German Approaches to Products Liability

Article excerpt

I. INTRODUCTION

German products liability law relies on three concepts: traditional contractual liability, traditional tort liability, and strict liability based on specific statutes, such as the Products Liability Act of 1990,1 which implements the European Products Liability Directive,2 and the Pharmaceutical Products Act of 1976, amended last time by the Pharmaceutical Products Act of February 25, 1998.3 These three competing concepts supplement each other in a complex way. Rather than replace German autonomous4 products liability law, the new Products Liability Act adds a strict liability claim which is not available under the traditional German Civil Code doctrine.5 In general, a German plaintiff will bring his or her products liability claim under theories of both negligence and strict liability. As the buyer of a product, he might also seek to hold the seller liable on a contractual basis for any injuries caused by the product.6 This article, therefore, describes a variety of alternative claims that a plaintiff may file under German law.

II. PRODUCTS LIABILITY BASED ON CONTRACT

In German contract law, compensation for damages resulting from a defective product is granted under narrowly defined conditions. A buyer may only claim damages if the seller fraudulently concealed a defect, or if the good did not conform to a statement regarding its quality-ie., a breach of an express or implied warranty.

Codified German contract law, however, does not provide sufficient protection for the consumer for the following reasons:

fraudulently concealed defects are difficult to prove;8

not all product information can be considered a warranty;9

the claim for damages based on a breach of warranty is subject to an extremely short statute of limitations of six or twelve months after delivery of the good;10

only the seller, and not the manufacturer, can be held liable;11 and

only the buyer may recover damages.12

German courts have filled some, but not all, of the gaps in contract law. In some instances, the courts have construed an independent consultancy agreement to avoid the statute of limitations under sales contract law.13 Further, courts have developed a new concept called the Positive Vertragsverletzung (positive violation of a contractual duty).14 This judge-made concept allows a buyer to recover damages not covered by Section 463 of the Civil Code-especially those resulting from personal injury and property loss (excluding the loss of the product itself).15 Furthermore, the courts have extended the contractual protection to relatives and employees of the buyer who foreseeably come in contact with the product. 16

However, German judges, by denying claims against the manufacturer under contract law, have refused to go as far as their colleagues in France and Austria. Thus, the German system of contractual products liability has remained incomplete, particularly because it does not protect all product users, especially innocent bystanders. Instead, the Federal Supreme Court in its 1968 landmark decision, the Fowl Pest Case, decided to enhance the consumer's protection from defective products under the principles of traditional tort law.17

III. GERMAN CIVIL CODE TORT LIABILITY UNDER THE NEGLIGENCE THEORY A. Liability Under Section 823, Paragraph 1 of the Civil Code

1. Introductory Remarks

Section 823, Paragraph 1, of the Civil Code18 provides a catch-all provision for tort claims that is the leading tort provision in and outside of the products liability field. A person who willfully, or negligently, and unlawfully injures the life, person, health, freedom, property, or other right of another is liable to compensate him for any damages arising therefrom.19 German products liability law developed under this rule before the Products Liability Act was promulgated.

Because the structure of Section 823, Paragraph I of the Civil Code was not designed to cope with the specific difficulties which arise in the area of products liability, the German courts had the challenging task of applying the provision to various product liability issues. In the last thirty years, courts have created a products liability doctrine without eliminating fault as a necessary element in establishing the manufacturer's liability.20 Because a strict liability claim would have violated Section 823 of the Code, product liability has been advanced by establishing Verkehrssicherungspflichten (duties of care) and by shifting the burden of proof to the defendant.

2. Survey of the Requirements of Section 823, Paragraph 1

Unlike the French catch-all provision,21 Section 823, Paragraph 1 of the Civil Code limits the recovery of damages to those resulting from the injury of certain rights and interests. The rights and interests protected are life, person, health, freedom, property, and other rights.22 The term "other rights" is construed narrowly and means absolute rightsrights that may be asserted against everyone.23 Thus, neither a Forderungsrecht (rights that exist by virtue of a legal relationship between the parties),24 nor wealth25 meets this requirement. These limitations hinder the recovery of pure economic loss. Nevertheless, relative rights and economic interests are actionable under other provisions of tort or contract liability if the respective prerequisites are fulfilled.26

A mere violation of one of the interests or rights enumerated in Section 823, Paragraph 1, however, is not sufficient to establish liability. The law further requires the infringement be unlawful and negligent.27 Within this realm, the Federal Supreme Court has introduced the duty of care into German tort law. A duty of care arises from the basic idea that whoever creates a potential danger is required to take the necessary measures to protect the interests and rights of others who might be injured.28 For purposes of products liability, this rule can be stated as follows: the fact that goods are produced and put into circulation gives rise to a duty of care on all people involved in the production and circulation of those goods.29 A person acts unlawfully if, during the production or distribution of the product, he or she does not exercise the diligence which is objectively due.30 Because the standard of negligence is defined as failure to exercise ordinary care, German courts will likely consider a breach in the duty of care as negligence. Therefore, the major issues in German products liability are the existence and scope of duties of care.

3. Specific Issues Under Section 823, Paragraph 1

a. Injury to Personal Property

A property injury does not require an encroachment upon the substance of the property; a more essential negative impact on the ordinary use of the product is sufficient. For example, the Federal Supreme Court has held that a property injury is sustained if water pipes are polluted due to the use of a chemical agent that contaminates the taste and odor of the water.31

A heavily disputed issue in products liability arises when the plaintiff wants to be compensated for the total loss of the product. The question is whether loss of the product can be considered property damage since the product was defective at the outset.32 German civil doctrine and German judges make a crucial distinction between Aquivalenzinteresse (the pecuniary value connected with the acquisition of a defect-free item) on the one hand, and Integritatsinteresse (the interest of people in the integrity of their belongings and possessions), on the other hand.33 While contract law is concerned with the protection of the former, the latter is a matter of tort law.

These considerations have led to a restrictive interpretation of property injury under Section 823 of the Civil Code. In a series of cases, the Federal Supreme Court drew the line in favor of allowing damages when the product is destroyed due to defect.34 Still, in 1963, the Federal Supreme Court denied a products liability claim when it found no injury to an existing property if the property was already defective at acquisition.35 Three days earlier, another panel of the same court had initiated a differentiated view of the property injury issue. In its landmark decision, the Floater Switch Case, the Court held that a contractual relationship does not prevent the buyer from claiming damages if the defect is limited to a functionally separate part of the product, the failure of which destroys the product as a whole.36 In a later decision, the Court created a broader rule according to which it is decisive whether the harm in question is identical to the Mangelunwert (diminution in value attributable to a defect that existed from the time of acquisition) or whether it is stoffungleich (not substantially identical to the defect).37 Only the latter case is actionable under tort law.38

In legal practice, the difference between a claim in contract and one in tort lies in the length of the statute of limitations. Under contract law, the statute of limitations expires six or twelve months after the delivery of the good;39 whereas in tort law, it expires three years from the time the injured party obtained knowledge of the injury and the person liable.40

b. The Duties of Care-Extent and Class of Defendants

The courts have ruled on the duties of care on a case-by-case basis. Because of their nature and function, duties of care can hardly be made subject to any kind of standardization. This probably influenced the German legislature to refrain from systematically stipulating duties of care by statute.41 Certain duties of care, however, are provided by statute and are considered protective laws.42 As the case law constantly progresses, nonstatutory duties of care which allow people to understand their obligations, can be extracted from the gradually developing body of law.

Duties of care apply to all parties who take part in the design, production, marketing and distribution of products.43 Duties of care may vary, depending on the function of the person responsible for each of these processes.44 For example, a manufacturer has enhanced duties compared to a supplier, and an importer has different duties from a retailer.

Apart from defining duty of care, the German courts and legal literature have developed a system which distinguishes between Herstellungsfehler (manufacturing defects), Konstruktionsfehler (design defects), and Instruktionsfehler (failure to warn and instruct).45 A manufacturing defect occurs when the product does not meet the manufacturer's own standard.46 This kind of defect often raises questions of causation and burden of proof.47 Currently, the manufacturing defect cases are not the prime area of discussion in German products liability law. In the frequently occurring design defect cases, the legal questions focus on whether the design complies with the safety requirements as defined by the current state of the art. It must be emphasized, however, that mere compliance with the minimum demands put forth by the German Industrial Standards (DIN) might be considered insufficient if actual technical developments have already surpassed these standards.48 An enhanced safety standard might be expected on higher priced products.49

The fastest evolving field in German products liability law today is the failure to instruct and warn. Basically, the consumer has the duty to use products as a reasonably prudent person would do under the circumstances. A duty to instruct how to use a product arises if it cannot be assumed that the average consumer has the adequate knowledge to protect himself from dangers related to the use of the product.50 The knowledge imputed depends on the expected sophistication of the user, who might be an expert in the field or might be a child.

The most recent issue decided by several courts and the Federal Constitutional Court arose with the so-called "baby bottle syndrome," a specific kind of dental caries caused by prolonged sucking of tea from a baby bottle. In the first Baby Tea Case-a landmark decision-the Federal Supreme Court held a manufacturer of sweetened instant tea for babies liable for damages from severe injury to the teeth of children who consumed the tea.51 The court found the manufacturer had breached its duty to instruct by not providing adequate information about the risk to children's teeth posed by the tea.52 The facts of this case revealed the inadequacy of placing the warnings next to the instructions because parents already familiar with the preparation of the tea overlooked them.53 When the Federal Supreme Court was prompted to decide on the adequacy of the warning on a tea bottle in a similar case, the judges held that to be adequate, warnings must emphasize important information about the risks related to the product and the functional relationship between the use of the product and the possible injury.54 Because the basic information (the fact that prolonged contact with the sweetened tea causes severe caries) was conveyed to the parents through labels on the bottle, the court did not find a failure to instruct or warn.55 It was also decisive that the warnings were no longer part of the preparation instructions but were visually separated from them.56

In sum, the ruling of the Federal Supreme Court was that, although the manufacturer has the duty to warn the consumer of risks connected to foreseeable unintended uses of a product, the user carries the responsibility of the use. The user has the burden to take measures reasonably expected to protect him from harm if the manufacturer has provided him with the required information. This line drawn by the Federal Supreme Court found the full support of the Federal Constitutional Court which held the criteria developed by the Supreme Court decision constitutional.57

The duty to instruct and warn, however, arises subordinately.58 The manufacturer's primary obligation remains to design and produce nondefective products.59 To put it another way, the manufacturer may not defend himself by alleging that he warned the consumer of an unsafe product. In particular, the manufacturer may not escape liability if a product does not comply with the Basissicherheit (basic safety standard) expected by the consumer and the public at large.60

Another judge-made duty is the duty to monitor the product after it is placed into the market. This duty of care arises even though the product is free from manufacturing and design defects, and there is no failure to warn or to instruct. One landmark decision is a case involving a manufacturer of motorbikes whose products were free from defect at the time of sale.61 The plaintiff bought a used motorbike equipped with Lenkerverkleidung (performance enhancing accessories for the steering wheel) designed and produced by another company.62 Due to this device the motorbike became unstable in certain situations.63 The plaintiff was killed in an accident caused by the lack of stability.64 The Federal Supreme Court found a duty to monitor the product in order to discover and avoid dangers which might be created by the combination of the manufacturer's product with the product of a third party.65

According to this decision, the duty to monitor is enhanced if the manufacturer is aware of certain indications that his own product has become dangerous because of a component which the user buys from a third party.66 In general, the duty to monitor is limited to the manufacturer of the finished product.67 In order to protect the consumer efficiently, court decisions have extended the duty to monitor to the sole national representative of a foreign manufacturer68 and to the importer who labels the product in his name.

If a product placed into the market is obviously dangerous, the manufacturer has a duty to recall the product.70 The Federal Supreme Court has not yet decided whether the manufacturer has the duty to repair or substitute a product which is recalled.71 The manufacturer is not liable for Entwicklungsfehler (development defects) caused by technical progress because development defects are not attributable to manufacturer negligence.72

c. Burden of Proof

According to the general rules, the plaintiff carries the burden of proving the elements of his or her claim. Because the plaintiff usually lacks access to information related to the manufacturing and distribution processes, however, he or she would often be unfairly disadvantaged. Thus, the courts have shifted the burden of proof to the defendant manufacturer.73

The case law concerning burden of proof is overwhelming and problematic to study. These difficulties are exacerbated because courts classify their decisions according to defects and duties.74 Another problem is that the law on burden of proof has not always developed uniformly.75 Moreover, some issues have not yet found a clear solution. The present state of the law is elaborated below.

Design Defects

In design defect cases, the plaintiff must prove that his injury resulted from a design-- related characteristic of the product and that this characteristic was objectively avoidable.76 The manufacturer, in rebuttal, must show that he exercised ordinary care in the process of designing the product-i.e., that the lack of safety does not constitute a breach of duty.77 This might be the case, for example, if a safer design cannot be expected based on the low price of the product.

ii. Manufacturing Defects

Basically, the plaintiff has the burden to show that the product, at the time it was put into circulation, did not meet the manufacturer's own standard-the intended design-and that the defect arising therefrom caused injury and damage.78 Once the plaintiff has established these elements, the burden shifts to the defendant who must show the defect is not due to breach of duty by the manufacturer or any of its employees.79 However, the introduction of rebuttal and exculpatory evidence is seldom successful because the burden of proof is high.80

Sometimes, it can be extremely difficult for the plaintiff to establish that the defect already existed when the product was placed into the market, especially if the defect could have been caused subsequently by improper use of the product. This issue was raised in a series of cases in which the plaintiffs were injured by exploding bottles of sparkling mineral water or lemonade, packaged in reused bottles.81 In these cases, the Federal Supreme Court has charged the defendant with a Befundsicherungspflicht (duty to ensure that all defective products are removed before they leave the defendant's possession).82 This duty goes further than the ordinary duty to inspect the goods-it requires that every single product be checked.83 This duty is based on the notion that significant risks to the life and health of the consumer (Besondere Schadenstendenz) are generated during the production process.84 The control of these risks is considered to be a main emphasis of the production process.85 If the manufacturer fails to perform his duty to inspect every single product, he is charged with the burden to prove that the defect occurred after the product was put into circulation.

The duty described above has so far only applied to manufacturers of mineral water bottles, though future application to other products is possible. An exact determination of the type of product to which it may be applied is uncertain because the Court has only vaguely described the criteria to be satisfied for the application of duty.86 Some scholars speculate that the courts will hold this duty applicable to situations in which serious injuries were caused.87

iii. Failure to Instruct and Warn

With respect to a failure to instruct, the burden of proof is the same as in cases involving manufacturing and design defects.88 If the risks inherent in the product only became obvious at a later time, however, the situation is different.89 In these cases, the courts have refused to shift the burden of proof to the defendant because the plaintiff has access to scientific knowledge and the reported experiences of other users.90 This approach is not undisputed. Some scholars rightly point out that the manufacturer still has greater access to other information-such as statistics and general scientific literature-which is necessary to prove the case.91 According to these scholars, the manufacturer should carry the burden of proof.92

B. Liability under Section 823, Paragraph 2 of the Civil Code

Under Section 823, Paragraph 2 of the Civil Code,93 a person who infringes a law intended for the protection of others must compensate for any damages.94 A protective law, within the meaning of the Civil Code, can be defined as a provision which is designed to protect the public as well as individual interests. A protective law can be any written, substantive, legal provision; thus, even directives made by administrative bodies fall within the ambit of Paragraph 2.95 Technical provisions issued by private organizations like the Deutches Institut fir Normung (DIN), however, do not meet this requirement.96 A statute is a protective law if the legislature, by creating a legal basis for liability, intended to protect the interest of individuals.97 Under this reasoning, it is insufficient if the individual is merely protected as a member of the public at large.98

Existing public laws related to the safety of products contain numerous provisions for the protection of interests of individuals which create civil liability as well. Such provisions can be found in the German Food Act,99 the Toxic Substances Control Act,100 the Plant Protection Law,101l the Apparatus Safety Act,102 and in many other statutes.103 On August 1, 1997, the Law on the Safety of Products104 implemented the European Directive on the General Safety of Products.105 This new statute creates several obligations for the manufacturer. First, the manufacturer may only distribute safe products. 106 Second, the manufacturer is obliged to duly and reasonably inform the consumer of the safetyrelated risks of the products when they are placed on the market. 107 Finally, the manufacturer must take adequate measures to discover and eliminate product-related risks, even if the product has already entered the market.108 These rather vague obligations shall empower the administration to act in the public interest by, for example, recalling or giving notification of unsafe products.109 Since these provisions, however, do not directly serve the protection of individual interests, they are not considered protective law.110

Liability under Section 823, Paragraph 2 of the Civil Code requires a breach of a duty.111 In contrast to Paragraph 1, the duties that trigger liability must be promulgated by the legislature.112 Primarily, this creates greater legal certainty. Compared to the more general claim of Paragraph 1, the great practical significance of this provision stems from the fact that the element of fault, which is also required under Paragraph 2, is presumed because of the objective violation of a protective law.113 It is of little importance that the violation of a protective law might open the possibility to recover pure economic loss because the protective laws-including those related to product safety-are seldom intended to provide such broad protection.114

C. Vicarious Liability Section 831 of the Civil Code

According to Section 831, Paragraph 1, a person who employs another to do work is liable for damages that the employee, through the performance of his duties, unlawfully causes to a third party.115 The presumption that the employer either negligently selected his employees, supplied them with the improper equipment, or was otherwise negligent is rebuttable by the employer.116 Courts have found a way, however, to avoid the effect of exculpatory proof by creating a duty to organize one's enterprise under Section 823, Paragraph 1. This duty entails the obligation to create the basis for a corporate organization that minimizes the risk of product defects.117

D. Damages for Pain and Suffering-Section 847 of the Civil Code

Personal injury does not lead merely to pecuniary loss, but also to pain and suffering. However, under German law, recovery of damages for pain and suffering is only granted in those exceptional cases expressly provided by statute.118 Under Section 847, Paragraph 1 of the Civil Code, the plaintiff may claim fair compensation for damages which are not merely damages to property, if there is also injury to body or health.119 The function of the damages award for pain and suffering is to compensate the plaintiff for his or her injury and to give satisfaction to the injured (Genugtuung). Damages for pain and suffering are not purported to punish the tortfeasor and cannot be considered punitive damages.120 Furthermore, the award of damages for pain and suffering generally will not reach large amounts.121 An award of US$50,000 is considered exceptional.122

E. Liability of Several Persons; Comparative Fault; Statute of Limitations

Several people who are responsible for tort damages are held jointly and severally liable.123 If the plaintiff has recovered from one of several jointly liable tortfeasors, this tortfeasor has a right to contribution against the other tortfeasors on a pro rata basis.124

The defendant's liability can be reduced if the plaintiff has contributed to causing the damage.125 The reduction depends on whether the injury has been caused mainly by one party or by the other.126

With respect to the statute of limitations, the period is more favorable to the plaintiff than under contract law.127 A claim for tort compensation is barred after three years from the time at which the injured party obtained knowledge of the injury and of the person liable, and at the latest, thirty years from the harmful act.128 Under German law, the statute of limitations is tolled as long as a lawsuit is pending or if the debtor has acknowledged the claim.129 The court does not take into account the statute of limitations ex officio; instead the defendant must raise it as an affirmative defense.

IV. STRICT LIABILITY CLAIMS UNDER THE GERMAN PRODUCTS LIABILITY ACT OF 1990

The Products Liability Act (the Act) establishes a strict liability claim for defective products.130 The Act grants damages for personal injury as well as for property loss.131 However, the Act does not allow recovery for pain and suffering damages or other noneconomic injury. As a result, negligence-based liability is still of utmost importance and will have to be considered in cases involving noneconomic losses. Another restriction of the Act is imposed by Section 1 under which damages for property injury may only be claimed if the product is intended for private use or consumption and has also been used that way.132

A. Terminology

The term "product" is clearly defined and means all movables, including electricity even if incorporated into another movable or immovable.133 Primary agricultural products of stock-farming, beekeeping, fishing, and hunting are not considered "products" under the Act unless they have undergone initial processing.134 Services do not fall within the reaches of the Products Liability Act, but software, being regarded as movable, is included. The Act does not apply to pharmaceutical products that are subject to the Arzneimittelgesetz (Pharmaceutical Products Act).135

B. Concept of Defect

According to the Act, a manufacturer is held liable if a person dies, suffers injury, or suffers a decline in health "as a result of a defect."136 The term "defect" is at the center of a products liability claim and requires further explanation. The Act deems a product defective if it does not provide that degree of safety which can be justifiably expected under the totality of the circumstances.137 In particular, this analysis must focus on the complete presentation of the product, its reasonably expected use, and the time when the product was placed on the market.138 The Products Liability Act was designed to protect not only consumers but also bystanders; therefore, the German legislature decided that in specific cases the safety expectations of the general public should be decisive.139

A product might be "defective" due to its "presentation."140 The term "presentation" includes warnings and instructions by which the risk-related injuries of products can be reduced.141 The meaning of presentation, however, is broader than the meaning of warning and instruction and includes every activity by which the manufacturer or an authorized third party presents the product to the general public and to the consumer, as far as the qualities presented are directly related to safety expectations.142 The manufacturer can create or enhance such safety expectations, for example, by describing the product or its purpose,143 by guaranteeing its qualities, by advertising specific safety characteristics of the product, or by giving advice and instructions.144 Under Section 3(1)(a) of the Act, the manufacturer may also lessen safety expectations by warning the consumers and the public of risks145 which can occur in the case of improper use,146 foreseeable imprudent use,147 or foreseeable misuse of the product.148 Insofar as this does not amount to a limitation of liability in advance as prohibited by Section 14 of the Act, such lessening of safety expectations is admissible.149

Furthermore, a product is not considered defective solely by reason that an improved product was subsequently put into circulation.150 The German legislature has not exercised its option of excluding the Einwand des Entwicklungfehlers (development risk defense).151

C. Causation

The plaintiff is entitled to recover damages resulting from an injury caused by a defective product.152 The element of causation follows traditional German tort law principles.153

D. The Defendant Manufacturer

Products liability under the German Products Liability Act means liability of the manufacturer.154 The range of available defendants is stipulated in Section 4 of the Act. First, the person who manufactured the finished product, manufactured a part of it, or provided the raw material can be held liable.155 Liability is also extended to "quasimanufacturers"-people holding themselves out as manufacturers by labeling the product in their own name, trademark, or other distinguishing feature.156 Further, the Act applies to any person importing products into the European Economic Area for sale, hire, lease, or any other form of distribution for economic purposes in the course of business.157

The supplier of a product will be held liable in the same manner as a manufacturer if the actual manufacturer cannot be identified, unless the supplier provides the plaintiff with the identity of the manufacturer or his own supplier within one month after having received the request.158 This rule is also applied when the importer of a defective product is unidentifiable even though the name of the manufacturer is known to the parties.159 Thus, the Act extends the concept of products liability to parties who could not be successfully sued for damages under traditional German tort law without requiring the plaintiff to prove they had violated their duties of care.160 The defendant importer, quasi-manufacturer, or producer of a component may not defend himself by alleging that it was impossible to discover the design or manufacturing defect.161

The liability of all defendants is joint and several.162 If the plaintiff has recovered full compensation from one of several joint tortfeasors, this tortfeasor has a right to contribution against the other tortfeasors.163 Unless otherwise provided by law or by agreement, the award is determined on the basis of each tortfeasor's contributory negligence.164 In addition, the Civil Code governs the allocation of liability among joint tortfeasors held liable under the Act.165

E. Damages

Pursuant to the Act, the manufacturer is obliged to compensate the successful plaintiff for damages ensuing from death, personal injury, or property injury caused by a defective product.166 The German Products Liability Act specifies the recoverable damages in Sections 7 to 11.167 Since the Act fails to define the term "damage," these provisions are considered to have a declaratory meaning.168 Accordingly, German autonomous law remains applicable when the damage amount is in question.169 The Act itself provides as follows: in case of death, bodily or health injury, damages include medical expenses, impairment of earning capacity, as well as costs of increased needs resulting from the injury in cases of death or bodily injury. 170 Funeral expenses may be claimed by the person responsible for their payment.171 Furthermore, a decedent's dependents may make a claim for support against the defendant.172 This support claim is also available to an unborn child of the decedent.173 For the future lost earnings, costs of increased needs, and lost support are compensated by periodic payments.174

Damages according to the Products Liability Act, however, are subject to diverse limitations resulting from European and national policy considerations. First, the Act does not provide for non-economic damages. Accordingly, damages for pain and suffering must be claimed under the traditional negligence-based tort rule of Section 847 of the German Civil Code.175 This omission is one of the major reasons for the continuing significance of German autonomous law in the field of products liability. Besides excluding noneconomic damages, the Products Liability Act also limits the amount of material damages in two ways: 1) in case of property injury, the Act only entitles the plaintiff to a cause of action if damages exceed 1125 DM176 and 2) it places a 160,000,000 DM cap on recovery of damages resulting for personal injury caused by one product or one kind of product having the same defect.177

F. The Manufacturer's Defenses

The German Products Liability Act introduces several defenses against a strict products liability claim. The manufacturer is exonerated if specific circumstances listed in the Act "exculpate" the manufacturer.178 Furthermore, the statute of limitations and the repose statute bar a plaintiff's strict products liability action.179 Finally, the plaintiff's conduct might lead to a reduction of recoverable damages under the principles of comparative fault.180

The Exonerating Causes of Section 1, Paragraph 2 of the Act

Pursuant to this provision, the defendant is not liable if he proves he did not place the product on the market.181 Nor is he liable if at the time the product was put on the market, it was not defective.182 The manufacturer may prove this either by showing the defect could not have existed when the product was placed into the market or by showing the defect actually was caused after the product was put into circulation.183 This exonerating causes becomes particularly relevant in case of manufacturing defects; it may be applicable to failure to instruct or warn of defects only in exceptional cases.184 Design defects do not fall under this defense because they typically exist from the time when the product was made. The manufacturer is also exempt from liability if he has neither produced the product for sale or any other form of distribution, nor manufactured and distributed the product in the course of business activities.185 The purpose of this affirmative defense is to exclude from strict products liability products that are not produced and distributed for commercial purposes.186

A further defense may be used if the product, though defective, is in compliance with mandatory legal provisions at the time it leaves the manufacturer's control.187 However, compliance with mandatory legal rules is not a complete defense. Rather, the manufacturer shall not be compelled to choose between violating a safety regulation and risking civil liability.188 Accordingly, furthermore, the scope of this exculpatory defense is limited by the narrow meaning of detailed mandatory rules. The specific provisions must be provided or designated by law or regulation189 and must require the manufacturer to produce without leaving him any choice as to product design.190 These requirements are not met by the DIN or other privately issued industry rules, which only give recommendations for a safety standard.191 Minimum safety standards provided by national and European law leave it to the manufacturer to produce a safer design and thus do not fall within the meaning of detailed mandatory rules either.192 Any safety standard, however, can become essential if it influences the safety expectations of the consumer, the disappointment of which might be cause to deem a product defective.193

Finally, the Act shields the manufacturer from liability if he proves that the defect could not have been discovered considering the state of the art at the time the product was placed on the market.194 The term "state of the art" is objective and goes beyond common manufacturing practices.195 Based on the Directive's purpose of harmonizing products liability standards within the Union, the European autonomous dimension of the state of the art is not restricted to the single Member State but includes the state of the art in Europe.196 However, in case the state of the art progresses after the product was put on the market, the manufacturer can be liable in tort-based negligence if he breaches his duty to monitor the product.197 The duty to monitor the product does not arise under the Products Liability Act because the defect must have existed when the product was placed in the market.198

2. Reduction of Liability

The defendant's liability can be reduced or totally eliminated if the injured party contributed to causing the damage.199 When the damage was caused simultaneously by a defect of the product and by the act of a third party, the manufacturer's liability is not reduced.200

3. Time-Based Defenses

Liability under the Products Liability Act is subject to two time-based defenses. A statute of limitations bars strict products liability claims after three years.201 The period begins to run when the person entitled to compensation knew or should have known of the damage, the defect, and the identity of the manufacturer.202 The Act goes further than Section 852 of the Civil Code, which literally requires knowledge, but according to the Federal Supreme Court reckless disregard is sufficient.203 As under the Civil Code, the statute of limitations defense cannot be raised by the judge ex officio but must be expressly claimed by the defendant as an affirmative defense.204 The statute of limitations is tolled when negotiations are pending between the parties.205 In addition, the provisions of the Civil Code are applicable.206

Under the repose statute of the Act, a strict products liability claim expires ten years after the manufacturer has put the defective product into circulation.207 This rule does not apply during a pending lawsuit or summary judgment proceeding208-if the claim has been settled by judgment, or if it is subject to any other form of executory decree, settlement, or allowance.209 The repose statute is taken into account ex officio.210 In general, statutes of limitations and repose are commonly recognized and rarely questioned by scholars.

G. Burden of Proof

The plaintiff has the burden of establishing his case by proving the defect, the damage, and the causal connection between the defect and the damage.TM The manufacturer must prove the exonerating defenses.212 In legal practice, the most likely scenario will be a defendant seeking to establish that the product was not defective when put on the market by showing that it was subsequently misused.213 If it is unclear when the product became defective, the dispute will be decided by weighing the circumstances.214 Consideration is also given to the fact the manufacturer is supposed to have better access to product information.215 The manufacturer may defend himself successfully if a preponderance of the evidence shows that the product became defective after being placed on the market.216 Thus, the standard of evidence is lower compared to the general rules of civil procedure.217 Apart from this exception, the general rules of civil procedure are applicable.218

V. LIABILITY UNDER THE GERMAN PHARMACEUTICAL PRODUCTS ACT OF 1976

A. Background

The old Pharmaceutical Products Act of 1961 prohibited the production of drugs without a special license unless they were produced by a pharmacy.219 Furthermore, it required drugs to be registered at the Federal Health Agency before being allowed into circulation.220 Nevertheless, the Federal Health Agency was obliged to register the drug if the legally required documents were provided with the application for registration.221 The German legislature rejected general testing of pharmaceutical effectiveness and safety through governmental administrative bodies (already a practice in the United States at that time) as an unreasonable burden for the drug producer.222 Thus the sole purpose of the required drug registration was to supervise implementation of the Pharmaceutical Products Act and to achieve an overview of drug production in Germany.223

As early as 1963, the legislature modified the Pharmaceutical Products Act reasoning that the duty to register drugs at the Federal Health Agency did not sufficiently protect public health.224 Subsequently, the Federal Health Agency was empowered to require evidence that a drug, whose effectiveness was not generally known, was sufficiently tested and that the drug was safe if properly used.225 Still, the Federal Health Agency was not authorized to test the drug on its own. Instead, the Agency had to base its decisions on pharmaceutical and clinical test reports provided by the drug manufacturers.226

However, the Contergan (Thalidomide) disaster clearly showed that also the modified Pharmaceutical Products Act of 1961 was not able to sufficiently ensure drug security or provide a basis for recovery of damages by injured drug consumers. The new act of 1976 purported to eliminate these deficiencies and to adapt German pharmaceutical law to the international standard in the field.227 In particular, the new Pharmaceutical Products Act established a strict liability claim for pharmaceutical products.228

B. Details of Liability

Liability under the Pharmaceutical Products Act of 1976 is similar to liability under the Products Liability Act. Under the Pharmaceutical Products Act, drug consumers can claim damages up to a certain limit without having to prove fault if the manufacturer placed a defective drug on the market.229 In other respects, drug liability has numerous peculiarities.

Strict liability does not apply to all drugs. Only drugs that are produced for use by humans and sold to consumers within the territory of Germany fall within the ambit of the Pharmaceutical Products Act.230 Strict liability for drugs is based on the notion that the use of powerful chemical substances bears high risks.

Strict liability arises only if the consumer has suffered injury to his health due to the damaging effects of a properly used drug.231 The damaging effects must exceed the degree that is justifiable in light of the current state of medical science and must result from the process of development and production of the drug.232 The manufacturer may not defend himself by showing that the drug complied with the state of the art when the drug was distributed.233 The manufacturer is also held strictly liable if the labels and instructions did not conform to the state of medical science when the product was put on the market.234

Liability focuses on the pharmaceutical entrepreneur, who places the drug on the market in his name.235 The pharmaceutical entrepreneur could be anybody in the chain of distribution. The pharmaceutical entrepreneur is obliged to provide covering funds (Deckungsvorsorge).236 In practice, the entrepreneur generally will meet this requirement by taking out indemnity insurance. In order to ensure that the entrepreneur can be held liable under civil and criminal law, he must reside within the European Economic Area.237

Unlike U. S. courts, neither the German legislature nor German courts have attempted to ease the standard of proof for causation in cases involving pharmaceutical products. Under German law, there is no market share liability as introduced in Sindell v. Abbott Laboratories.238 In general, the strict prerequisites of Section 830, Paragraph 1 of the German Civil Code, provide that each tortfeasor can be held liable if a determination cannot be made as to which of several tortfeasors has caused the damage.239 Yet, these prerequisites are not fulfilled when the identity of the manufacturer of the defective drug is in question.240

The Pharmaceutical Products Act also provides numerous restrictions. Primarily, the drug consumer may only recover damages resulting from personal injury.241 Property injury and non-economic damages are not recoverable.242 Furthermore, only the drug consumer may claim damages.243 For example, the Act would not allow a third party who was injured in a car accident caused by the user of a defective drug to recover the damages for his personal injury. The Pharmaceutical Products Act limits the amount of recoverable damages. If only one person is injured or killed, the damages may not exceed 1,000,000 DM.244 There is also a cap of 200,000,000 DM per drug for damages resulting from the personal injury or death.245

C. Reformatory Efforts

A long-standing critique of strict liability under the Pharmaceutical Products Act is that it does not allow damages for pain and suffering. Recently, cases involving people who contracted HIV through contaminated blood and blood products have prompted reform efforts. The Bundesrat suggested lowering the plaintiff's standard of proof.246 Further, the Bundesrat suggested shifting the burden of proof with respect to the drug's lack of defect and the adequacy of the instructions to the pharmaceutical entrepreneur.247

To date, these reform efforts have not been successful. One reason for the legislature's reluctance in this field lies in the dispute over the scope of the European Products Liability Directive. It is unclear whether the German legislature still has the authority to autonomously reform the national drug liability law whether this is prohibited by the Directive.248

VI. CONCLUSION

Taking into consideration the development of products liability law by the German courts, one concludes this development was successful. German courts recognized early that the protection against defective products is the prime task of tort law. This decision was resoundingly affirmed by the European Products Liability Directive.

The courts have evolved a specific products liability law by establishing duties of care within the system of general tort law. The duties of care have been refined in favor of the plaintiff which in turn has led to a heightened standard of liability. The introduction of liability wholly without negligence was impossible. However, the courts have created a standard of liability which is close to strict liability.

Though the courts have been heavily criticized, they have rightly continued developing the concept of Weiterfresserschaden (additional damages resulting from the defect). Certainly, the criteria for drawing the balance between the interest in the utility and value of the products, which is protected by contract law, and the interest of people in the integrity of their belongings and possessions, which is protected by tort law, could be improved. However, the courts have not used these difficulties as an excuse to surrender products liability in favor of contract law to the detriment of the consumer, as some of their critics have proposed.

The line between the manufacturer's responsibility and the user's responsibility for the use of the product was correctly drawn. The courts have abstained from overloading this issue with policy considerations; instead, they have preferred solutions that give effect to the functions of tort law. Judges recognize that warnings and instructions lose their effect if the user is inundated by them. Thus, courts have tried to balance the responsibility that manufacturers owe the consumers with the responsibility that individuals must take to protect themselves.

From the point of view of the consumer, it is doubtful whether the existing protection is sufficient. Though the German products liability law is highly developed, it is extremely fragmented and therefore difficult to apprehend. The Products Liability Act has not improved this situation significantly. Because the Act does not allow recovery for pain and suffering, it has not become important in practice. The insignificant number of court decisions in the area of products liability further casts doubt on the effectiveness of products liability claims. Presumably, the difficulties of proving causation and the costly court proceedings prevent many injured parties from seeking the enforcement of their claims in court. It is true the German system of health and accident insurance, in general, covers the victim's medical expenses as well as the loss of future earnings for a certain period. However, the social security carriers to whom the claims are assigned after they have paid the medical expenses, prove to be reluctant to bring an action against the tortfeasor into court.249

1. Gesetz fiber die Haftung far fehlerhafte Produkte [Produkthaftungsgesetz] v. 15.12.1989 (Bundesgesetzblatt, Teil I [BGBI. I] S 2198) [hereinafter Products Liability Act]. The Products Liability Act entered into force on January 1, 1990. Id. Sj 19.

2. Council Directive 85/374 of 25 July 1985 on the Approximation of the Laws, Regulations and Administrative Provisions of the Member States Concerning Liability for Defective Products, 1985 O.J. (L 210) 29.

3. Gesetz Ober den Verkehr mit Arzneimitteln [Arzneimittelgesetz] v. 24.8.1976 (BGBI. I S. 2445) in der Fassung der Bekanntmachung v. 19.10.1994 (BGB1.l S. 3018), zuletzt geandert durch Ges. v. 25. Februar 1998 (BGBI. I S. 374) [hereinafter Pharmaceutical Products Act].

4. The term "autonomous" is used to refer to law that emanates from the German sovereign, in contrast to German law that is imposed by European law through the means of directives for example. 5. See Products Liability Act, supra note 1, 1.

6. See 2 B.S. MARKESIMS, THE GERMAN LAW OF OBLIGATIONS, THE LAW OF TORTS: A COMPARATIVE INTRoDUCTIoN 84-85 (3d ed. 1997).

7. See 463, sentence 1, Borgerliches Gesetzbuch [BGB, translated in THE CIVIL CODE OF THE GERMAN EMPIRE 115 (Walter Loewy trans., Rothman & Co. 1997) [hereinafter GERMAN CIVIL CODE]. 8. See MARKESINIS, supra note 6, at 84-85. 9. See id. at 92.

10. See 477, paragraph 1, BGB, translated in GERMAN CIVIL CODE 117.

11. See MARKESINIS, supra note 6, at 90. 12. See ut at 56.

13. But see Bundesgerichtshof [Supreme Court] [hereinafter BGH], Urt. v. 23.7.1997, Neue Juristische Wochenschrift [NJW], 50 (1997), 3227 (3228) (distinguishing between the liability for breach of an independent consultancy agreement with a statute of limitations of 30 years under 195 BGB, translated in GERMAN CIVIL CODE 49, and the liability for breach of a duty to give proper sales advice based on the sales contract with a statute of limitations of six or twelve months under 477(1) BGB, translated in GERMAN CIVIL CODE 117). 14. See id

15. See BGH, Urt. v. 24.11.1976 (Floater Switch Case), Entscheidungen des Bundesgerichtshofes in Zivilsachen [BGHZ] 67, 359 (360-61) (holding that the buyer can recover property damages because a defective switch started a fire damaging the buyer's business).

16. Termed Vertrag mit Schutzwirkung.ftir Dritte (contract with protective effects for third parties). See Helmut Heinrichs, Kommentare, in Palandt: Birgerliches Gesetzbuch 328 BGB Rz. 13 (58th ed. 1999). 17. See BGH, Urt. v. 26.11.1968 (Fowl Pest Case), BGHZ 51, 91 (102) (grounding liability on the possibility that additional precautions by the vaccine manufacturers would have averted the bottling of the dangerous vaccine).

18. Section 823, paragraph 1, BGB, translated in GERMAN CIVIL CODE 203. 19. See id.

20. See Fowl Pest Case, supra note 17, at 98. 21. French Civil Code, Article 1382.

22. See 823, paragraph 1, BGB, translated in GERMAN CIVIL CODE 203. 23. See HErN KOTZ, DELiKTSRECHT Rz. 71 (8th ed. 1998). 24. See Heinz Thomas, Kommentare, in PALANDT: BURGERLICHES GESETZBUCH 823 BGB Rz. 31 (58th ed. 1999).

25. See BGH, Urt. v. 9.12.1958, BGHZ 29, 65 (74-75). In this case, the defendant's negligent activities led to the severing of an electrical cable, thereby causing a stoppage of the plaintiff's electrically operated machines. The plaintiff was not able to recover for the profit he would have made using his machines without the power failure. But see BGH, Urt. v. 4.2.1964, BGHZ 41, 123 (127). In this case, the defendant's negligent activities led to the severing of an electrical cable, thereby causing a power shortage which affected the plaintiff's electrically operated egg-hatching machine. The plaintiff was able to recover both the value of the destroyed eggs in the egg-hatching machine and the profit he would have made on those destroyed eggs. However, lacking a property injury he would not have been able to recover the profit he would have made without the power failure. See BGH, Urt. v. 9.12.1958, BGHZ 29, 65 (74).

26. There must be an injury resulting from contract relation (Positive Vertragsverletzung). See also 826 BGB, translated in GERMAN CIVIL CODE 203. 27. See 823, paragraph 1, BGB, translated in GERMAN CIVIL CODE 203. 28. See Thomas, supra note 24, 823 BGB Rz. 58. 29. See HANS CLAUDIUS TASCHNER & EDWIN FRIETSCH, PRODUKTHAFrUNGSGESETZ UND EGPRODUKTHAFruNGSRICHTLINIE Rz. 55 der Einfuhrung (2d ed. 1990).

30. See Ulrich Foerste, Deliktische Haftung, in 1 PRODUKTHAFTUNGSHANDBUCH 24 Rz. 1 (Friedrich Graf von Westphalen et al. eds., 1997).

31. See, e.g., BGH, Urt. v. 7.12.1993, NJW, 47 (1994), 517 (518) (finding a company importing a pipecontaminating product negligent because the company failed to warn its users of the product's defects). 32. See Uwe Diederichsen, Die Deckung des Produkthaftpflichtrisikos im Rahmen der Betriebshaftp7ichtversicherung, 22 VERSICHERUNGSRECHT [VersR] 1077, 1094 (1971).

33. See BGH, Urt. v. 2.6.1980, BGHZ 77, 215 (218); BGH, Urt. v.17.3.1981, BGHZ 80,186 (189); BGH, Urt. v. 18.1.1983, BGHZ 86, 256 (258, 259); BGH, Urt. v. 25.10.1988, BGHZ 105, 346 (355); BGH, Urt. v. 21.11.1989, NJW, 43 (1990), 908; BGH, Urt. v. 12.2.1992, BGHZ 117, 183 (187); BGH, Urt. v. 24.3.1992, NJW, 45 (1992), 1678; BGH, Urt. v. 5.5.1992, VersR 45 (1994), 319; BGH, Urt. v. 31.3.1998, VersR, 49 (1998), 855 (856) (cases recognizing that tortious duties relate to the interest that people have in the integrity of their belongings).

34. See infra notes 35-38.

35. See BGH, Urt. v. 30.5.1963, BGHZ 39, 366 (367) (denying product liability claim because the property was never owned free from defects and, therefore, was not diminished by the faulty construction). 36. See Floater Switch Case, supra note 15, at 364-65.

37. See BGH, Urt. v. 18.1.1983, BGHZ 86, 256 (260-62). For further explanatory remarks, see also BGH, Urt. v. 21.11.1989, NJW, 43 (1990), 908 (909); Erich Steffen, Die Bedeutung der "Stoffgleichheit" mit dem "Mangelunwert "fur die Herstellerhaftung aus Weiterfresserschaden, VersR 39 (1988), 977.

38. See BGH, Urt. v. 14.5.1985, NJW, 38 (1985), 2420 (finding a producer liable for a defective compressor); BGH, Urt. v. 12.2.1992, BGHZ 117, 183 (finding liability for a capacitor defect); BGH, Urt. v. 24.3.1992, NJW, 45 (1992),1678 (finding liability for an auto defect). In German products liability doctrine the issue is discussed under the heading of weiterfressender Mangel (defect with additional consequences).

39. See 477, paragraph 1, BGB, translated in GERMAN CIVIL CODE 117. 40. See 852, paragraph 1, BGB, translated in GERMAN CIVIL CODE 21s11. 41. See, e.g., 823-53 BGB, translated in GERMAN CIVIL CODE 203-11. 42. See 823, paragraph 1, BGB, translated in GERMAN CIVIL CODE 203. 43. See BGH, Urt. v. 9.12.1986, BGHZ 99, 167 (170). 44. See id.

45. See KOTZ, supra note 23, at Rz. 435-37. 46. See id. 47. See id.

48. See BGH, Urt. v. 27.9.1994, NJW, 47 (1994), 3349 (3350) (holding the manufacturer liable for severe damages caused by a nurse's confusion between an electrode cable and a power cord on a breathing monitor). 49. See BGH, Urt. v. 21.11.1989, NJW, 43 (1990), 908 (909). 50. See 5 Hans-Joachim Mertens, Unerlaubte Handlungen, in MONCHENER KOMMENTAR ZUM BORGERLICHEN GESETZBUCH 823 BGB Rz. 284 (3d ed. 1997). 51. See BGH, Urt. v. 12.11.1991,BGHZ 116,60(61). 52. See id at 67. 53. See id. at 69.

54. See BGH, Urt. v. 31.1.1995, NJW, 48 (1995), 1286 (1287). 55. See id 56. See id

57. See Bundesverfassungsgericht [BVerfG], Beschl. v. 16.10.1996, NJW, 50 (1997), 249 (250). 58. See Friedrich Graf von Westphalen, Das deutsche Produkthaftungsgesetz, in 2 PRODUKTHAFRUNGSHANDBUCH 6 62 Rz. 50 (Friedrich Graf von Westphalen et al. eds., 1991). 59. The question, whether the duty to instruct is subordinate in nature, is disputed among German scholars. While Schmidt-Salzer takes the approach that the duty to instruct and warn is subordinate, Graf von Westphalen takes the position that this duty supplements the duty to construct and design nondefective products. Compare

Joachim Schmidt-Salzer, Instruktionspflichten, in I KOMMENTAR EG-RICHTLINIE PRODUKTHAFTUNG Rz. 168 zu Art. 6 (Joachim Schmidt-Salzer & Hermann H. Hollmann eds., 1986), with Graf von Westphalen, supra note 58, 62 Rz. 51.

60. See HANS JOSEF KULLMANN & BERNHARD PFISTER, PRODUZENTENHAFTUNG 3604, at 9 (1997). 61. See BGH, Urt. v. 9.12.1986, BGHZ 99, 167 (170).

62. See id at 168. 63. See id at 169. 64. See id at 167. 65. See id. at 172. 66. See id at 174. 67. See id. at 172. 68 See id.a167.

69. See BGH, Urt. v. 7.12.1993, NJW, 47 (1994), 517 (517). For a complete overview of the conflicts of laws and transnational litigation issues in products liability cases, see MANFRED WANDT, INTERNATIONALE PRODUKTHAFTUNG (1995).

70. See BGH, Urt. v. 7.6.1990, NJW, 43 (1990), 2560 (noting a manufacturer's duty to recall a dangerous leather spray in a case involving criminal rather than civil liability). But see OLG Frankfurt/Main, Urt. v. 24.10.1995, VersR, 47 (1996), 982 (holding that a warning may be sufficient).

71. But see the decision of the Landgericht Hamburg in which the trial court held that the duty to recall a product includes the duty to repair the defective product free of charge, Landgericht [LG] Hamburg, Urt. v. 21.7.1992, VersR, 45 (1994), 299.

72. See 823, paragraph 1, BGB, translated in GERMAN CIVIL CODE' 203. See also Friedrich Graf von Westphalen, Deliktische Haftung, in I PRODUKTHAFTUNGSHANDBUCH 24 Rz. 18 (Friedrich Graf von Westphalen et al. eds., 1997).

73. See Hans Stoll, Haftungsverlagerung durch beweisrechtliche Mittel, in 176 ARCHIV FOR DIE CIVILISTISCHE PRAXIS [AcP] 145, 167-71 (Wolfgang Grunsky et al. eds., 1976). 74. See id 75. See id at 173.

76. See Foerst, supra note 30, 30 Rz. 21. 77. See id. 30 Rz. 20. 78. See MARKEsns, supra note 6, at 90. 79. See id

80. See KOTZ, supra note 23, at Rz. 453a.

81. See BGH, Urt. v. 7.6.1988, NJW, 41 (1988), 2611 (Limonadenflasche); BGH, Urt. v. 8.12.1992, NJW, 46 (1993), 528 (Mineralwasserflasche); BGH, Urt. v. 9.5.1995, BGHZ 129, 353 (356) (Mineralwasser,flasche).

82. This duty is also called Statussicherungspflicht. See BGH, Urt. v. 7.6.1988, NJW, 41 (1988), 2611 (2614). Though the term Befundsicherungspflicht implies the duty to keep records of inspection results, this is not actually necessary. See BGH, Urt. v. 8.12.1992, NJW, 46 (1993), 529. 83. See BGH, Urt. v. 7.6.1988, NJW, 41 (1988), 2611 (2614); BGH, Urt. v. 9.5.1995, VersR, 46 (1995), 924.

84. See BGH, Urt. v. 8.12.1992, NJW, 46 (1993), 529. 85. See id.

86. See Joachim Schmidt-Salzer, Das Mehrwegflaschenurteil des Bundesgerichtshofs und die allgemeine Produktverschuldenshaftung, in PROD(IKTHAFrPFLICHT INTERNATIONAL [PHI] 146 (1988); DIETER MEDICUS, GRUNDWISSEN ZUM BURGERLICHEN RECHT Rz. 356 (2d ed. 1995). 87. See, e.g., Foerste, supra note 30, 30 Rz. 37.

88. See BGH, Urt. v. 12.11.1991, BGHZ 116, 60 (73) (construing BGH, Urt. v. 17.3.1981, BGHZ 80, 186 (195-99)).

89. See Foerste, supra note 30, (sec) 30 Rz. 79.

90. See id.

91. See, e. g., id. (sec) 30, Rz. 80.

92. See id.

93. Section 823, paragraph 2, BGB, translated in GERMAN CIVIL CODE 203.

94. See id.

95. See MARKES, supra note 6, at 9>93. 96. See id 97. See id.

98. See BGH, Urt. v. 5.2.1980, NJW, 33 (1980), 1792.

99. Gesetz zur Regelung der Sicherheitsanforderungen an Produkte und zum Schutz der CEKennzeichnung [Produktsicherheitsgesetz] 4 Abs 1 v. 22.4.1997 (BGBI. I S. 934) den Verkehr mit Lebensmitteln, Tabakerzeugnissen, kosmetischen Mitteln und sonstigen Bedarfsgegenst,den [Lebensmitteln und Bedarfsgegenstandegesetz] v. 15.8.1974 (BGBI. I S. 1945), in der Fassung der Bekanntmachung v. 9.9.1997 (BGBI. I S. 2296).

100. Gesetz zum Schutz vor gefihrlichen Stoffen [Chemikaliengesetz] v. 16.9.1980 (BGBI. I S. 1718), in der Fassung der Bekanntmachung v. 25.7.1994 (BGBI. I S. 1703). 101. Gesetz zum Schutz der Kulturpflanzen [Pflanzenschutzgesetz] v. 15.9.1986 (BGBI. I S. 1505). 102. Gesetz fiber technische Arbeitsmittel [Geratesicherheitsgesetz] v. 24.6.1968 (BGBI. I S. 717), in der Fassung der Bekanntmachung v. 23.10.1992 (BGBI. I S. 1793).

103. For a survey of laws that contain products liability provisions, see generally Mertens, supra note 50, 823 BGB Rz. 193-96.

104. Gesetz zur Regelung der Sicherheitsanforderungen an Produkte und zum Schutz der CEKennzeichnung [Produktsicherheitsgesetz] 4 Abs. 1 v. 22.4.1997 (BGBI. I S. 934). 105. See Council Directive 92/59 of 29 June 1992 on General Product Safety, 1992 O.J. (L 228) 24. 106. See id 4. 107. See id. 4 Abs. 2(1). 108. See id. 4 Abs. 2(2). 109. See id. 7-13.

110. This issue has not been decided by courts yet. See Rupert Vogel, Deutschland: Das neue Produktsicherheitsgesetz, in PHI 158, 162 (1997), for arguments for and against the assessment of the Products Safety Act as protective law.

111. Section 823, paragraph 2, BGB, translated in GERMAN CIVIL CODE 203. 112. See MARKESINIS, supra note 6, at 91.

113. See WANDT, supra note 69, at 285.

114. One of the few product safety related protective statutes that is designed to protect against pure economic loss is Section 3 of the German Cattle Feed Act [Futtermittelgesetz] v. 2.7.1975 (BGBI. 1. S. 1745). See also BGH, Urt. v. 25.10.1988, NJW, 42 (1989), 707 (709) (granting damages resulting from the official seizure of fish which was suspected to be contaminated by antibiotics). 115. See 831 (1), sentence 1, BGB, translated in GERMAN CIVIL CODE 205. 116. See ti 831 (1), sentence 2, BGB, translated in GERMAN CIVIL CODE 205. 117. See Foerste, supra note 30, 24 Rz. 299. 118. See 253, BGB, translated in GERMAN CIVIL CODE 65. 119.See See 847, paragraph 1, BGB, translated in GERMAN CIVIL CODE 209. 120. See MARKESINIS, supra note 6, at 921.

121. See id at 923. See also Lothar Jaeger, Hohe des Schmerzensgeldes bei t6dlichen Verletzungen im Lichte der neueren Rechtsprechung des BGH, VersR, 47 (1996), 1177. 122. See MARKESINIS, supra note 6, at 923.

123. With respect to the liability of several tortfeasors and their means to recover from each other and the transnational aspects of this issue, see generally Manfred Wandt, Ausland und RegreJ3, in SCHMIDT-SALZER (ED.) 2 KOMMENTAR EG-RICHTLINIE PRODUKTHAFTUNG 20-23 (1993).

124. See 426, paragraph 1, BGB, translated in GERMAN CIVIL CODE 106. 125. See 254, paragraph 1, BGB, translated in GERMAN CIVIL CODE 65. 126. See id

127. See 477, paragraph 1, BGB, supra note 10 and accompanying text . 128. See 852, paragraph 1, BGB, translated in GERMAN CIVIL CODE 210-ll 129. See id. See also 208 BGB, translated in GERMAN CIVIL CODE 53-54. 130. See Products Liability Act, supra note 1, t. 131. See id 1(1). 132. See id.

133. See id 1(2).

134. According to a proposed draft revising the Products Liability Directive, primary agricultural products shall be considered a product under the Directive. See Vorschlag fair eine Richtlinie des EuropBischen Parlamentes und des Rates zur Anderung der Richtlinie 85/374/EWG des Rates zur Angleichung der Rechts und Ver valtungsvorschriften der Mitgliedstaaten uber die Haftung far fehlerhafte Produkte, 1997 O.J. (C 337) 54. 135. See id; Pharmaceutical Products Act, supra note 3, IS(1).

136. See Products Liability Act, supra note 1, 1(1). 137. See id 3(1). 138. See id

139. See BUNDESTAG-DRUCKSACHEN, ll/2447, at 18 (1998) [hereinafter BT-DRUCKS.]. 140. See Products Liability Act, supra note 1, 3(1). 141. See Thomas, supra note 24, at Rz. 10 zu 3. 142. See KULLMANN & PFISTER, supra note 60 at 3604.

143. The Products Liability Act is not purported, however, to protect against pure economic loss. Accordingly, issues of definition may arise when the product does not comply with a warranted quality. Courts might be inclined to deny a claim based on tort law reasoning that the failure to conform with a contractual warranty may only be enforced under contract law. See Graf von Westphalen, supra note 58, 6 62 Rz. 41. 144. See id 62 Rz. 41-43.

145. See TASCHNER & FRIETSCH, supra note 29, at Rz. 31 zu 3. 146. See id at Rz. 43 zu 3.

147. See BGH, Urt. v. 12.11.1991, BGHZ 116, 60 (67).

148. See BGH, Urt. v. 24.1.1989, BGHZ 106, 273 (283) (concerning manufacturer's liability for marketing asthma spray without adequate warning that overdosage could be fatal when such use by a patient during an acute asthma attack was foreseeable). 149. See Graf von Westphalen, supra note 58, 62 Rz.52. 150. See Products Liability Act, supra note 1, 3(2).

151. See Council Directive 85/374 of 25 July 1985 on the Approximation of the Laws, Regulations and Administrative Provisions of the Member States Concerning Liability for Defective Products, 1985 O.J. (L 210) 29. See id. art. IS(1)(b) at 32.

152. See Products Liability Act, supra note 1, 1. 153. See Graf von Westphalen, supra note 58, 59 Rz. 39. 154. See Products Liability Act, supra note 1, 1(1). 155. See id. 4(1). 156. See id. 157. See id 4(2). 158. See id. 4(3). 159. See id.

160. The German Federal Supreme Court expressly declined to overrule its holding in which a "quasimanufacturer" may only be held liable under Section 823 (1) of the German Civil Code if he fails to perform the duty of care he owes to the plaintiff. See BGH, Urt. v. 7.12.1993, NJW, 47 (1994), 517 (519). In this case, however, the court was prepared to find Produktbeobachtungspflicht (duty to monitor a product placed into the market). See id.

161. See KOTz, supra note 23, at Rz. 471. 162. See Products Liability Act, supra note 1, 5. 163. See id. 164. See id.

165. See 421-26 BGB, translated in GERMAN CIVIL CODE 105-06.

166. See Products Liability Act, supra note 1, 1(1). 167. Id. 7-11.

168. See TASCHNER & FRIETSCH, supra note 29, at Rz. 2 zu 7. 169. See supra note 4.

170. See Products Liability Act, supra note 1, 7(1), 8. 171. See id 7(1). 172. See id 7(2). 173. See id 174. See id 9.

175. Section 847 BGB, translated in GERMAN CIVIL CODE 209. 176. See Products Liability Act, supra note 1, 11. 177. See id 10(1). 178. See id 1(2). 179. See id 12,13. 180. See id 6(l).

181. See id. 1(2). 182. See id.

183. See BT-DRUCKs., supra note 139, at 28, 30. 184. See TASCHNER && FRIETsCH, supra note 29, at Rz. 67-69 zu 1. 185. See Products Liability Act, supra note 1, 1(2). 186. See TASCHNER & FRIETSCH, supra note 29, at Rz. 78 zu 1. 187. See Products Liability Act, supra note 1, 1(2). 188. See BT-DRUCKS., supra note 139, at 15. 189. See Thomas, supra note 24, at Rz. 20 zu 1. 190. See Graf von Westphalen, supra note 58, 60 Rz. 65.

191. See BGH, Urt. v. 4.10.1972, BGHZ 59, 303 (308-09). For a general assessment of safety standards such as the German Industrial Standards, see WANDT, supra note 69, at 288. 192. See Norbert Kollmer, Zivilrechtliche und arbeitsrechtliche Wirkungen des Geratesicherheitsgesetzes, in NJW, 50 (1997), 2015 (2018). 193. See supra Part IV.B.

194. See Products Liability Act, supra note 1, 1 1(2). 195. See Graf von Westphalen, supra note 58, 60 Rz. 85.

196. See id. 60 Rz. 83.

197. See id 60 Rz. 90. See also supra Part III.A.3.b. 198. See Products Liability Act, supra note 1, 3. 199. See id 6(1) (referring to Civil Code Section 254 on comparative fault). 200. See id 6(2). 201. See id 12(1). 202. See id

203. See BGH, Urt. v. 5.3.1985, NJW, 38 (1985), 2022 (2023) (concerning doctor's liability for mishandling diagnosis of unborn child resulting in permanent birth defects). To the contrary, Graf von Westphalen argues that the holding of the Court supposes that under Section 852 "negligent" disregard of the facts is sufficient and that there does not remain any essential difference between Section 12, Paragraph I of the Act and Section 852 of Civil Code. See Graf von Westphalen, supra note 58, 67 Rz. 1. 204. See TASCHNER & FRIETSCH, supra note 29, at Rz. 5 zu 12. 205. See Products Liability Act, supra note 1, 12(2).

206. See id l2(3) (referring to Sections 194 through 225 of the Civil Code which establish the regime of prescription).

207. See id 13(1). 208. See id

209. See id 13(2).

210. See Graf von Westphalen, supra note 58, 67 Rz. 15. 211. See Products Liability Act, supra note 1, 1(4). 212. See id.

213. See Graf von Westphalen, supra note 58, 69 Rz. 3.

214. See id. 69 Rz. 7. The principle of weighing evidence by the judge is found in Section 286, Paragraph 1, ZivilprozeBordnung [ZPO] [Civil Procedure Statute]. 215. See Graf von Westphalen, supra note 58, 69 Rz. 7. 216. See id 69 Rz. 9.

217. See TASCHNER & FRIETSCH, supra note 29, at Rz. 71 zu 1. 218. See id at Rz. 137 1.

219. See Gesetz Uber den Verkehr mit Arzneimitteln [Arzneimittelgesetz] v. 16.5.1961 (BGBI. I S. 537) [hereinafter Old Pharmaceutical Products Act]. 220. See id 221. See id.

222. See Old Pharmaceutical Products Act, supra note 219, at 4. 223. Begrtindung des Regierungsentwurfes, BT-DRuCKs., 3/654, at 14 and following pages. 224. See Old Pharmaceutical Products Act, supra note 219, at 4.

225. See id.

226. See id.

227. See Pharmaceutical Products Act, supra note 3.

228. See id. (sec) 84.

229. See id.

230. See id.; see also WANDT, supra note 69, at 205, 213. 231. See Pharmaceutical Products Act, supra note 3, 84. 232. See id 233. See id

234. See id. 10, 84. 235. See id 5.

236. See id 94. According to Section 94 of the Pharmaceuticals Products Act of 1976, a drug producer must make sure that he can fulfill his legal obligation to recover damages caused by the drugs he has put into circulation. The drug producer may ensure coverage of damages by either having insurance or by providing a guarantee issued by a domestic or European bank. The purpose of the legal requirement of providing covering funds is to make sure that the damaged drug user can obtain compensation even if the drug producer has become insolvent/bankrupt.

237. See id. 9.

238. Sindell v. Abbott Laboratories, 607 P.2d 924, 947, cert. denied, 449 U.S. 912 (1980). 239. A question exists as to whether Section 830 of the German Civil Code also applies to strict liability claims that are not established by the Code itself, but by other specific statutes. However, this question is considered to be decided by the Federal Supreme Court in BGH, Urt. v. 15.12.1970, BGHZ 55, 96 (99-100). See generally KARSTEN OTTE, MARKTANTEILSHAFTUNG 91 (1988).

240. See LG Heidelberg, Urt. v. 31.1.1990, VersR, 41 (1990), 902 (hemophiliac patient infected with HIV through contaminated blood).

241. See Pharmaceutical Products Act, supra note 3, 84. 242. See id.

243. See Erwin Deutsch, Medizinrecht Rz. 882, 3rd ed., 1997. But see for the contrary interpretation of this issue, Gesetzentwurf der Fraktion der SPD, Entwurf eines Gesetzes zur Reform des Arzneimittelhaftungsrechts, BT-DRUCKs., 13/10019, at 4, 5 (1998). 244. See Pharmaceutical Products Act, supra note 3, 84. 245. See id.

246. See BUNDESRAT-DRUCKSACHEN, 690/94, v. 1.7.1994. 247. See Erwin Deutsch, Die fnfte Novelle zum Arzneimittelgesetz-Gesetzgebung im Vermittlungsausschufi, in NJW, 37 (1994), 2381 (2381-83).

248. See generally Dieter Hart, Zur Vereinbarkeit einer Reform des arzneimittelrechtlichen Haftungsrechts mit Europaischem Recht, in LAW AND DIFFUSE INTERESTS IN THE EUROPEAN LEGAL ORDER 701 (1997); see also WANDT, supra note 69, at 221; see also MANFRED WANDT, Deutsche Arzeimittelhaftung und EGProdukthaftung, in VersR, 49 (1998), 1059.

249. See Joachim Zekoll, The German Products Liability,Act, 37 AM. J. COMP. L. 809, 817 (1989).

[Author Affiliation]

MANFRED WANDT^

[Author Affiliation]

^Professor of Law, holder of the Chair in Private International and Comparative Law and managing director of the Institut for Rechtsvergleichung at the Johann Wolfgang Goethe University at Frankfurt. The author would like to thank Petra Geiger, LL.M., Columbia University, 1997.

Oops!

An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.