if the non commercial purpose of producer's voluntary launch of the product exonerated the manufacturer for damages caused to third parties by a defective product, as well as the victim's fault, the producer is not however exonerated by a third party interference, as long as the victim is able to prove the existence of a defect (presumed to be due to the manufacture process); for instance, a medical fault (negligent prescription of a association of pharmaceutical products, by a physician or a pharmacist, causing the aggravation of patient's illness) does nor exonerate the producer, in the presence of a defective medicinal product, though doubling the remedies for the damaged consumer, also able to pursue legal actions based on the malpraxis case, along with those based on the Directive 85/374/EEC provisions.

As mentioned above, Directive 85/374/EEC provisions expressly establish that, without prejudice to the provisions of national law concerning the right of contribution or recourse, the liability of the producer is not reduced when the damage is caused both by a defect in product and by the act or omission of a third party. However, the liability of the producer may be reduced or disallowed when, having regard to all the circumstances, the damage is caused both by a defect in the product and by the fault of the injured person or any person for whom the injured person is responsible. In our opinion, the cited Directive provisions are meant to set pertinent borders for producers' liability, regarding victim's conduct: negligent use of product by the victim himself or herself is not excusable, while third party's intervention (for instance, negligent transport or deposit of products by a distributor) does not exonerate per se the manufacturer, the producer still having to prove the inexistence of a manufacturing, design or information defect, along with the proof of a third party negligence.

6. Setting criteria: consumer's legitimate expectations (a) and foreseeable use of product (b)

One important test used by courts in practice, in order to establish the unreasonably unsafe character of a product (its relation to the plaintiff's injury) was the legitimate expectations of the consumer criterion. The mentioned test may be described as assessing a product as "dangerous" or "defective" when it does not meet normal, typical expectation of the ordinary consumer who purchased is, using as criteria the ordinary knowledge about that product, common to the community, as to the normal characteristics of the product in case. In practice, consumers do not expect products to exceed the safety technology available at the time of the purchase. In comparison to the foreseeable use of product, on the other hand, the consumer's legitimate expectations represent a much larger criterion, insofar that even when respecting the use of product intended by the manufacturer, the consumer is legitimate to expect safe consume in cases when no supplementary warning does not accompany the product label / instructions or its technical prospect.

However, the consumer's expectations criterion has been held to be inadequate or even irrelevant in hypotheses when an ordinary consumer is unable to form clear expectations regarding danger implied by the use of the product, due to certain highly technical characteristics of the product or to the fact that the product was newly developed or recently launched on the market as innovation in its field. It is mostly in such circumstances that authors and judges prefer an alternative standard, that of the risk-utility balance, which determines whether the benefits of the product are or not unreasonably surpassed by the inherent risks of the design preferred by the manufacturer.

7. Establishing the risk--utility balance

The risk--utility balancing refers to the fact that a product may be found defective even in cases when it meets consumer's expectations of safety, so long as the risks implied by the consume outweighs the benefits; usually, the mentioned criterion covers the design defects and not the manufacturing flaws. As underlined above in the field of medical drugs, unreasonable risks compromise the safe for consume character of a product insofar that it permits the victim to place the burden of the patrimonial loss on manufacturer's shoulders, as the later chose to put on the market a product the design of which he knew to generate exaggerate risks, in comparison to the modest benefits of the product; in other words, in such cases, the manufacturer knew the risks in advance and chose to accept it, which justifies the courts' decisions that the producer bear the consumer's loss. At the EU's level, it has been the case of Thalidomide, a medicine thought to fight cold and fever, the administration of which to pregnant women caused childbirth with serious malformations and the benefits of which were clearly surpassed by the enormous, unjustified risk of the consume.

To sum up, form the risk-utility balance analysis, a product is defectively designed if its inherent danger outweighs its utility; for instance, a manufacturer may be hold responsible under the mentioned criterion if he rejected a design that might have prevented the plaintiff's injury, favoring in the manufacturing process an more inefficient or hazardous design for being less costly.

8. Hierarchical responsibility

Adequate protection of the consumer against non safety use of products requires that all producers involved in the production process should be made liable, in so far as their finished product (a), component part (b) or any raw material supplied by them (c) was defective; whereas, for the same reason, liability relies not only on manufacturer's shoulders (1), but is extend to importers of products into the Community (2) and to persons who present themselves as producers by affixing their name, trade mark or other distinguishing feature or who supply a product the producer of which cannot be identified (3). It is in the area of personal sphere of liability for unsafe products that it should be accentuated the hierarchical approach of the civil responsibility involved, as modified Directive 85/374/EEC provisions establish the priority of manufacturers' liability; therefore, consumers are allowed to direct their judicial actions against importers, respectively against manufacturers representations into the Community only in cases when the producer's identity remains unknown.

9. Concluding remarks

Though not neglected by the specialized literature, the problem of producer's responsibility for damages caused to consumers by defective products, as reflected by EU legislation in force, has the capacity of raising controversies over the delimitation of safety standards in cases when the alleged defect resides in the intended design of the product, rather than in an unintended manufacturing flaw. In such cases, it is important to underline that, while a manufacturing defect results from an error in the manufacturing process, so that the product was not manufactured as intended, the design defect is merely generated by the use of an unsafe design, usually established by the use of the risk--utility balance criterion (when the risks implied by the consume of a product outweighs its benefits).

On the other hand, in the hypothesis of a manufacturing flaw, the defectiveness of a product may be established by evaluating the effectiveness of the product against the producer's own manufacturing standards, in order for its suitability for consume to be asserted. As noted above, a product may be considered unsafe for consume notwithstanding that it has been produced exactly as intended by the manufacturer, when the defect alleged by the victim resides in the design intended itself. Since the development, at the EU's level, of a special judicial regime for consumers' actions against producers, based on the later liability, as described by the modified Directive 85/374/EEC, courts have used a number of criteria to establish the existence of producer's responsibility for damages caused for unsafe products. Therefore, an analysis of the riskutility balance, of the consumer's legitimate expectations criterion and of the foreseeable use of product test reveals its importance in the field of establishing the unreasonable dangerous character of a product, accentuating the fact that, in accordance to the European legal provisions cited above, the product must be "defective", not simply dangerous to some extent, in order for the product's liability to be retained.

Bibliography

[1.] Apan, Rodica Diana (2007), Protectia juridica a consumatorilor. Creditul destinat consumului si domeniile conexe, Cluj-Napoca: Sfera juridica.

[2.] Beauchard, Jean (1996), Droit de la distribution et de la consommation, Paris: Presses Universitaires de France.

[3.] Calais-Auloy, Jean; Steinmetz, Frank (2000), Droit de la consommation, Paris: Dalloz.

[4.] Calais-Auloy, Jean (1994), "L'influence du droit de la consommation sur le droit civil des contrats" in Revue trimestrielle de droit civil, no. 2, 239-240.

[5.] Corgas-Bernard, Cristina (2005), "Conditions de recevabilite de l'action en suppression de clauses abusives" in La Semaine juridique, no. 46, 2113-2116.

[6.] Fauvarque-Cosson, Benedicte (2007), "Quelle protection des consommateurs pour demaina" in Recueil Dalloz, no. 14, 956-960.

[7.] Girolami, Matilde (2006), "I criteri di conformita al contratto fra promissio negoziale e determinazione legislativa nel sistema dell'art. 129 del Codice del consumo" in Rivista di diritto civile, no. 2, 227-281;

[8.] Guyon, Yves (1996), Droit des affaires, Paris: Economica.

[9.] de Matos, Anne-Marie (2001), Les contrats transfrontaliers conclus par les consommateurs au sein de l'Union Europeenne, Marseille: Presses Universitaires d'Aix-Marseille.

[10.] Paisant, Gilles (1993), "Essai sur la notion du consommateur en droit positif" in La Semaine juridique, no. I, 3655.

[11.] Paisant, Gilles (2007), "Les clauses abusives dans les contrats de vente de vehicules automobiles neufs" in La Semaine juridique, no. 14, 29-33.

[12.] Picod, Yves; Davo, Helene (2005), Droit de la consommation, Paris: Armand Colin.

[13.] Piedelievre, Stephane (2008), Droit de la consommation, Paris: Economica.

[14.] Raymond, Guy (2008), Droit de la consommation, Paris: Litec.

[15.] Scoditti, Enrico (2006), "Regole di efficacia e principio di correttezza nei contratti del consumatore" in Rivista di diritto civile, no. 1, 119126.

[16.] Serinet, Yves Marie (2007), "La descendance ambigue de Chronopost: l'arret Faurecia" in La Semaine juridique, no. 15, II., 10063.

[17.] le Tourneau, Phillippe; Cadiet, Loic (2000), Droit de la responsabilite et des contrats, Paris: Dalloz.

[18.] Vasilescu, Paul (2006), editor, Consumerismul contractual. Repere pentru o teorie generala a contractelor de consum, Cluj-Napoca: Sfera juridica.

Juanita Goicovici *

* Juanita Goicovici, PhD is Teaching Assistant at the Faculty of Law, Babes-Bolyai University of Cluj. Her main area of interest is "Consumer's Protection" and related topics. The research is conducted within the project "The Retractability of Consent. Paradigms for a General Theory of the Potestative Rights of Retract". Acknowledgement: This work was supported by CNCSIS-UEFISCSU, project number PN II-RU 396/2010. E-mail: jgoicovici@yahoo.com.

See, for further details, Rodica Diana Apan, Protectia juridica a consumatorilor. Creditul destinat consumului si domeniile conexe, Cluj-Napoca: Sfera juridica, 2007, pp. 232-266; Benedicte Fauvarque-Cosson, "Quelle protection des consommateurs pour demaina" in Recueil Dalloz no. 14, 2007, p. 956-960; Matilde Girolami, "I criteri di conformita al contratto fra promissio negoziale e determinazione legislativa nel sistema dell'art. 129 del Codice del consumo" in Rivista di diritto civile no. 2, 2006, pp. 227-281; Enrico Scoditti, "Regole di efficacia e principio di correttezza nei contratti del consumatore" in Rivista di diritto civile no. 1, 2006, pp. 119-126.

(2) Stephane Piedelievre, Droit de la consommation, Paris: Economica, 2008, pp. 456-468; Guy Raymond, Droit de la consommation, Paris: Litec, 2008, pp. 69-75.

(3) For detailed comments, see Paul Vasilescu (ed.), Consumerismul contractual. Repere pentru o teorie generala a contractelor de consum, Cluj-Napoca: Sfera juridica, 2006, pp. 34-56.

(4) Further arguments are provided by Yves Marie Serinet, "La descendance ambigue de Chronopost: l'arret Faurecia" in La Semaine juridique no. 15, 2007, p. 10063; Phillippe le Tourneau, Loic Cadiet, Droit de la responsabilite et des contrats, Paris: Dalloz, 2000, p. 1135.

(5) See for justification Guy Raymond, op. cit., p. 75.

(6) For that purpose, see Stephane Piedelievre, op. cit., p. 468; Yves Picod, Helene Davo, Droit de la consommation, Paris: Armand Colin, 2005, pp. 199-214. By assessing the role played by foreseeable use of product in the sphere of unsafe character of products, arguments can be provided as to the relative strength of each variable as a predictor of producer's responsibility. While manufacturing flaws benefit form the existence of a safety standard (represented by non defective products, manufactured as intended on a regular basis), design defects do not.

(7) Specialized literature typically addresses the differences between "substantial defects" (defects due to the manufacturing process or to the product conception) and "information defects" (consumers' mislead, intended or negligent, by the use of incomplete information); see, for further analyses, Stephane Piedelievre, op. cit., pp. 456-458; Guy Raymond, op. cit., pp. 69-72.

(8) See, for further explanations, Phillippe le Tourneau, Loic Cadiet, op. cit., p. 1225; Gilles Paisant, "Essai sur la notion du consommateur en droit positif" in La Semaine juridique no. I, 1993, p. 3655; Gilles Paisant, "Les clauses abusives dans les contrats de vente de vehicules automobiles neufs" in La Semaine juridique no. 14, 2007, pp. 29-33; Anne-Marie de Matos, Les contrats transfrontaliers conclus par les consommateurs au sein de l'Union Europeenne, Marseille: Presses Universitaires d'Aix-Marseille, 2001, pp. 115-118.

(9) Jean Calais-Auloy, Frank Steinmetz, Droit de la consommation, Paris: Dalloz, 2000, p. 214; Jean Calais-Auloy, "L'influence du droit de la consommation sur le droit civil des contrats" in Revue trimestrielle de droit civil no. 2, 1994, pp. 239-240; Cristina Corgas-Bernard, "Conditions de recevabilite de l'action en suppression de clauses abusives" in La Semaine juridique no. 46, 2005, pp. 2113- 2116; Jean Beauchard, Droit de la distribution et de la consommation, Paris: Presses Universitaires de France, 1996, pp. 89-112.
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