Product Liability 2009 - Arnold & Porter LLP

Simpson Grierson New Zealand
In New Zealand manufacturers may, depending on the
circumstances, have a duty to warn consumers and possibly recall
products when they learn of risks - even after the products have
been sold and even though the product was not defective at the time
it was sold.
A claim for failure to recall might be brought by way of action for
damages, provided it was not of a type barred by the accident
compensation legislation. If breach of the Fair Trading Act were
alleged, either civil or criminal proceedings could be brought.
1.5 Do criminal sanctions apply to the supply of defective
products?
This is addressed in question 1.1 above, under the subheading “(e)
Criminal Liability”.
2 Causation
2.1 Who has the burden of proving fault/defect and damage?
Generally speaking the claimant in any particular case will have the
burden of proving the elements of the claim including matters of
fault and damage. In accordance with the usual rules, the claimant
in a civil action must prove the claim on the balance of probabilities
and the prosecution in a criminal action must prove the offence
beyond reasonable doubt.
2.2 What test is applied for proof of causation? Is it enough
for the claimant to show that the defendant wrongly
exposed the claimant to an increased risk of a type of
injury known to be associated with the product, even if it
cannot be proved by the claimant that the injury would
not have arisen without such exposure?
Usually a “but-for” test is applied, i.e. whether the claimant would
have suffered the particular loss without or “but-for” the
defendant’s wrongful actions. The test has also been expressed as
requiring the plaintiff to prove that it is more likely than not that the
product in question contributed materially to the development of the
relevant condition.
There are possible exceptions in various special cases. One such
exception concerns proof of an increased risk of the relevant type of
injury - following English decisions on the topic. However, in New
Zealand there is limited scope for such exceptions, and in a product
liability context the New Zealand High Court has held that the
exceptional approach of the House of Lords in the English medical
negligence case of Chester v Afshar [2005] 1 AC 134 does not
apply.
2.3 What is the legal position if it cannot be established which
of several possible producers manufactured the defective
product? Does any form of market-share liability apply?
Market-share liability is not a recognised doctrine in New Zealand.
Broadly speaking, the claimant will be required to establish the
claim against each particular defendant - rather than proving only
that the relevant goods were produced by one of a group of potential
manufacturers.
ICLG TO: PRODUCT LIABILITY 2009
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2.4 Does a failure to warn give rise to liability and, if so, in
what circumstances? What information, advice and
warnings are taken into account: only information provided
directly to the injured party, or also information supplied to
an intermediary in the chain of supply between the
manufacturer and consumer? Does it make any difference
to the answer if the product can only be obtained through
the intermediary who owes a separate obligation to assess
the suitability of the product for the particular consumer,
e.g. a surgeon using a temporary or permanent medical
device, a doctor prescribing a medicine or a pharmacist
recommending a medicine? Is there any principle of
“learned intermediary” under your law pursuant to which
the supply of information to the learned intermediary
discharges the duty owed by the manufacturer to the
ultimate consumer to make available appropriate product
information?
It has been recognised in New Zealand that a duty to warn will exist
in numerous different circumstances - traditionally where the
manufacturer has knowledge about a danger that the consumer
could not reasonably be expected to possess. The purpose of the
duty to warn is to address, or ameliorate, this imbalance (see Pou v
British American Tobacco, 3 May 2006). In relation to products
distributed to a mass market, the duty is to warn of the relevant risk
in a manner that could be expected to come to the attention of the
reasonable consumer. An adequate warning to a learned
intermediary, who can reasonably be expected to explain a risk,
should be sufficient to protect a manufacturer.
3 Defences and Estoppel
3.1 What defences, if any, are available?
A range of different defences are available depending on the type of
claim being made.
In negligence claims, contentious issues tend to include:
the existence, nature and extent of any duty of care;
whether any duty of care has been breached;
causation;
the nature and extent of damage;
whether damage is too remote; and
any contributory negligence.
Special defences available to a defendant include voluntary
assumption of risk (volenti), the Limitation Act time bar, and the
accident compensation legislation which bars most claims for
compensatory damages for personal injury. While they may not
strictly constitute defences, issues regarding the existence or
likelihood of intermediate examination of the goods and economic
loss may also assist a defendant.
In contract claims relevant issues will include:
the existence and terms of the contract;
whether the contract has been breached;
causation;
the nature and extent of damage; and
whether the damage is too remote.
Again the Limitation Act and the accident compensation legislation
may bar a particular claim.
Defences to the various grounds for liability by statute will of
course depend on the wording of the particular statutory provision
relied upon by the claimant. Broadly speaking the most important
special defences will again be the Limitation Act and the accident
compensation legislation.
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