I INTRODUCTION TO THE PRODUCT LIABILITY FRAMEWORK
Product Liability issues arising from the sale of products is regulated by the provisions of Articles 534–558 of the Civil Code (on sale contracts) as amended by Law 3043/2002, which was introduced for the harmonisation of the national legislation to Directive 44/1999/EC for consumer products, as amended by Directive 2011/83/EC. Further, Law 2251/1994, as amended by Law 3587/2007,2 which is a lex specialis ‘for the protection of consumers’ regulates in more detail in its Article 6 the issue of the manufacturers’ responsibility for defective products.
The Civil Code provisions are more strictly related to issues arising out of the sale of defective products, while Law 2251/1994 extends also to liability arising, inter alia, from abusive contractual terms, after-sale service, issues related to health and safety of consumers, responsibility of the provider of services, etc. In both cases (i.e., pursuant to both the provisions of the Civil Code and the provisions of Law 2251/1994), liability is strict.
Contractual liability does play a role in the sense that, in addition to any liability arising out of the provisions of the law, the buyer or the consumer who purchased a defective product under a contract has also the possibility to file a complaint for breach of contract.
In general, however, both the provisions of the Civil Code, as well as the provisions of Law 2251/1994, provide adequate protection to lawful interests such as one’s life, health and property.
Liability for breach of the above statutory obligations can be imposed in the way described, below. Criminal sanctions, however, can only be imposed in case of fraud, for example, where the seller knew about the defect of the product and concealed it from the buyer.
II REGULATORY OVERSIGHT
The obligation to recall products is a general obligation provided by Article 540, paragraph l(i) of the Civil Code, as amended. More particularly, this Article provides that in case of liability of the seller for a real defect in the product sold or if the product is not fit for the purpose or not fit by description, and in general when the product does not comply with the pre-agreed terms or the objective of the sale and purchase agreement between seller and buyer, the buyer has the right to request from the seller the recall of the product and either the repair of its defect or replacement with a new one.
The main condition for the above Article to apply is for the defect to exist at the time of the sale, namely at the moment when the ownership over the product passed from the seller to the buyer.3 In case the seller refuses to recall the product (or repair or replace it, as the case may be), the buyer has the right to have recourse to justice requesting from the court to order the seller to recall the product and to repair or replace it with a new one. According to the general provisions on tort of the Civil Code4 an obligation is established for the producer to follow up and recall, if necessary, his or her product after it has been launched in the market. In case of failure to do so, then the producer is held liable as per the aforementioned provisions on tort.
Furthermore, Article 7, paragraph 5 of Law 2251/1994 (as amended) provides that producers, when disposing their products, shall comply with the rules imposed by European and Greek law, the standards imposed for the safety and health of consumers, the European Commission Recommendations and the codes of proper use and ethics regarding the safety of products. The said standards, applicable in Greece, per category of product, regarding the safety of the products, are defined by the Minister of Development (or through the common decision of the above Minister and any other competent Minister). Through a similar decision, the inspection procedures, sampling procedures, laboratory tests on the products are also defined, and any special issue and any relevant detail is ruled. Moreover, Article 7, paragraph 6 of Law 2251/1994 provides that products, which even if used within the ordinary and foreseen circumstances, may nonetheless entail serious and direct risks to the safety and health of consumers, should be recalled by the producer or may be preventively confiscated by the authorities. The procedure and the terms and conditions of the said recall shall be decreed through a decision of the above Minister (or through the common decision of the above Minister and any other competent Minister).
III CAUSES OF ACTION
The claimant must be able to establish a causal link between the damage he or she suffered and the defect in the product. It is not sufficient to prove that the product was defective and that he or she suffered damage or injury. The claimant also has the burden of proving that the defect in the product caused the specific injury or damage sustained.
If the claimant is only able to prove exposure to an increased risk of a type or injury known to be associated with the product, the seller or the producer, or both, may be released from any liability if it can produce evidence that the product was within accepted specifications when sold or launched in the market. However, if the claimant cannot establish a causal link between the defect and the damage or injury then the seller and producer cannot be held liable.
i The contribution of failure to provide warnings to product liability
Failure to warn the public about the defects of a product does not in itself give rise to liability. The main element in any product liability case brought before Greek justice is the existence or not of a loss or damage suffered and the causal link between the defect in the product and the damage incurred. However, the failure to warn may give rise to liability if the plaintiff can satisfactorily establish that had the defendant warned the public in time about the defect, the loss or damage would not have occurred. Further, failure to warn for defects that were known or became apparent to the defendant may be an aggravating element to be taken into consideration in the amount of damages awarded by the courts.
All kinds of information will be taken into account. For instance, if the manufacturer or producer of a product becomes aware of a defect in his product, he or she can either directly inform the ultimate consumers, or in case there is an intermediary in the supply chain between him and the consumer he or she can ask the intermediary to inform the public about it. A classic example is the one of car manufactures and local representatives. When a foreign car manufacturer becomes aware of a defect in the gearboxes of a specific model, it will inform its local representative (which may be a subsidiary or an independent entity), who will be charged to inform its clients about the withdrawal of the defective gearbox usually through both the issuance of a press release and through letters addressed to its clients directly. In the event, however, of damage suffered owing to the defective gearbox, the consumer has the possibility to file suit both against the manufacturer of the car as well as against the local representative or against whichever he or she chooses.
In relation to who is responsible if the product can only be obtained through the intermediary that owes a separate obligation to assess the suitability of the product for the particular consumer, then the issue is not one of ‘a defective product’ but rather of ‘the wrong product’. In that case, the manufacturer (for example, a pharmaceutical company) has no liability towards the consumer (patient) because the choice of medical device used in a surgery or medicine prescribed belongs to the surgeon or doctor who can be sued for malpractice.
There is no principle of ‘learned intermediary’ under the Greek legal system in the sense that the manufacturer is completely discharged of any and all liability towards the consumer if the product was defective and the defect caused the damage.
Pursuant to the Greek civil procedural system, all trials are heard only by judges. A trial by jury in Greece will only be found in the criminal courts and only in serious cases (felonies).
ii Burden of proof
The claimant (i.e. the consumer) has the onus of proving that there is a defect in the product and that the defect is the cause of the injury or damage he or she has suffered.
The burden of proof rests on the victim (i.e. the consumer) to prove:
- a that there was a defect in the product;
- b that such defect resulted in the damage (caused by regular or normal use of the product); and
- c the causal link between the defect and the damage.
On the other hand, the manufacturer will be exempt from liability if it can prove that:
- a it did not circulate the product in the market;
- b the defect did not exist at the time that the product was circulated (i.e., at the time that it left the production facility);
- c it did not manufacture the product with the intention of distributing it and did not distribute the product as part of its business activity;
- d the defect was because of the fact that the product was manufactured in accordance with mandatory legal requirements; or
- e at the time when the product was circulated in the market, the existing scientific and technical standards did not allow for the manufacturer to diagnose the defect in the product.
According to the provisions of the Civil Code on Sale of Products, the seller, besides the general defence of the claim, has the following particular defences: (1) to invite the buyer to proceed with the replacement of the product or to rescind from the contract within a reasonable period of time. If such time lapses inactive, the exercise of the respective right or rights of the buyer is time-barred (Article 546 of the Civil Code); and (2) in case of consecutive sales, and, therefore, liability of the end seller towards the buyer, the end seller has subrogate rights against the previous seller. As far as the defence of the producer against the consumer is concerned, same is analysed in the following paragraphs.
In any case, the liability of the producer or buyer (and its respective defence against the claimant) may be limited or eliminated in the event:
- a of parallel liability with others; and
- b of concurrent fault of the buyer or consumer (see Article 300 of the Civil Code).
In this latter case, the liability may be totally exhausted in case of an exclusive fault of the buyer or consumer (i.e., in case of use of the product against the instructions for use, etc.).
Finally, it is notable that the state does not operate any schemes of compensation for particular products. If a claimant considers that the state is responsible for damages incurred owing to a particular defective product then, in order to be compensated, he or she will have to take action against the state before the administrative courts.
Scientific and technical knowledge at the time of supply
The issue of defectiveness of products that fall within the category of ‘state of the art products’ or within the category of ‘highly technologically advanced products’ depends significantly on the scientific and technical knowledge available to the producer at the time of production of the specific product. The producer may be released if it produces sufficient evidence that at the time of placing its product in the market there was an objective lack, on the basis of the then existing standards of science and technology, of knowledge allowing it to diagnose the a posteriori defectiveness of the product. In this respect, there is an obligation on the producer to strictly follow up the development of science and technology in its particular field of production and to adopt any developments accordingly. For the ignorance of a potential defect to be justified it is not sufficient for the producer to refer to its own capabilities. What matters is the international standard of scientific and technical knowledge existing at that particular point in time and in that particular field of production.
The burden of proof always lies with the consumer to prove the existence of a defect. However, in the case of technologically advanced products it is for the producer to prove the level of scientific and technical knowledge available at the time in its particular field of production.
Development, manufacture, licensing, marketing and supply requirements
Article 6 paragraphs 8 and 9 of Law 2251/1994 provide the defences pursuant to which the producer of a defective product may be acquitted of its liability towards the consumer. More particularly, Article 6, paragraph 8(d) states that the producer is exempted of its liability if it can prove that the defect is because of the fact that the product was produced in accordance with the rules of ius cogens instituted by any public authority or pursuant to Article 6, paragraph 8(d) the producer is exempted of its liability if it can prove that when the product was placed into circulation the level of scientific and technical knowledge did not allow it to diagnose the existence of the defect.
Further, paragraph 9 of the same Article provides that the producer of a component of a product is not liable if it can prove that the defect is owing to the design of the product to which the component was embodied or to the guidelines provided by the producer of the product, in which case the producer is considered to be the producer of the product in which the component was embodied.
All claims must be filed within the applicable time limits imposed by the statute of limitations. The general principle is that all claims based on commercial disputes are statute-barred after the lapse of five years as of the date the claim was born. However, claims based on the sale of goods provisions for defective products are statute-barred after the lapse of two years for moveable property, and after the lapse of five years for immoveable property, from the day of delivery of the product to the buyer, irrespective of whether the buyer discovered the defect immediately or some time later.
The same statute of limitations (five years) is also applicable for any claim based on tort (direct or indirect damages and moral damages) commencing as of the date the party that incurred the damage realised the existence of the damage and could also identify the liable party; in no case shall this time limit exceed 20 years as of the date the damage occurred. However, if the tort constitutes at the same time a criminal offence that provides for a longer statute of limitations then this later time limit shall prevail.
For claims by consumers against producers for damages provoked by defective products under Law 2251/1994, the statute of limitations is three years as of the date the party that incurred the damage realised or ought to have realised the following three things: (1) the existence of the damage; (2) the defect of the product; and (3) the identity of the producer.
The age and the condition of the claimant do not affect the calculation of any time limits. They do not vary depending on whether liability is fault-based or strict, and the court does not have the possibility to disapply the time limits.
iv Personal jurisdiction
According to the general provision of Article 22 of the Civil Procedural Code, one person can be subjected to the jurisdiction of the court where he resides, or, in case the one to be sued is a company, then, according to the provision of Article 25, paragraph 2 of the Civil Procedural Code, that company can be subjected to the jurisdiction of the court where the company has its registered seat. In case of tort, the courts that have the jurisdiction are those where the event occurred or will occur.5 However, the parties have the right to agree in writing to subject their disputes to the jurisdiction of certain courts, and such agreement is binding for the contracting parties, according to the provisions of Article 42 of the Civil Procedural Code.
v Expert witnesses
The court has the right to appoint experts pursuant to the procedure outlined in Articles 368 to 392 of the Civil Procedural Code.
When the court appoints an expert, the only restriction on the nature and the extent of the evidence it seeks is that it determines specific questions that the expert must answer in his or her respective report and for which he or she is appointed to provide his or her special knowledge and skills. Further, the court will impose on the expert a deadline by which he or she must prepare and submit the report to the court. Nonetheless, judges evaluate all kinds of evidence (even evidence presented by an expert) freely. This means that they are not bound to follow the conclusions of the expertise, although, certainly in practice an expert’s opinion has a special weight.
After his or her appointment by the court, the expert takes an oath that he or she will prepare his or her expert opinion report with due diligence. The defeated party pays the expert’s fee. In case of the appointment of an expert, the litigant parties are entitled to appoint their technical advisers who cooperate with the expert.
Irrespective of whether the court has appointed any expert, the litigants are also free to either submit expert opinions prepared by experts of their own choice (as exhibits to their briefs), or to invite experts to execute affidavits or to testify in court and be cross-examined as witnesses on the date of hearing. In this respect, there are no restrictions on the nature and the extent of the evidence presented to the court.
As per the procedure before the courts, in cases where the court has appointed an expert to prepare and file an expert report, the report must be filed with the secretariat of the court within the time limit imposed by the court and pursuant to Article 389 of the Civil Procedural Code. The hearing can take place only after the expiration of five days from the filling of the expert report with the court secretariat.
According to Law 4335/2015 (which amended the Code of Civil Procedure), the parties have the right to obtain (before either the magistrate judge or a notary public, or the Greek Consulate abroad) and submit to the court up to five affidavits when supporting their lawsuit and three when rebutting the opponents’ lawsuit. The execution of the affidavit must take place prior to the submission of briefs and after proper convocation of the opponent to attend its execution. The opponent does not have the right to cross-examine the witness. However, he or she has the right to attend the execution of the affidavit only in order to obtain a copy thereof and comment upon the deposition of the witness in the briefs.
Submission of evidence with the court
According to said law, in cases tried before the court of first instance under ordinary procedure (either single-member or multi-member), the parties are obliged to file with the court secretariat their briefs and all documentary evidence (exhibits, affidavits, private expert opinions, etc.) within 100 days of filing of the lawsuit (and within 130 days of filing of the lawsuit when one or both litigant parties has its registered seat abroad). Within 15 days, thereafter, the parties shall file an addendum counter-arguing the allegations of the opponent. After that day, the court secretariat delivers the files to the reporting judge for his or her preparation of the trial, then the hearing date it is set and no more fillings are permitted until the date of hearing. After the hearing and in case the judge considers that it is necessary to cross-examine witnesses, he or she issues a respective court order, and the parties must prepare the witness for the ordered cross-examination.
According to the provisions of the Civil Code on sales, the liability is with the seller and with the servants, agents etc., of the seller only. In this case, the claimant shall always be the purchaser of the goods in question.
However, under the special legislation on the protection of consumers6 the producer of the defective product is held liable for damage incurred to the consumer. Under certain circumstances (i.e., in case the producer is not known to the consumer, etc.) the same liability is extended also to the ‘importer’ and to the ‘supplier’ of the defective product, which both are equated, by the law, to producer (quasi-producers). According to the existing case law, ‘importer’ is anyone who imports goods from third (non-EU) countries.
Furthermore, according to Article 926 of the Civil Code in case the damage is owing to a joint action of several parties or in case there is a parallel liability on more than one party (principal, servant, etc.) for the same damage, then all the parties involved are liable in toto. The same principle applies also where several parties acted simultaneously or one after the other and the determination of who out of them is responsible for the damage provoked is impossible.
Following the above, if more than one producer manufactured a defective product, the claimant (buyer or consumer) may file a claim against all people involved.
Any manufacturer that ultimately pays to the claimant the amount awarded by the court has the right to take, in turn, action against the other co-defendants and request that they participate to the amount awarded to the claimant. The share of each one of them to the damages awarded shall be fixed by the court on the basis of the decree of each one’s fault or, alternatively, it shall be shared proportionately among them.
viii Mass tort actions
Article 10 of Law 2251/1994 introduced for the first time in Greece the institution of ‘consumer associations actions’ for the protection of the general interests and welfare of consumers. Consumer associations may act either independently or jointly provided that the total number of their registered active members exceeds the minimum number of 500 members.
In practice, such claims are not very common, and most of the time they are directed against banking institutions for the protection of consumers against unfair contractual terms.
Also, Law 2251/1994 recognises the existence of consumer associations and regulates the way in which they can file claims against producers on behalf of consumers. A consumer association may file a claim or participate in a claim on behalf of any one of its members. Consumer associations with more than 500 registered active members can bring claims for the protection of the interests and of the general welfare of consumers.
Pursuant to Article 540 of the Civil Code, the buyer has the right to take action against the seller of the defective product and request either the repair or the exchange of the product with a non-defective identical product, or the decrease of its value or even the retreat from the sale. Further, under the ordinary provisions of tort, the claimant can claim compensation for actual damage incurred (i.e., expenses incurred, damage to property) or for loss of profits under the condition that he or she can establish a causal link between the damage incurred and the defective product. These are strictly pecuniary damages that can be assessed.
Damages and compensation for bodily injury or mental damage suffered cannot be assessed in real money and, therefore, will fall under the broader category of ‘compensation for moral damages’. In this case, again, the claimant will have to be able to prove the existence of a causal link between the moral damage suffered (i.e., owing to the bodily or mental injury suffered) and the defective product.
The main difference, however, between actual damages and moral damages is that the claimant does not have to assess and be able to prove the amount of moral damage suffered. Hence, there are no restrictions in claiming compensation for moral damages, and claimants can freely estimate the amount of compensation they believe appropriate. Of course, the court in deciding whether or not to award moral damages and to what extent will take into consideration not only the particular facts of the case but also the financial situation and wealth of both the claimant and the defendant, and will award the amount it deems fair and appropriate given the circumstances of each particular case. Therefore, usually the amount of moral damages awarded by the court is lower than the amount sought by the claimant. In no case, however, can the court award a larger amount of moral damages than those claimed by the claimant.
Damage to the product itself cannot be claimed under the provisions of the Law 2251/1994, but can only be claimed under the provisions of the Law on Contracts or Tort.
Moreover, as far as damage has been incurred and can be assessed and proved by the claimant, then damages can also be recovered. Hence, under the provisions of Greek law, it is impossible for someone to claim compensation for future and not-yet-incurred damage. For instance, if a person had to undergo medical treatment or medical tests, examinations and monitoring owing to the administration of a defective drug, which caused bodily damage, he or she would be entitled to claim compensation from the producer and the distributor of the drug and recover the damages incurred only if he or she was in a position to prove that the product was defective and that the defect caused the damage.
Namely, the claimant can only claim for damage incurred. However, it is impossible to claim compensation for any kind of expenses incurred where the product is not defective or did not malfunction or its defect did not cause the injury or any other kind of damage (pecuniary or other). In short, therefore, a claimant can claim compensation for costs incurred owing to a defective or malfunctioning product only if he or she is in a position to establish the causal link between the damage incurred and the defect of the product.
Finally, it is notable that the Greek courts do not award punitive damages in the sense that the term has gained in certain jurisdictions and especially in the United States. However, in the Greek jurisdiction and as explained above, it is common practice for claimants to claim (and, in successful claims, for the courts to award) moral damages.
V YEAR IN REVIEW
The recent developments affecting product regulation and liability are mentioned in Section I, supra. We indicatively refer below to a specific judgment issued by Greek courts regarding the issue under review. That judgment refers to court rules on the conditions to release a producer from liability (common cases brought before the Greek courts).
In this case, heard by the Athens First Instance Court, the plaintiff had purchased a yoghurt from a supermarket. She said she had taken the yoghurt from a fridge in the supermarket and after purchasing it, placed the yoghurt in her own fridge. Later that day she sat down to eat the yoghurt in front of the television with the lights switched off. After the first spoonfuls, the consumer felt that the yoghurt had a strange taste, so she stopped eating it after having consumed a considerable quantity thereof. She switched on the lights and saw that the yoghurt had mould on its surface. Shortly afterwards, the consumer experienced acute abdominal pain and vomiting. The consumer called a doctor, who diagnosed acute gastroenteritis and recommended bed rest and the relevant treatment. The consumer filed a lawsuit against both the producer of the yoghurt and the supermarket, seeking compensation, claiming that they were jointly liable. According to the consumer’s allegations, the most plausible reason for the yoghurt being rendered defective was a fault on the part of the producer when producing, storing and/or transferring the product, without excluding any storage fault on the part of the supermarket after the product had entered its sphere of influence and risk. The producer argued that: (1) its production was automatic and took place on a large scale, in conformity with EU and national regulations, and that the defect, if any, had appeared after the product left its production facility; and (2) the same defect had been found in no other product of the same or any other batch of yoghurt. The court ruled that the defectiveness of the yoghurt was not because of fault of the producer. Thus, it accepted the tortious liability of the supermarket owing to a failure in maintenance of the yoghurt. The court ruled that:
the limited time between the purchase of the product by the plaintiff and partial consumption thereof on the same day does not justify the development of mould (to the extent that it was manifested in the product) to be attributed to her own fault. In other words, the mould of the product is disproportionately minor if it is attributed to fault of the first defendant (producer) and rather great if it is attributed to fault of the plaintiff herself. So, the cause of defectiveness of the yoghurt bought by the plaintiff from the second defendant (supermarket) is necessarily the existence of fault of the latter during maintenance of the product in its store. Such fault is not excluded by the fact that the second defendant generally takes appropriate measures for maintenance of the products and particularly it places dairy products in fridges at a stable temperature of 2 degrees Celsius and regularly checks the good operation of its fridges, because it is always possible that single faults may happen.
Therefore, having rejected all other possibilities, the court ruled that it was possible that the supermarket’s cooling conditions were inappropriate, and that it could not be excluded that the yoghurt in question, while being stored by the supermarket, had sustained damage to its packaging. Consumers often move products from their initial shelf, and, during such movement, it is possible that damage could occur to the packaging, or the product could be placed outside the fridge or in another place where it is not cooled.
In order to reach its conclusion on the issue of liability, the court applied the theory of spheres of influence or risk source. On the basis of the extent of defectiveness, the product at issue no longer fell within the sphere of the producer and consequently no liability could be established. This consideration of the court was supported by the facts that:
- a the production method applied by the producer was automatic and large scale;
- b no other defective products of the same or another batch were reported; and
- c the supermarket admitted that the yoghurt had been supplied to it in perfect condition.
Therefore, the court released the producer from liability.
1 Anthony B Hadjioannou is a senior partner and Maria S Kanellopoulou is a junior associate at Kyriakides Georgopoulos Law Firm.
2 As further amended by Laws 3844/2010, 3853/2010, 3862/2010, 4177/2013, 4242/2014 and 4314/2014.
3 Article 537, paragraph l of the Civil Code.
4 See Article 914 et seq.
5 According to the provision of Article 35 of the Civil Procedural Code.
6 See Articles 3, 6 and 7 of Law 2251/1994.