Product Liability 2009 - Arnold & Porter LLP

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Lovells LLP The EU General Product Safety Regime
take positive steps to ensure adequate market surveillance of
consumer products (Article 9(1)). National governments need to
ensure that their enforcement authorities have sufficient resources
to enable them to fulfil this obligation.
National authorities are also specifically empowered to initiate
product recalls. Although a product recall is to be considered a last
resort, national authorities are required to take into account the
“precautionary principle” when assessing what action should be
taken (Article 8(2)).
National authorities must also give consumers and other interested
parties an opportunity to submit complaints, and these complaints
must be followed up as appropriate (Article 9(2)).
Information sharing
National authorities must share information about “serious risks”
with the Commission (Article 12). The Commission is empowered
to share that information with other Member States, through the EU
emergency system for the rapid exchange of information (RAPEX),
and even with their counterpart organisations in other countries.
The Commission and the Consumer Product Safety Commission in
the US have already agreed guidelines for sharing information
about specific product safety risks that are notified to either of them
and they now routinely share information with each other about
dangerous products and product recalls that come to their attention.
Also, due to the increased number of notifications being of products
that are of Chinese origin, in May 2006 it was agreed between the
Commission and Chinese government that RAPEX information
concerning Chinese products would be made available to the
Chinese government to enable it to take immediate follow-up steps.
The authorities can also make the information provided by producers
and distributors available to the public, other than where the
information is covered by “professional secrecy” and does not need
to be disclosed to protect consumers. The public will also have a
right to gain access to the information provided to the regulatory
authorities, particularly as it relates to product identification, the
nature of the risk and the measures taken (Article 16).
The Commission routinely publishes on its website information
about products posing serious risks that are notified to it by Member
States under the Directive (http://ec.europa.eu/consumers/
dyna/rapex/rapex_archives_en.cfm).
Penalties
The penalties for breach of the Directive vary under the implementing
legislation of the different Member States. For example, penalties in
the UK are fines of up to £20,000 and/or 12 months’ imprisonment for
the more serious offences, such as a breach of the general safety
requirement, and fines of up to £5,000 and/or three months’
imprisonment for other offences. In other countries, penalties can
include fines of up to €2 million, and forced businesses closure.
Commission Guidance On Notification
The notification obligation in particular presents difficult
challenges for producers and distributors when they are confronted
with an unexpected safety risk presented by products they have
marketed (see the section on “Notification obligation” above).
This is when the adequacy of systems put in place to ensure safety
will come to be scrutinised and when management will be faced
with the question of whether the legal obligation to notify
authorities, and possibly then take corrective action, has been
triggered (see the sections on “Risk management” and “Product
recalls” below).
In recognition of that, the Commission published guidelines
intended to give producers, distributors and national authorities
some guidance on how the notification obligation is to operate in
practice (“Guidelines for the notification of dangerous consumer
products to the competent authorities of the Member States by
producers and distributors in accordance with Article 5(3) of
Directive 2001/95/EC”, http://ec.europa.eu/consumers/cons_safe/
prod_safe/gpsd/notification_dang_en.pdf) (guidelines).
Immediate notification
The Directive does not indicate what “immediately” means in the
context of the notification obligation (see the section on
“Notification obligation” above). The guidelines offer some
assistance:
“The [Directive] requires that the competent authorities be
informed immediately. A company must therefore inform them
without delay, as soon as the relevant information has become
available, and in any case within 10 [calendar] days since it has
reportable information, even while investigations are continuing,
indicating the existence of a dangerous product. When there is a
serious risk companies are required to inform the authority(ies)
immediately and in no case later than three [calendar] days after
they have obtained notifiable information.
In an emergency situation, such as where immediate action is taken
by a company, the company should inform the authorities
immediately and by the fastest means.”
These time limits can be difficult to apply in practice, particularly if
information about the nature and extent of the risk is still emerging.
It will not always be clear whether the product poses risks that are
incompatible with the general safety requirement. This might be
the case, for example, where a company has received one isolated
report of a safety incident, or a potential risk is identified but there
is no more than a theoretical possibility of the risk materialising.
Risk assessment
To help identify risk in this context, the guidelines set out a
“methodological framework” for risk assessment. This framework
suggests an approach based on a systematic evaluation of the
following factors:
Severity of injury.
Overall probability of injury.
Type of person at risk (especially vulnerable people).
Adequacy of warnings/obviousness of hazard.
The guidelines include a risk assessment matrix incorporating the
results of the evaluation of the interaction of these factors, and
indicate on that basis whether notification is required.
The Commission has stressed that these guidelines will not
necessarily apply in all cases. In fact, they have, since their
introduction, been the subject of much criticism and have proven to
be unworkable in many situations. As a result, the Commission has
been consulting on a new and revised methodology, which is
expected to be published later this year and which will hopefully
offer producers and distributors a more practical approach for
analysing product risks.
The key lesson highlighted by the guidelines is that every potential
safety risk arising in respect of marketed products needs to be
considered carefully on its facts, with proper input from experts
experienced in both the technical aspects of the risk assessment and
the legal obligations under the new regime.
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