Product Liability 2009 - Arnold & Porter LLP

Chapter 24
Hungary
Oppenheim
1 Liability Systems
1.1 What systems of product liability are available (i.e. liability
in respect of damage to persons or property resulting from
the supply of products found to be defective or faulty)? Is
liability fault based, or strict, or both? Does contractual
liability play any role? Can liability be imposed for breach
of statutory obligations e.g. consumer fraud statutes?
All of the above types of liability (i.e. fault based, strict and
contractual) exist in the Hungarian legal regime. Act IV of 1959 on
the Civil Code (Hungarian Civil Code) governs fault based and
contractual liability and Act X of 1993 on Product Liability
(Product Liability Act) provides for strict liability.
Strict Liability
Pursuant to the Product Liability Act, Directive 85/374 EEC has
been implemented. The Product Liability Act expressly provides
that the producer shall be liable for the damage caused by the defect
of its product (Section 3).
Fault Based Liability
Product liability claims can also be enforced by relying on the noncontractual
liability provisions of the Hungarian Civil Code. It
should be noted that the Product Liability Act expressly authorises
the aggrieved party to enforce its claims by utilising the provisions
of the Civil Code on contractual and non-contractual liability.
Contractual Liability
As the case of fault based liability, provisions of the Hungarian
Civil Code concerning contractual liability can also be applied to
product liability claims. It amounts to the breach of contract when
a contractual relationship exists between the parties and one of them
delivers a dangerous or defective product, hence claims of warranty
can be made against the party in breach. There is a four-step system
in Hungarian law regarding warranty claims. First the aggrieved
party can ask for the repair of the product or its replacement. In
case repair or replacement is not possible or the party in breach did
not fulfil the claim, the aggrieved party can request a price
reduction or it can rescind (terminate with retroactive effect) the
contract.
It is important to emphasise that the provisions of the Hungarian
Civil Code apply as supplementary rules in questions not
determined by the Product Liability Act.
1.2 Does the state operate any schemes of compensation for
particular products?
There used to be a compensation system for damage caused by
ICLG TO: PRODUCT LIABILITY 2009
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Ivan Bartal
pharmaceutical products, which was terminated and liability for
damage caused by such products now falls within the scope of the
Product Liability Act. The State shall, however, compensate
damage caused by pharmaceutical products used in order to prevent
the spreading of pathogenicities, toxins, nuclear radiation and
chemical materials under the permission of the competent state
agency (Section 21 (4) of Act XCV of 2005).
1.3 Who bears responsibility for the fault/defect? The
manufacturer, the importer, the distributor, the “retail”
supplier or all of these?
According to the Product Liability Act, the producer (manufacturer)
is liable for the damage caused by the product. The Product
Liability Act defines the producer as:
the manufacturer of a finished product, the producer of any
raw material or the manufacturer of a component part; and/or
any person who, by putting his name, trademark or other
distinguishing feature on the product presents himself as its
producer.
In the case of imported products, the same obligations apply to the
importer. This does not affect the right of the importer to enforce
its claims against the producer. The Product Liability Act defines
the importer as:
a foreign trader; or
in case of a foreign trade consignment contract: the
consignor.
If the manufacturer of a product cannot be identified, all distributors
of such product are regarded as manufacturers until such
distributors reveal to the injured party the name of the manufacturer
or the distributor from whom the product was obtained. The same
shall also apply to imported products where the manufacturer is
indicated but the importer cannot be identified.
The liability of the above mentioned persons is joint and several.
1.4 In what circumstances is there an obligation to recall
products, and in what way may a claim for failure to recall
be brought?
There is no general regulation on the duty to recall products.
However, special regulations may provide for an obligation to
maintain a product recall system (such as Section 22 paragraph (1)
b) of Act XLVI of 2008 on Chains of Food Product Traders) but
there has not been any general product recall regulation
implemented yet. Normally, if the recall of a product is required,
the competent authority will issue a resolution to this effect.
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