In today's global economy, product manufacturers and distributors face a dizzying array of overlapping and sometimes contradictory laws and regulations around the world. A basic familiarity with international product liability is essential to doing business in this environment. An understanding of the international framework will provide thoughtful manufacturers and distributors with a strategic advantage in this increasingly competitive area. This treatise sets out a general overview of product liability in key jurisdictions around the world, giving manufacturers a place to start in assessing their potential liability and exposure.
Readers of this publication will see that each country's product liability laws reflect a delicate balance between protecting consumers and encouraging risk-taking and innovation. This balance is constantly shifting through new legislation, regulations, treaties, administrative oversight and court decisions. But the overall trajectory seems clear: as global wealth, technological innovation and consumer knowledge continue to increase, so will the cost of product liability actions.
This edition reflects a few of these trends from 2019. Notably, several jurisdictions proposed or enacted landmark legislation to strengthen rules governing long-existing industries or, in some cases, emerging technologies (such as autonomous vehicles, artificial intelligence, robotics and the Internet of things). In 2019, for example, China amended its Pharmaceutical Administration Law and thereby established a product traceability system to ensure drug quality. The revised law also provides an array of enhanced criminal penalties and civil liabilities, including novel remedies such as punitive damages. Additionally, countries like Singapore, India and Switzerland implemented expansive new measures – whether by judicial decision or legislative decree – to improve regulatory oversight over food safety. Several jurisdictions also experienced a proliferation of product liability class actions, including countries that only recently began experimenting with class adjudication. In July, Russia ushered in class action suits at a time when product liability and consumer protection cases have surged in the wake of amendments to Russia's Consumer Protection Law. This has led to the coinage of a new term in Russia – 'consumer extremism' – to describe frivolous suits designed to extract a quick settlement from sellers and manufacturers. Yet, other legal refinements impacting product manufacturers have not arrived as quickly as planned. In October, the European Commission delayed the widely anticipated launch of the European Database on Medical Devices (EUDAMED), an initiative designed to strengthen market surveillance and transparency for medical devices. While EUDAMED is not slated to take effect until May 2022, the deadline for medical device companies to recertify their products under the EU's new Medical Device Regulation remains May 2020.
Other significant legal developments in 2019 were spawned in courtrooms rather than legislative bodies. For instance, the US Supreme Court decided a pivotal pre-emption case that clarified what evidence a drug manufacturer must adduce to demonstrate that the Food and Drug Administration would not have approved the plaintiffs' proposed warning. The Supreme Court also held that the determination of whether a manufacturer met this evidentiary burden constituted a question of law to be resolved by the judge, not a jury. Although the Court's ruling provides valuable guidance to manufacturers seeking to limit their exposure to failure-to-warn claims arising under state law, it also left many questions unanswered (and, thus, open to lower court interpretation in the years to come). Moreover, courts in various jurisdictions grappled with issues concerning the types of entities within the supply chain that should be held liable for alleged product defects. For instance, the Supreme Court of Spain confronted the question of when a mere supplier can be considered the 'producer' of a product for purposes of strict liability. And courts in various jurisdictions are divided on whether online retailers that sell products supplied by third-party vendors can be deemed liable for product defects even though the online retailer never took possession or title of the vendor's product. Although these changes and trends may be valuable in their own right, they also create a need for greater vigilance on the part of manufacturers, distributors and retailers to ensure compliance with increasingly complicated and evolving product liability regimes.
This edition covers 15 countries and territories, and includes a high-level overview of each jurisdiction's product liability framework, recent changes and developments, and a look forward at expected trends. Each chapter contains a brief introduction to the country's product liability framework, followed by four main sections: regulatory oversight (describing the country's regulatory authorities or administrative bodies that oversee some aspect of product liability); causes of action (identifying the specific causes of action under which manufacturers, distributors or sellers of a product may be held liable for injury caused by that product); litigation (providing a broad overview of all aspects of litigation in a given country, including the forum, burden of proof, potential defences to liability, personal jurisdiction, discovery, whether mass tort actions or class actions are available and what damages may be expected); and the year in review (describing recent, current and pending developments affecting various aspects of product liability, such as regulatory or policy changes, significant cases or settlements and any notable trends).
Whether the reader is a company executive or a private practitioner, we hope that this edition will prove useful in navigating the complex world of product liability and alerting you to important developments that may affect your business.
We wish to thank all of the contributors who have been so generous with their time and expertise. They have made this publication possible. We also wish to thank our colleague Luke Bosso, who has been invaluable in assisting us in our editorial duties.
Chilton Davis Varner and Madison Kitchens
King & Spalding