The Product Regulation and Liability Review: Editors' Preface
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. However, 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 2020. Needless to say, the past year was unlike any other for product manufacturers, with virtually every industry across the globe materially impacted by the covid-19 pandemic. However, while many manufacturers were forced to temporarily (or permanently) halt production, others mobilised as never before to combat this public health emergency. Pharmaceutical companies developed life-saving vaccines and treatments at an unprecedented pace. Automakers converted their production lines and began manufacturing critical care ventilators for worldwide distribution. Suppliers of personal protective equipment worked overtime to meet the demands of healthcare providers and the general public. In many instances, governments worked in tandem with the private sector to facilitate vital public health measures. Regulatory agencies responded to the crisis by expediting and streamlining clinical trials. In the United States, the Secretary of Health and Human Services invoked the Public Readiness and Emergency Preparedness Act (the PREP Act) to immunise companies from tort liability stemming from the manufacture, testing, distribution and administration of products with the intention to curb the spread of the virus. In short, the challenges posed by covid-19 underscored that a well-functioning product liability regime is vital to a nation's safety, health and economic well-being.
Despite the severe disruptions caused by the pandemic, several jurisdictions also initiated important legislative and regulatory overhauls that will impact product manufacturers for years to come. The United Kingdom officially left the European Union on 31 January 2020, meaning that it is no longer subject to new EU product regulations and will be free to adopt its own product safety standards and liability rules going forward. While it remains to be seen whether the UK's product liability laws will remain largely harmonised with those of its EU counterparts, this volume discusses a few post-Brexit developments that have already occurred. Across the Atlantic, Puerto Rico enacted a new Civil Code for the first time in 90 years, codifying many of the doctrinal developments that had emerged from product liability case law in the preceding decades. Meanwhile, other jurisdictions sought to broaden protections for consumers and, by extension, widen the ambit of potential liability for product manufacturers. For example, the Competition and Consumer Commission of Singapore attempted to crack down on unfair trade practices affecting product sales and promotions, proposing non-binding guidelines designed to foster pricing transparency. Furthermore, Switzerland dramatically expanded the statute of limitations for tort-based product liability claims – a move influenced in part by fallout from the country's asbestos docket.
Other significant product liability developments in 2020 occurred in courtrooms (virtual ones, at least), rather than legislative bodies. Many courts grappled with novel questions concerning the types of commercial actors in a supply chain that can be held liable for product defects. In the United States, for instance, courts drew different conclusions concerning whether online retailers like Amazon can be strictly liable for website transactions involving allegedly defective products manufactured by third parties. These cases frequently called upon the court to determine whether the online retailer is a 'seller' of the product or a mere facilitator (akin to an auctioneer). As though the meaning of a 'seller' were not abstract enough, the Austrian Supreme Court dealt with an equally thorny issue last year: what constitutes a 'product'? That case pivoted on whether allegedly misleading newspapers can be deemed a 'product' – and, thus, subject to the nation's Product Liability Act – even though the 'physical' form of the product (i.e., printed paper) is not itself defective. The plaintiff alleged that she sustained personal injuries after reading inaccurate health advice from an herbalist author (who recommended the treatment of rheumatic pains by applying coarsely grated horseradish). The case has been referred to the European Court of Justice to determine whether intellectual 'products' can give rise to product liability, or whether only tangible products are subject to the Act. In Japan, meanwhile, the Supreme Court may soon issue key rulings in the nation's long-running asbestos litigation concerning presumptions of causation in joint tortfeasor cases: specifically, under what circumstances can a court find causation when it cannot readily ascertain which manufacturer inflicted the alleged injuries? 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 14 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 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 Franklin Sacha, who has been invaluable in assisting us in our editorial duties.
Chilton Davis Varner and Madison Kitchens
King & Spalding