Effective Management of Product Liability Risk in the United Kingdom

By Evans, John C.; Elvy, Mark C. | Defense Counsel Journal, July 2001 | Go to article overview

Effective Management of Product Liability Risk in the United Kingdom


Evans, John C., Elvy, Mark C., Defense Counsel Journal


The public's demand for heightened accountability of corporations and consumer claim psychology have made risk management paramount

THE MANAGEMENT of product liability risk by United Kingdom companies selling or supplying products has developed over the last 20 years into an integral part of their operations. The perception of the scope of that risk is continually evolving as a result of trends that have fuelled a number of legal developments, among them the intensification of companies' accountability to the public, the desire for public and corporate bodies to be more transparent in their dealings with the public, the e-commerce revolution and an increasingly pervasive consumer claim psychology. Those trends are reflected in the legal environment facing productproducing companies.

U.K. manufacturing or distributing companies do business in many different countries and in a multiplicity of markets, a situation that creates a multitude of risks. The effective management of product liability risk depends on an understanding of the different legal systems across the jurisdictions in which these companies operate and on the idiosyncrasies of laws relevant to the chosen markets in each of those jurisdictions. While those national differences and idiosyncrasies because vary and are rooted in the laws of the various jurisdictions, there are some principles of general application to U.K. companies and to their directors that affect the management of product liability risk in the U.K.

THE LAW

Companies and their directors are exposed to the risk of two categories of liability for the products they produce or distribute--civil and criminal. Civil liability arises from the breach of obligations or duties in contract or in negligence under the so-called "strict liability" provisions of Part I of the Consumer Protection Act 1987 (1987 Act) and for breach of statutory duty, where a product is supplied which does not meet specific obligations imposed by statute.

One of the principles behind the 1987 Act, which implemented the 1985 European Product Liability Directive, was to provide a compensatory regime for consumers in respect of defective products that, unlike negligence, did not require proof of fault by the producer. Under the 1987 Act, consumers still have to prove damage and that the damage was caused by the defect. In practice claimants usually pursue product liability claims alleging both negligence and liability under the 1987 Act.

The terminology of risk in a civil liability context reflects whether the product is the subject of a business sale, in which case the issue is whether the product is of satisfactory quality, or a consumer sale, in which case the issue is whether the product is defective. The concept of a defect in consumer sales is further defined by reference to its nature and level of safety. The concept of level of safety is enshrined in the 1987 Act: by level of safety is meant the level that persons generally are entitled to expect, taking into account a number of factors, which are set out in Section 3, such as the labeling and information supplied with the product.

In the case of a business sale, managing the risk of an unsatisfactory quality of product is an adjunct of contract management and can be catered for in negotiations of limitation clauses in the contract or, absent negotiation, in terms that prevail. The element of negotiation is absent from the case of a sale to a consumer, and liability for defective products cannot be excluded.

Insurance also is an obvious component of managing such risks, whether in a business or consumer context, and is bound up with the nature of the quality control procedures in place and the manufacturer's adherence to good manufacturing practices.

Criminal liability arises under Part II of the 1987 Act, under the General Product Safety Regulations 1994 (1994 Regulations), the Health and Safety at Work Act 1974 (HSAW Act), and under many other specific statutory provisions regulating the manufacture and supply of particular products-for instance, food. …

The rest of this article is only available to active members of Questia

Sign up now for a free, 1-day trial and receive full access to:

  • Questia's entire collection
  • Automatic bibliography creation
  • More helpful research tools like notes, citations, and highlights
  • Ad-free environment

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Default project is now your active project.
Project items

Items saved from this article

This article has been saved
Highlights (0)
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

Citations (0)
Some of your citations are legacy items.

Any citation created before July 30, 2012 will labeled as a “Cited page.” New citations will be saved as cited passages, pages or articles.

We also added the ability to view new citations from your projects or the book or article where you created them.

Notes (0)
Bookmarks (0)

You have no saved items from this article

Project items include:
  • Saved book/article
  • Highlights
  • Quotes/citations
  • Notes
  • Bookmarks
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

1

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited article

Effective Management of Product Liability Risk in the United Kingdom
Settings

Settings

Typeface
Text size Smaller Larger Reset View mode
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Full screen

matching results for page

Cited passage

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited passage

Thanks for trying Questia!

Please continue trying out our research tools, but please note, full functionality is available only to our active members.

Your work will be lost once you leave this Web page.

For full access in an ad-free environment, sign up now for a FREE, 1-day trial.

Already a member? Log in now.