Product Liability 2009 - Arnold & Porter LLP

92
Chapter 13
Brazil
Barretto Ferreira, Kujawski, Brancher
e Gonçalves (BKBG)
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?
In the Private Law sphere, the Brazilian Consumer Protection Code
(“CDC”) provides for strict and objective liability (strict liability in
tort) for manufacturing defects and services defects. The CDC also
sets forth the joint liability of all suppliers in the supply chain for
damages caused to consumers. In the criminal sphere, our
legislation does not provide for any objective product liability.
Contractual limitation of liability is allowable only on a B2B type
of relationship.
1.2 Does the state operate any schemes of compensation for
particular products?
No it does not.
1.3 Who bears responsibility for the fault/defect? The
manufacturer, the importer, the distributor, the “retail”
supplier or all of these?
In Brazil, when individuals are harmed by an unsafe, defective or
dangerous product, they may have a cause of action against the
persons/entities who designed, manufactured, imported, distributed
or furnished that product, that is, against any company that stands
in that chain, that are jointly liable vis-à-vis consumers pursuant to
the CDC. Then, depending on the contractual terms, the supplier
that was considered liable may have a right of recovery against the
party of the supply chain that actually caused or was responsible for
the damage.
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?
Under Brazilian legislation, recall is a request to return to the
manufacturer a batch or an entire product production, usually due to
the disclosure of safety matters. The recall is an effort to limit
liability for corporate negligence (which can cause costly legal
penalties) and to improve or avoid publicity damage.
The general provisions set forth in the Brazilian Consumer
Ricardo Barretto Ferreira
Elizabeth Alves Fernandes
Protection Code concerning recall are complemented by more
specific provisions defined in the Decree n. 2,181/1997, which
creates the National System of Consumers’ Protection under the
competence of the Brazilian Ministry of Justice.
In this context, the Ordinance n. 789, enacted by the Brazilian
Ministry of Justice on August 24th 2001, regulates the recall
procedure in Brazil and, in general words, states the following
steps:
Firstly, the producer or dealer must notify the Department of
Consumers’ Protection and Defense (part of the Brazilian
Ministry of Justice) of the disclosure of safety risks or
defects in products which were introduced in the market as
well as of their intention for recall. In this notification, all
defects and risks must be described in details.
Then, consumer hotlines or other communication channels
must be established, since the producers and dealers shall
promptly inform the consumers about the disclosure of safety
risks or defects in products. In this phase the recalled
products must be specified by their serial numbers or batch
numbers.
Recall announcements are disclosed by the Brazilian
Ministry of Justice Website after the notification previously
described. Said notices must also be published in the
metropolitan daily newspapers and, in certain circumstances,
television news reports advising the recall must also be
carried out by producers and dealers.
Finally, producers and dealers must send to the Department
of Consumers’ Protection and Defense a full report about the
products recalled by them.
It is relevant to point out that in Brazil the recall does not prevent
the consumers’ right to be indemnified against any kind of damage
caused by unsafe, defective or dangerous products.
1.5 Do criminal sanctions apply to the supply of defective
products?
In the Criminal sphere, our legislation does not provide for any
objective product liability. It means that, in order for the criminal
liability to arise, a personal and subjective negligence must take
place.
The Brazilian Consumer Protection Code lists crimes against
consumer relations. The legally protected right is, therefore,
consumer relations, with respect to interests and expectations of
consumers, the most vulnerable party to the legal relationship.
The criminal acts described provide that the active and passive
subjects are respectively the supplier (the corporation operating in
the consumer market) and the consumer.
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