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Product liability in the European Community: the legislative history.

This article analyzes the complex history of the important new product

liability directive of the European Community. The member

countries must amend their laws and meet the directive's proconsumer

standards and spirit. The lengthy political evolution of this policy

involved many aggressive constituencies, including nations, parts of

the European Community governance structure, business federations,

consumer organizations, and other functional interest groups.

The nations of the European Community (E.C.) are experiencing a sweeping change in public policy on liability for products. The gist of the idea is that a regime of responsibility approaching strict liability without fault is being installed. Each nation can allow a state-of-the-art defense and a monetary settlement ceiling if it believes such restrictions appropriate at this time, but the relevant directive requires that these two factors be reviewed later by the E.C. for their effects and to see if they are needed. This policy change is an important part of the complex preparation for 1992. By the end of that year the integrated internal market must be completed, according to the Single European Act (Official Journal of European, Communities 1987).

The product liability directive is extremely important for at least three reasons. First, the specific content of the document alters law that has been described as "harsh" (e.g., Orban 1978). Second, it is a significant accomplishment of the consumer protection movement. Third, it is a prime example of supranational regulation of business, a phenomenon with potential for not only Western Europe but many other parts of the world. Consumers, scholars, government officials, and business executives in all countries should carefully examine the complicated process through which this major change has come about. This article examines the legislative history of the E.C. product liability directive and places it in context.

The new directive has been extraordinarily difficult to implement because of the amount of change involved and the complexity of that change. The European Bureau of Consumer Unions has made formal complaints to the E.C. about the delays in implementation. The necessary revisions are highly significant for West Germany, Britain, Ireland, Italy, Greece, the Netherlands, and Denmark, less so for Belgium, France, and Luxembourg. Following an allowed period of transition they will be important for Portugal and Spain, the newest members. The latter voluntarily made some modest changes in 1984 (Bofarull 1985).

The E.C. nations will still have some differences after the directive has been fully implemented, including procedural, cultural, and economic variations and the availability of legal aid. However, all members must comply with both the standards adopted in the directive and its spirit. Thus it is likely that product liability will exhibit considerable similarity across most of Western Europe.

MOTIVATIONS FOR THE DIRECTIVE

Two motivations were behind this directive. First, the provisions of the Treaty of Rome, which set up the European Community in 1957, expressly mandate unification of national markets and elimination of obstacles to free movement of goods, services, labor, and capital. Article 100 of the treaty gives the Council of Ministers power to "harmonize" laws of members if such national laws "directly affect the establishment or functioning of the common market." If national laws significantly "distort" the market or cause significantly different business costs among the countries, they are carefully considered for deletion or amendment.

The E.C. has two principal legal mechanisms, a regulation and a directive. A regulation has direct, literal applicability to all parties. A directive, as spelled out by Article 189 of the Rome Treaty, binds member nations only as to the result to be achieved, leaving "form and method" to each member's judgment. However, in theory a directive can have direct applicability to a firm or person if a government does not implement the directive's principles and spirit in the prescribed time. As a legal concept a directive does not envision uniformity among member nations. The two primary reasons are that uniformity may be unnecessary in reaching the goal and that it may be excessively intrusive in light of the competing interests frequently involved (Lasok and Bridge 1982). An additional reason is that sometimes it may be unnecessarily damaging to a culture (Reifner 1989). The lack of uniformity built into directives as instruments of harmonization may be increased in that sometimes a specific directive authorizes derogation from some of its provisions, as in the case of product liability.

The second motivation for the directive is protection of consumers. In the mid-1950s, when the Rome Treaty was drafted, the consumer movement in Western Europe was underorganized, not very articulate, and not very experienced. Moreover, the people who founded and gave the E.C. its earliest substantive meaning did not perceive consumers as a specific target of attention. Instead, they believed that consumer interests would be best served in an indirect manner, i.e., by increases in production, free movement of goods and services, and an increase in competition (Bourgoignie 1982). Therefore, the treaty places no emphasis on consumer protection. However, recent and present legislators, civil servants, and judges, at both the national and E.C. levels, have been constructing an interpretation that runs somewhat parallel to the "necessary and proper" clause of Article 1, Section 8 in U.S. constitutional law tradition; i.e., the proconsumer lawmakers are using the right to "take appropriate measures" to accomplish "one of the objectives of the community" where the treaty has not expressly provided the requisite power. This indirect approach is significantly changing the nature and amount of protection for consumers in the member nations.

Legal Rationale for a Protection Program

As indicated previously, no explicit, focused basis exists in the Rome Treaty for protection of consumers. However, one can explicate some of the legal rationales for and against the E.C. consumer protection program. It is useful to sort these attitudes about the legal basis for consumer protection measures into three main classifications. First, there is the approach which the author, virtually all of the legal profession, and some news media call "restrictive" or "conservative." This approach holds that the treaty did not intend to give the E.C. the right to impose a supranational regulation simply because the national regulation, if any, is substantively inadequate in one or more member states. The conservative approach also maintains that if the functioning of the common market is perceived as being affected by unequal conditions of competition from nation to nation, then the scope of Article 100 is distressingly broad. This would be because nearly all national legislation affects the conditions of competition of firms at least in some way. According to the conservative approach, such a carte blanche interpretation simply does not ring true, given the philosophy and thinking style during the planning, formation, and early history of the E.C.

Although widespread, the conservative approach is associated more with the recent strict constructionist legal thinking and reasoning of the Danes than any other group. This is ironic in that most Danish regimes and the Danish culture have been rather supportive of consumer protection at home (Dahl 1981).

The Messina Conference Report is also relevant to the conservative rationale (Close 1983). It notes that differences among countries in business expenses such as social security charges are usually compensated for by exchange rates. This report takes the position that only limited action on the basis of Article 100 is needed, namely to correct or eliminate specific distortions that favor or disfavor certain sectors of economic activity. However, one must note that introduction of the European Monetary System, which tries to stabilize the members' currencies, weakens the economic rationale of the Messina Report.

An approach to a foundation for consumer protection policy which the author, virtually the entire legal profession, and some news media choose to call "liberal" can be identified. Article 2 of the Rome Treaty lays out five relevant tasks: (1) harmonious development of economic activities; (2) continuous and balanced expansion; (3) increase in stability; (4) accelerated raising of the living standard; and (5) closer relations among member states. The Preamble to the treaty refers, among other things, to "the economic and social progress of their countries by common action to eliminate the barriers which divide Europe, and the constant improvement of living and working conditions of their peoples" (Treaty of Rome 1957). These clauses and expressions of mission taken together are enough for most liberals to establish a legal basis for a legislative program of consumer protection.

Nevertheless, liberals sometimes identify other bases. One is a formulation of an idea alluded to above in connection with conservatism, i.e., that if there are national consumer protection measures, there is inevitably a distorting effect on the E.C.'s conditions of competition. This is a far reaching line of thought and extended to its logical conclusion would rule out anything but Community competence in protecting consumers. Another basis is the inherent nature of a market economy (Close 1978, 1983). In substance the argument, never crystal clear, proceeds as follows. The European common market is a market economy. If a market is to function goods must be made and marketed. The other, essential side of the coin, is that these goods must be purchased and consumed. The selections of consumers and the conditions in which their selections are exercised become an important regulatory feature of a market. Supranational consumer policies are needed in an enlarged market where the disequilibrium between producers and distributors and between producers and consumers may be further aggravated.

A third category is founded on an ad hoc approach to any particular regulation proposed. A set of justifications for the proposal is developed with particular reference to the most relevant functional article of the treaty. One makes arguments for the proposal based on practical and economic grounds, without reference to the role of the consumer. The consumer is then just an unavoidable beneficiary.

PREDIRECTIVE SITUATION

All E.C. nations have had compensation principles which have derived from either contract or tort law. Liability through contract revolves primarily around breach of warranty, while liability through tort revolves primarily around negligence. The sphere of application of contract law, which is mostly sales law, has been small in that it has offered help to only the immediate contracting party. France and Belgium liberalized this privity rule rather early so as to offer a damage claim to anyone in the "chain," i.e., channel, of a sales contract. Thus a person separated from the producer by one or more levels gained legal standing.

In Western European practice, therefore, product liability rules have developed largely by extending the traditional negligence standards of tort law. For quite some time one has seen an evolving legal recognition of a duty of care by the producer to any user of the product without reference to contractual or other specific ties. Nevertheless, there have been limitations to the augmented judicial concept of product liability. People who have been injured have had to prove all elements of their claim under tort law, i.e., damage, causation, and negligence. The consumer has borne the risk of the legal action, including costs of experts. Unlike the United States, therefore, in most E.C. nations product liability complaints have been carried forward mostly by business users and other manufacturers, not ultimate consumers (Micklitz 1979). Aggrieved West European consumers confront many procedural barriers and disincentives, including relatively high individual cost, to litigate even highly meritorious product liability claims. What is more, the discovery rules in most of Western Europe are relatively restrictive (Nilles 1985). Courts in E.C. nations have tended to be stricter than courts in the United States with regard to proof of causation, but they have tended to be a little more sympathetic to the injured in legally establishing producer negligence. France has proceeded further than the others in imputing negligence, despite a conservative civil code written in the Napoleonic era. This has come about through uncommon judicial activism. Greece and Italy have been more conservative in product liability than the others.

Despite the points made, a significant, yet slow and uneven, reform trend exists in the E.C. countries to provide the consumer expanded protection. Ironically this movement that had started bringing relief to the consumer also eroded principles of law and fragmented bodies of law that had accumulated in favor of the consumer. The result of the predirective reform movement was extremely disparate producer obligation plus wide variations in litigation, assumptions, principles of proof, and awards to plaintiffs. This situation was disharmonious for firms and could make nations differentially attractive and costly for conduct of business. It certainly failed to provide similar protection to consumers from nation to nation. This disparate situation caused many people to give serious consideration to a directive on this topic.

CONTEXT AND EVOLUTION OF E.C. CONCERN

Officials and staff of the E.C., including most politicians, technical experts, and career administrators, seem to have concluded in the early 1970s that the organization was perceived as too much on the side of business and very little concerned about consumers. That era and its facts are open for future interpretation by historians and other scholars. However, at least one can say that the E.C. establishment had not been alert to some needs of consumers and had not built meaningful liaison with consumer organizations and federations. Note also that, from the standpoint of modern administrative theory, the E.C. establishment had paid too little attention to the concept of organizational image.

Three major multinational events, each complex in its own right and each based in a different multinational organization, made the E.C. more aware of consumers and sharpened its perception of the need to re-explore and objectively examine consumer issues. The first event was the proposed Hague Convention on the Law Applicable to Products Liability. The Hague Conference on Private International Law, established in 1893, is a periodic international meeting sponsored by 28 nations, including all E.C. member states. At the suggestion of the United States, a member, The Hague Conference agreed in 1967 to place the product liability topic on the agenda for later consideration and debate. The Conference created a Special Committee to do the preliminary research and drafting (Reese 1972). The U.S. representative and rapporteur for The Hague Convention on the Law Applicable to Products Liability argued forcefully that "certainty, predictability, and uniformity of results are probably of greater importance in product liability than in many other areas of tort and that these values could best be achieved in the international area through the medium of a convention" (Reese 1978, 311-312). The report of that study and debate was adopted in October 1972 (Orban 1978; Reese 1974, 1978). Although it addressed only matters related to conflicts of law and did so in a narrow and technical manner, it attracted the attention of people throughout Europe to the wide variation in rights and treatment. Several E.C. countries have ratified this convention.

The second event, in 1970, was the launching of a large-scale, ambitious effort of the Council of Europe to compare and critique fundamental national laws on product liability and then, if possible, to reform and harmonize them. Created in 1949, the Council of Europe included the E.C. states plus the European Free Trade Association (EFTA) nations (Austria, Finland, Iceland, Norway, Sweden, and Switzerland) and Turkey, Cyprus, and Malta. The purpose of the Council of Europe is to construct greater unity among members through examination of questions of common interest, by conclusion of agreements and adoption of common action in the economic, social, cultural, scientific, legal, and administrative fields, as well as through protection and development of human rights and fundamental liberties (Statute of the Council of Europe 1949).

In 1975 the Council of Europe issued the Draft European Convention on Products Liability in Regard to Personal Injury and Death, frequently called the Strasbourg Convention, together with an explanatory report and urged its adoption (Hanotiau 1978). The document comprises a system of rules for conflicts of laws. This report was prepared by the European Committee for Legal Cooperation and submitted to the Committee of Ministers of the Council of Europe. One should recognize, however, that at the request of the European Committee for Legal Cooperation, significant research and comparative analysis of law in Europe and abroad had already been done by the Institute for the International Unification of Private Law in Rome (International Institute. . . , UNIDROIT 1972). That work was turned over to the Committee. Governments of 52 countries, including all E.C. members, participate in UNIDROIT, which was established in 1926.

The Council of Europe issued a final text of the Strasbourg Convention on January 27, 1977, and invited European governments to ratify it. This document is expressly proconsumer, declaring in its preamble that its purpose is to insure better protection of the public than is currently available through national laws.

The third event was the Paris Summit, the meeting in December 1972 of heads of states and governments of all E.C. countries. These leaders addressed consumer needs in Item 6 of the Paris Summit Declaration. They declared the need for a general action program oriented toward consumers, instructed the E.C. Commission (E.E.C.) to study and prepare such a program, and told the Commission both to increase and to upgrade its staffing on consumer affairs topics. Two general planning results eventually came from the Declaration. On April 14, 1975, the Council issued a resolution entitled the Preliminary Program of the E.E.C. for a Consumer Protection Policy. Then on May 19, 1981, the Council issued a resolution on the Second Consumer Protection Program.

It is only fair to note, in connection with the Paris Summit, that several E.C. officials and staff had seriously discussed the need for a product liability policy as early as the late 1960s but postponed work on it. The postponement was mainly due to the distinct possibility of several more nations joining the organization rather soon, especially Britain, whose economy and multinational corporations would be influential and whose laws were quite different in substance and heritage from the continental members. Negotiations with the potential new members became serious in 1971. Britain, Ireland, and Denmark joined the E.C. in 1973.

One must also take note of a change in the draft Strasbourg Convention. The final version of the Strasbourg Convention and the E.C. directive are fairly similar. The most important and interesting difference between the two in final form was that the Convention concerned itself only with personal injury and death, while the directive also addressed material damages. The earliest thinking about and wording of the draft Convention included damages to property. However, the negotiators and drafters, called the Committee of Experts, deleted such material at an early date. Werner Lorenz, head of the German delegation to the Committee of Experts, has recalled the intricate work:

Originally, it had been the intention of the Committee of Experts to deal

with a producer's liability not only for death or personal injury, but also for

damage caused to property. In view of the slow progress made in other basic

matters of the Convention, however, this idea had to be abandoned. Moreover,

doubts were raised as to whether the same principles of liability should

apply to both types of damage, and it was feared that some states might not

consider ratification if property damage was included. A preliminary draft

that attempted to deal with damage caused to property revealed the inherent

difficulties. Had they been adopted with the exception that some delegations

insisted upon, little would have remained to these provisions. (Lorenz 1975,

1010)

In Britain the select committees of both houses of Parliament expressed a slight preference in the late 1970s for the Strasbourg Convention over the draft directive, and for a period the House of Lords select committee actively opposed the draft directive (Jolowicz 1980). British preference for the Convention over the directive seems to have been mainly because the Convention's geographical jurisdiction probably would have been much larger fairly soon, not any functional or task related reason.

Special Case of Britain

Some additional attention to Britain is desirable and necessary. Because it has emphasized common law over codified legislation, Britain's legal heritage differs from that of the continental nations. Although Britain showed considerable concern about consumer protection during the 1970s, in Orban's words, the common law of that nation had developed a noteworthy "anti-consumer bias" (1978, 344). Cranston concluded that the British approach to liability created "procedural and evidential difficulties which impede the course of justice" (1984, 157). The government asked two law reform bodies, the English and Scottish Law Commissions, on November 2, 1971,

to consider whether the existing law governing compensation for personal

injury, damage to property or any other loss caused by defective products is

adequate, and to recommend what improvements, if any, in the law are

needed to ensure that additional remedies are provided and against whom such

remedies should be available. (Law Commission 1975, 22)

The two commissions evaluated the substantive and procedural characteristics of product liability claims. They concluded that both simplification and revision were needed, and that strict liability was desirable (English and Scottish Law Commissions 1977).

An additional body, the Royal Commission on Civil Liability and Compensation for Personal Injury, was announced by Prime Minister Edward Heath on December 19, 1972, and placed under the leadership of Lord Pearson on March 19, 1973, for concurrent work. The main reason seems to have been concern by Heath and much of the British public about the Thalidomide disaster. Heath said at the time:

There should be an inquiry into the basis of civil liability in the United Kingdom

for causing death or personal injury. It is the Government's view that a

wide-ranging inquiry is required into the basis on which compensation should

be recoverable. (House of Commons 1972, col. 1119)

In March 1978 the Royal Commission issued its report, usually known as the Pearson Report (Royal Commission 1978). It urged a regime of simplification and strict product liability but cautioned that reform in the United Kingdom should take full account of the then proposed E.C. directive on liability.

FURTHER EVOLUTION OF THE DIRECTIVE

Technicians preparing the first version of the E.C. draft directive on product liability researched and compared materials from many diverse sources scattered across Western Europe, the United States, and Canada. However, they appear to have been influenced considerably by the proconsumer draft text of Article 6.3.13 of a proposed new civil code of the Netherlands written in 1961 (van Wassenaer 1986). Dealing with product liability, this section of that progressive proposal had been rejected, however, by the Dutch.

The first official document resulting from the Commission's mandated work was a Commission memorandum in August 1974 which concluded that "consumer protection not only varies considerably as between Member States but is also largely inadequate" and refers to itself as a "first preliminary draft directive concerning . . . product liability" (Commission of the E.C. 1974, 4). The document strongly implies need not only for harmonization but new, more proconsumer standards as well. This memorandum rejects both tort and contract law as adequate bases for liability actions. One must note that the majority politico-economic philosophy of the Commission career members had gradually become somewhat less conservative in persuasion. International law scholar H. D. Tebbens, researching and writing at that time, emphasized the wide variation in outcomes of similar case fact situations from one E.C. country to another. He stated that "the actual results . . . are . . . often quite different in otherwise comparable cases" (1979, 173). Whincup added that, "Even omitting, as we must, the whole vexed question of interstate accidents and resulting conflicts of law it is clear that injured consumers' claims depend essentially on chance combinations of time and place" (1982, 537).

In October 1976, the E.C. Commission issued its first official draft of the directive and proposed it to the Council of Ministers (Bulletin of E.C. 1976). Some felt that the Commission issued the proposed directive prematurely, i.e., that it did not conduct sufficient research and substantive analysis of the market effects of the proposed system of strict liability (Nilles 1985).

At that point, Article 100 of the Rome Treaty required that the draft directive go from the Council of Ministers to the European Parliament and the Economic and Social Committee of the European Community (ECOSOC) for consultation. This step is required whenever a proposed directive, when implemented, would amend legislation of any member. Parliament is elected, but ECOSOC is composed of 144 members appointed by member governments to represent three supranational constituencies--employers, employees, and various public interest coalitions such as consumers and farmers. Neither the views of Parliament nor of ECOSOC are binding.

It is well worth recognizing that the Legal Affairs Committee of the European Parliament initially recommended against the proposed directive. This rejection was attributable to two points. First, although the Commission proved there was significant disparity in consumer protection, it only assumed that variation in national laws distorted competition, business costs, and free movement of goods and it presented no evidence whatsoever. Second, although Article 100 of the Rome Treaty confers on the Council of Ministers the authority to require harmonization of members' laws to facilitate the functioning of the common market, neither this article nor any other in the treaty authorizes the Council to adopt directives merely because the members' laws are considered to be substantively inadequate. This strict constructionist view has now declined in popularity. If the influential Legal Affairs Committee had not reversed itself in a timely manner, the directive probably could not have become law.

Consultation with Parliament, much of it acrimonious, lasted about two and one-half years. Although Parliament had considerable comment on the proposed directive, one must acknowledge that it was politically quite jealous of both the Commission and the Council and was attempting to gain equal power. It wanted to be heard regardless of its convictions about its commentaries. After taking into account a number of suggestions from Parliament, the Commission issued a slightly revised draft proposal on October 26, 1979. Several more years of public debate and lobbying followed. During this time the Council of Ministers' Permanent Representatives Committee, a small group of high level representatives of the E.C. member states, worked quietly behind the scenes on revisions to try to make the directive acceptable to all of the countries, as unanimity was required. The proposal was finally adopted by the Council of Ministers on July 25, 1985, and promulgated a few days later (Official Journal of the European Communities 1985).

Through late 1984, just seven months before approval, finalization of the directive appeared doubtful. The dialogue and debate of the early 1980s had not reached a resolution by late 1984 as many nationalistic political leaders eager to preserve sovereignty and pet procedures at home and many business leaders anxious to avoid a more liberal product liability policy maneuvered to quash or substantially weaken the proposal. Of course not all business firms and executives opposed the proposal. The opposition from business seemed to center in and be organized through the Union des Industries de la Communaute Europeen. The central thesis of that organization and many independent business people was that the proposed directive would drive up costs, and thus prices, and inhibit product innovation, with the ultimate result of reduced consumer satisfaction. The International Chamber of Commerce also demonstrated a mostly negative viewpoint, as did the American Chamber of Commerce in Brussels, although they were useful in analysis of cause and effect relationships, consistency, and clarity in the proposed directive as well as the possible costs involved. The trade association of the European insurance industry, Comite Europeen des Assurances, expressed grave concern for a number of years, but its membership apparently lacked any meaningful consensus about whether to support or oppose the proposed directive. It was concerned with predictability of costs and overburden, especially in light of the U.S. experience with rising monetary settlements and the accompanying increases in policy premiums alleged to be caused by these settlements.

Most advocates of the directive were tired and discouraged. Consumer groups expressed "massive dissatisfaction" about the "snaillike pace" (Nilles 1985, 749). To be sure, there were many advocates and interested neutral academicians in all member nations, but a disproportionate share of the leadership and work that kept the proposal in the eye of the public and on the desks of politicians was borne by a relatively small number of devoted activists. Recognize that the E.C.'s Italian presidency, which took office in early 1985, was remarkably alert, adroit, and highly skillful in handling negotiations and facilitating compromise. That presidency seemed to want to make a reputation for itself, was eager to demonstrate that the ponderous E.C. bureaucracy could finally produce a decision, and seemed to judge it important to show the world that Western Europe was capable of a cooperative spirit and actual closure on something. This came during strident disagreements among E.C. nations on many points, including agriculture and organizational finances, and a period of drift and general ennui in the economies of members. Interestingly enough, the French and Luxembourg governments, whose laws came the closest to providing a quasi-model, did not press vigorously for passage. This was curious. Although their consumers had the least to gain, industry operating in the two nations had a substantial amount to gain in making the E.C. playing field nearly level.

SPECIAL ROLE OF CONSUMER ORGANIZATIONS

One must take cognizance of the important role of consumer organizations in the negotiation and adoption process (Bourgoignie 1982, 1984a). These societies included those on the national level plus the federation of such societies in all E.C. countries, the European Bureau of Consumer Unions (B.E.U.C.). In addition, the International Organization of Consumers Unions (I.O.C.U.) provided moral support, encouragement, and consultation. However, according to Grada Hellman, director of the secretariat of that global federation, it could not involve itself explicitly in writing and promoting such a directive in any specific part of the world because of the organization's mission and jurisdiction (1989).

The more active and participative national groups were Arbeitsgemeinschaft der Verbraucher and Stiftung Warentest, both of West Germany, the Consumers' Association and National Consumer Council, both of Britain, Consumentenbond of the Netherlands, Forbrugerradet of Denmark, Association des Consommateurs of Belgium, Union Federale des Consommateurs of France, and Union Luxembourgeoise des Consommateurs of Luxembourg. Consumer societies of the other five nations were little involved in designing, promoting, and passing the directive. According to Anthony Venables (1989), B.E.U.C. Director, this was because of the brevity of their experience, shortages of financial and personnel resources, stage of their countries in evolution of consumer protection concern, and level of economic development of these countries. All consumer societies in Western Europe, it must be noted, strongly favored strict no-fault product liability (Bourgoignie 1984b). Consumer organizations used the following tools: press conferences, personal interviews with journalists, press releases, analytical reports, and lobbying.

It is interesting to note that the B.E.U.C. estimates that the number of business lobbyists working on the liability directive issue was about 100 times as large as the number of consumer lobbyists (Venables 1989). The B.E.U.C. also states that nearly all consumer lobbying was done by staff members of consumer organizations. Hellman of the I.O.C.U. notes that such a fact is inevitable in the evolution of consumer movements (1989).

The philosophical and advocacy roles of consumer organizations were of enormous importance in writing and adopting the directive. They successfully cultivated the image of moral leadership and arbiter of business ethics. The European Bureau of Consumer Unions, for example, frequently spoke of the proposed weakened draft version of the directive as "morally untenable" (B.E.U.C. 1984a, 1). This federation consistently pursued three content themes in its work. One was to characterize the process of negotiations as a "merry-go-round" that went a considerable distance but always came back where it started (B.E.U.C. 1985b, 4). A second was to accuse the E.C. officers and expert staff of having "an abstract and patronizing approach to consumers" (B.E.U.C. 1985a, 1). A third important theme was that of technocratic remoteness and focus on politics among the same officers and staff. This theme is illustrated by the following.

The Member States' government experts have completely lost sight of the

problems of those people for whom the proposal for a Directive is intended to

provide help. They have reduced product liability to technocratic compromises

by endeavoring to reconcile the different national positions and those of

manufacturers and consumers. (B.E.U.C. 1984b, 1)

WHAT THE DIRECTIVE MEANS FOR CONSUMERS

The new product liability directive brings about a regime closely approaching no-fault strict liability for products in the E.C. nations. Individual member nations have the right to set higher standards. They can also set financial limits on liability and allow a state-of-the-art defense by the manufacturer, but both such features are subject to formal future policy reviews by the E.C. organs of governance. The directive significantly enhances consumer protection in nine of the nations and makes small but noteworthy improvements in the other three. Addressing what could well be the weakest area of consumer protection in the E.C., the new directive is an important step in creating a proconsumer environment.

The West European consumer movement did not get every point it urged in the directive, but it accomplished an impressive amount. It may well achieve more later on a national basis in some E.C. countries and perhaps more still later on the E.C. level. Moreover, it appears likely that consumer leaders and spokespersons asked for more than most of them realistically hoped to attain at that time.

CONCLUSION

Although the Council of Europe's product liability work was widely known, the E.C. decided to develop its own document and made a heavy investment of time, technical labor, funds, and psychic energy. One has to be impressed by the duplication. Naturally one must realize that the E.C. did not have advance knowledge that its work would culminate in something so similar to that of the Council of Europe, but one is probably safe in saying that most academicians, consumer leaders, and thoughtful administrators would have forecast this result. The reasons for the largely duplicating endeavors are probably political. In putting product liability on its own agenda and spending scarce resources thereon, the E.C. was able to achieve two things simultaneously. First, it laid some necessary foundations for a reputation as an advocate for consumers. Second, the E.C. strengthened its own authority, which had been relatively shaky in the early 1980s. It circumvented the national voluntarism inherent in potential acceptance of a recommendation from the Council of Europe, and kept from giving any credit to that arch competitor for European loyalty and leadership.

For many years all interested constituencies will be maneuvering to interpret the new directive. This will take the form of national statutes, cases in national courts, cases in the European Court of Justice, administrative rules from government agencies, and suggestions and objections from producers, trade associations, and consumer groups. Moreover, in time substantive or procedural changes may well be made to the directive itself. It also will need to be related to other consumer policies developing in the E.C. machinery. Bear in mind that Article 18 of the 1986 Single European Act calls for further harmonization and declares that measures in the areas of "health, safety, environmental protection and consumer protection will take as a base a high level of protection" (Commission of the E.C. 1986). Moreover, it is likely that this E.C. breakthrough on consumer protection will influence policy making in West European countries outside the E.C. and possibly influence some non-European countries.

REFERENCES

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Thomas V. Greer is Professor of Business, College of Business and Management, University of Maryland, College Park.

The cooperation of the staff of the Commission of the European Communities, the European Bureau of Consumer Unions, and the International Organization of Consumers Unions is acknowledged with appreciation.
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Title Annotation:Viewpoints and Communications
Author:Greer, Thomas V.
Publication:Journal of Consumer Affairs
Date:Jun 22, 1992
Words:6727
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