Product Liability 2009 - Arnold & Porter LLP

Lovells LLP The EU General Product Safety Regime
indication or information regarding the product.
The categories of consumers at risk when using the product,
in particular, children and the elderly.
(Article 2(b).)
The Directive imposes a number of obligations on producers and
distributors to reduce the risk of dangerous products being placed
on the EU market. In particular, producers must:
Place only safe products on the market (Article 3(1)).
Provide consumers with relevant information to enable them
to assess risks inherent in the product (Article 5(1),
paragraph 1).
Have systems to enable them to be informed of the risks that
a product might pose (Article 5(1), paragraph 3(a)).
Have systems to enable them to take appropriate action to
avoid risks (which might include being able to trace
marketed products) (Article 5(1), paragraphs 2 and 4(a)).
Keep distributors informed of any sample testing or other
monitoring activities (Article 5(1), paragraph 4(b)).
Where appropriate: carry out sample testing of marketed
products; keep a register of complaints; and adequately
investigate complaints (Article 5(1), paragraph 4(b)).
Notify the competent authorities immediately a marketed
product is known or should be known to pose unacceptable
risks (Article 5(3)).
Recall dangerous products in the appropriate circumstances.
If they fail to do so, producers can be ordered by the
authorities to recall products (Articles 5(1) and 8(1)(f)) (see
the section on “Product recalls” below).
Distributors are required to assist in compliance with the applicable
safety requirements by:
Keeping and making available whatever documents are
necessary for tracing the origin of products (Article 5(2)).
Passing on information on product risks (Article 5(2)).
Co-operating with the action taken by producers and the
competent authorities (Article 5(4)).
Notifying the competent authorities immediately a marketed
product is known or should be known to pose unacceptable
risks (Article 5(3)).
Definitions
A “producer” is defined as any of the following:
A manufacturer established in the EU or an own-brander
(that is, someone who places his name or trademark on the
product so as to present himself as a producer) (Article
2(e)(i)).
An EU representative of the manufacturer, if the
manufacturer is not established in the EU or, if none, the
importer of the product (Article 2(e)(ii)).
Other professionals in the supply chain, in so far as their
activities may affect a product’s safety (Article 2(e)(iii)).
A “distributor” is defined as any professional in the supply chain
whose activity does not affect the safety properties of a product
(Article 2(f)).
Scope
Under the previous regime, the obligation to put safe products on
the market related only to products intended for consumer use, or
likely to be used by consumers, including second-hand products
(with some exceptions).
The Directive extends to all products that are made available to
consumers, including ones that it is reasonably foreseeable may be
used by consumers even if not intended for them (such as products
that might be expected to “migrate” from the professional to the
consumer market, for example, laser pens). It also extends to
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products used by consumers in the course of a service being
provided to them (for example, sun beds used in sports clubs)
(Article 2(a)).
“Borderline” industries
The Directive does not extend to products that are subject to a
separate comprehensive product safety regime under EC law
(Article 1(2)). In practice, the only products beyond the scope of
the Directive are food and pharmaceuticals.
Several industries are subject to partial safety regulation, such as
those involved in the manufacture and supply of toys, cosmetics,
motor vehicles, electrical products, personal protective equipment,
construction equipment, machinery, and medical devices.
The Commission has published two guidance documents which,
between them, offer guidance on the relationship between the
Directive and the legislation affecting these products. This
guidance, while it is of some assistance, does not deal with a
number of the issues relevant to those industries, nor does it give
much guidance on how the Directive might operate in respect of
other regulated industries (“Guidance Document on the
Relationship Between the General Product Safety Directive (GPSD)
and Certain Sector Directives with Provisions on Product Safety”,
November 2003, http://ec.europa.eu/consumers/cons_safe/
prod_safe/gpsd/guidance_gpsd_en.pdf and “Guidance Document
on The Relationship Between the General Product Safety Directive
(GPSD) and Certain Sector Directives with Provisions on Product
Safety - Second Chapter”, November 2005, http://ec.europa.eu/
consumers/cons_safe/prod_safe/gpsd/gpsd_2ndchapiter_en.pdf).
Notification obligation
Under the Directive, producers and distributors must notify the
competent authorities “immediately” they know, or ought to know,
that a product they have marketed poses unacceptable risks (Article
5(3)). It is generally an offence not to comply with this requirement
(see the section on “Penalties” below).
Significantly, the Directive imposes the notification obligation on
distributors as well as on producers. This means that producers
could find themselves in a situation where the distributors of their
products notify the authorities of alleged defects in their products,
without necessarily first telling the producers. Similarly it has the
potential to create strain on commercial relationships in the event
the producer and distributor take different views on whether a
particular product safety issue should be notified.
The broader implications of the notification requirement will be
obvious to those who have experience with the regime under the
consumer product safety legislation in the US where there is a
similar, but not identical, obligation to notify the authorities if
producers discover that a product they have marketed presents
unacceptable risks. In fact, the notification obligation under the
Directive is more onerous than its US equivalent because:
The safety threshold for reporting product risks is likely to
be, in most cases, much lower.
The enforcement mechanisms will be decentralised and
inevitably subject to inconsistent application as between
various Member States.
There is less adequate protection of any confidential
information supplied by manufacturers (see the section on
“Information sharing” below).
National authorities
Under the Directive, national authorities are under an obligation to
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