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Damages caused by defective products

by Insuralex / Wednesday, 28 June 2023 / Published in Belzuz Abogados Spain, News + Articles

Damages caused by defective products. Its regulation in Spanish and European Law. Case law on the subject.

At Belzuz Abogados (Insuralex Exclusive Member in Spain and Portugal) as expert lawyers in Insurance Law, we frequently come across claims based on damages caused by defective products. The purpose of this article is to examine the Spanish and European legislation in this area, as well as the interpretation and solutions offered by case law.

The product liability regime in Spain and the European Union

The regulation of damages caused by defective products, as part of consumer protection legislation, has occupied the legislator, both national and European, for quite some time. The first milestone in this area dates back to July 25, 1985, when Council Directive 85/374/EEC was enacted, which established the essential points of what would later become the legislation on defective products throughout the Union, introducing a criterion of personal liability that is still in force today. In Spain, as a result of the transposition of this Directive, Law 22/1994, of July 6, 1994, on civil liability for damage caused by defective products was passed, which is one of the rules that was recast in the current and well-known General Law for the Defense of Consumers and Users (LGDCU), approved by Royal Legislative Decree 1/2007, of November 16, 2007. This regulation, logically taking into account the interpretation and application made by the Spanish Supreme Court and by the CJEU in relation to the provisions of European Law, is the one that currently governs this subject, to which Chapter I of Title II (arts. 135 and following) is dedicated. By studying this regulation, we can ask and answer the following questions:

– What is the general principle governing damages caused by defective products? The law clearly establishes that producers are liable for the damages caused by the defects of the products they manufacture or import. This wording, used by art. 135 of the LGDCU, forces us to make two reflections.

Firstly, that the law establishes a regime of strict or quasi-strict liability, i.e., regardless of the producer’s conduct, since the rule is simply that it must compensate for the damage caused by the defective product. Neither the national nor the European regulations make any mention of the fault or negligence of the producer.

Secondly, this liability of the producer is for the products it manufactures or imports, which leads us to wonder whether, in the case of importation or distribution, there is any liability of the original producer or manufacturer, a question that we will try to answer in this article.

– What is a defective product? The law defines a product as any movable good, as well as gas and electricity. In turn, it considers a product to be defective if:

1. It does not offer the safety that could legitimately be expected, having regard in particular to its presentation, its foreseeable use and the time of putting into circulation.

2. It does not offer the safety normally offered by others of the same series. However, a product cannot be considered defective merely because a more sophisticated version of it is subsequently put into circulation.

– What is a producer? The producer is a broad concept that includes the manufacturer of the product, the importer in the territory of the European Union and any person who presents himself as such by indicating on the good itself his trademark or distinctive sign (what case law has called “apparent producer”).

– Who is liable for damages caused by a defective product? As we have said, the general rule is that the producer shall be liable for the damages. However, the LGDCU establishes a special rule in its art. 138.2:

“If the producer cannot be identified, the supplier of the product will be considered as such, unless, within a period of three months, he indicates to the damaged or injured party the identity of the producer or of the person who has supplied or provided him with the said product. The same rule shall apply in the case of an imported product, if the product does not indicate the name of the importer, even if the name of the manufacturer is indicated”.

In other words, the supplier is liable for damages when the producer cannot be identified, unless, within 3 months, he informs the injured party of the identity of said producer or supplier.

Case law on defective products. The STS 448/2020. Considerations of the CJEU

The Supreme Court’s decision in question refers to a case in which the plaintiff sued a well-known multinational medical and pharmaceutical company for damages suffered as a result of a defective prosthesis. The first instance judgment partially upheld the claim and ordered the company to pay a moderate amount, not as the manufacturer of the product but as its distributor, for not having provided the injured party with the identity of the manufacturer within the legal period of three months. In the second instance, the Provincial Court upheld the company, basing its decision on the fact that the plaintiff knew the identity of the manufacturer, and therefore had wrongly directed his action against the distributing company. The decision was appealed in cassation, which obliged the Supreme Court to examine the liability regime of producers and distributors of products. In this regard, the general rule is clear, and it is the producer’s liability in the different national rules of the Member States, given that the legislation is informed, as has been commented, by a 1985 Directive that establishes bases that must be respected by all national legislators.

In addition, the CJEU has established in repeated judgments that the liability of the manufacturer cannot and should not be placed on the same level as that of the distributor, although it recalls the assimilation between the producer and the importer in the European Union of a product manufactured in a third country. This rule allows the consumer to claim for damage caused by product defects directly against the importer, sparing him the considerable difficulties of having to go directly against the non-EU manufacturer (think of the difficulties for any individual consumer to sue a manufacturer of a product in China or Bangladesh, for example, under their domestic law).

However, what is not possible, in application of the rules and the interpretation of them by both the CJEU and the Supreme Court in our national context, is to equalize the responsibilities of producer and distributor, allowing the injured party to sue one or the other indistinctly, according to his convenience. In the case analyzed by the judgment, it was proven that the plaintiff had addressed his initial claim against the multinational company, which replied by burofax, within the legal period of three months, that said company was simply the distributor of the prosthesis, expressly identifying the producer.

The Supreme Court considers, therefore, that none of the circumstances that would legally justify the defendant company’s passive standing are present, despite the allegations made by the injured party in cassation. In this sense, it considers that:

– The position of the company as defendant cannot be justified by the fact that it is allegedly the importer of the product in the European Union, given that this title had not even been alleged until then by the plaintiff

– The jurisprudence invoked by the plaintiff is not applicable, since it refers to cases in which the identification of the producer is made by the distributor in the answer to the lawsuit (statement of defense) therefore after the expiration of the legal term of three months, which in this case was respected.

– It is not possible to affirm the liability of the distributing company even alleging that it and the producer belong to the same group of companies, since if they are distinguished and separate companies, with their own legal personality and that are not confused with each other, the fact of belonging to the same group or sharing partners does not prove by itself that there is a control or influence of one company on the other. This argument reinforces the rationale of the strictly subsidiary liability of the distributor with respect to the manufacturer, which is precisely that the

distributor has no real possibility of participating in the quality control of the product and, therefore, its liability for defects should only be subordinated.

Conclusion

Both Spanish law and European Union regulations establish a consumer protection regime for damages caused by a defective product. The consumer must direct his action against the producer, understood as the manufacturer of the product or its importer to the territory of the European Union. When the latter is unknown, he must contact the distributor, requesting to be informed of the identity of the producer. Only when the distributor fails to comply with this duty of information within the legal period of three months, it will be possible to direct the claim against this distributor. The Supreme Court has pointed out that in the event that it is proven that the injured party knew the identity of the producer, having been informed within the legal period, the action against the distributor must be dismissed.

From the Insurance Law Department of Belzuz Abogados, (Insuralex Exclusive Member in Spain and Portugal) we are at your disposal to analyze and defend your liability and insurance problem in the most professional and efficient way.

Tagged under: Belzuz Spain, Damages caused by defective products, Insuralex Spain, Insurance Lawyers Spain, Spanish regulation damages defective products

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