Liability under Tort Law

Introduction:

From the historical period there was a plethora of laws for the consumer protection. The object and interest off almost all these enactments are mainly punitive, though some of them are also preventive in nature. However none of these laws provide any direct relief to the consumers.

In addition to the remedies under contract and criminal law, consumers have right under tort law. But, tort law is also not the ideal remedy for the injured consumers in different countries.

 From the time people organized themselves in society it was inevitable that conflict of interest will arise leading to internal friction. It was natural that in a society if a person suffers damage by a wrongful act of another person, mutuality required that he be compensated for the loss suffered by him. That was the starting point of the law of torts which is concerned with the allocation or prevention of losses which are bound to occur in our society. With the evolution of the right duty syndrome, invasion of rights increased with a corresponding duty not to injure someone else’s rights. The function of torts came to be recognized in allocating and redistributing losses. Now in welfare states tortuous liability has become a fundamental law for consumer protection.

People have been reluctant in pursuing remedies available to them under the law of torts. Reasons behind these have been poverty, illiteracy, unawareness prevailing amongst the people about the tort based remedies. The requirement for a litigant claiming compensation to pay a exorbitant amount of court fee according to the amount of claim, for bringing a suit, perhaps have been the most discouraging aspect. It has been estimated that in about half century, (1914-1965) only 613 tort cases came up to appellation courts. Subsequent survey in 10 years period, (1975-1984), revealed that out of the 56 tort cases reported by the Supreme Court and High Court only 22 involved product liability.        

It may also be worth mentioning that in the context that the damages recovered in such actions are no comparison to those awarded by the American Courts, where Lawyers encourage filling claims for high compensation, because they get a share in the damages awarded. Delay in getting relief from the courts has also impeded the tendency to move to the courts for seeking tort based remedies.

Consumer Protection Act is also one of these. The decision of the Supreme Court given in M.C. Mehta v. Union of India further establishes that establishes that the Indian Courts are now prepared even to move ahead to the English Courts in ensuring better welfare conditions to the people.

Though the provisions of the Consumer Protection Act provide ample remedies to consumers, yet very many situations are over under which the consumer will have to move under law of torts for the redress of their grievances. It can be aptly said that, Consumer Protection law is in the making and consumer is therefore having several laws and forums available to him to pursue his remedy and to base hi claim. Looking to the controversy prevailing in different countries, regarding the coverage of certain services under the four corner of Consumer Protection Act, it becomes obvious to have a discussion of the basis of the liability recognized under the law of torts in England and other British colonial countries. This will also help in making suggestions for codifying the remaining fields, not yet covered by the Consumer Protection Act, 1986.

 Grounds of Liability:

The classified analysis of the grounds of liability under the tort law was given by Pollock as under:

“Every tort is an act or omission which is related in one of the following ways to harm, suffered by a determinate person:

a.      It may be an act which without lawful justification or excuse, is intended by the agent to cause harm; and does cause the harm complained of.

b.      It may an act in itself contrary to the law, or an omission of specific legal duty, which cause harm not intended by the person so acing or omitting.

c.       It may be an act violating an absolute right and treated as wrongful without regard to the action’s intention or knowledge.

d.      It may be an act causing harm which the person so acting or omitting did not intend to cause, but might and should with due diligence have foreseen and prevented.

e.      It may in special cases , consist merely in not avoiding or preventing harm which the party was bound, absolutely or within limits to avoid prevent.  

Salmond’s view with regard to the province the functions of tort, also deserved to be discussed. He drew three conclusions in this regard. He firstly emphasized that the law of tort is not a static body of rules, but is capable of alteration to meet the need of changing society. The liability under this head is flexible which may be contracted according to the social needs. Secondly, it is not possible to find out a formula or criterion which will at once explain all the cases in which liability has been imposed in past and also furnish is guide for the decision of the doubtful cases in the future. Thirdly, it should be remembered that other factors besides the value of the plaintiff’s interests and the nature of the defendant’s conduct may be relevant. Such factors include (a) historical development (b) vengeance (c) deterrence (d) ability to bear the loss (e) economic social background of the case and now under the present movement for consumer protection, these factors are also coupled with the principle of strict liability of producer or provider of services.

Negligence as the basis of Liability:

The term negligence has thee connotations (a) careless state of mind (b) a careless conduct and (c) a tort in itself. For the careless state of mind the term negligence has again two connotations. In the first case it is a blameworthy inadvertence consequence of the conduct to the extent a reasonable man would have adverted to them. The second subjective use of negligence occurs in the cases where the defendant in fact decides to take the risk or ignores the consequences of his act. Thereby he may be guilty of willful or gross negligence or sometimes of recklessness. While in the first case the proof of being only negligent being ignorant of the fact, shall operate as defense but it should not be in the second case. Negligence as a tort is traditionally described as a damage caused by a breach of Pduty of care by the defendant to the plaintiff. Six ingredients for the liability under negligence which have come to be recognized are:

a.      A duty of care situation i.e. recognition by law that the careless infliction of the kind of in suit on the type of person to which the plaintiff belongs by the type of person to which the defendant belongs is actionable.

b.      Foresee ability that the defendants conduct would have inflicted on the plaintiff the kind of damage in suit.

c.       Proof that the defendant’s conduct was careless that in there has been breach of duty committed by him as he failed to fulfill the standard fixed by law.

d.      Casual connection between the defendant’s carelessness and damage.

e.      The extent of damage attributable to the defendant.

f.        The monetary estimate of the extent of damage.

Lord Atkin in Donoghue v. Stevenson Laid down the following rule,

       

      “Everyone must take reasonable care to avoid act or omission which he can reasonably foresee would be likely to injure his neighbor. Who then in law is a neighbor? The answer is that this word refers to persons who are so closely and directly affected by his act that he ought reasonably to have them in contemplation as being so affected when he is directly his mind to acts or omission which are called question.”

Product Liability:

Product Liability is the responsibility of manufacturer or vendor of goods to compensate for injury caused by defective merchandise that it has provided for sale. Product liability is “a manufacturer’s or seller’s tort liability for any damages or injuries suffered by a buyer, user or by stander as a result of a defective product. Product liability can be based on a theory of negligence, strict liability, or breach of warranty.

Three types of product Liability actions:

1.      The Lemon Product: The “Lemon Product” is the easiest to comprehend. It is a product that rolls of the assembly line different from the others. It does not comport with the design of the product. It has been manufactured or assembled badly. In essence, there was negligence in its production, though the plaintiff need not prove negligence. It is enough that it is different from others of identical design, and that difference caused the damage.

2.      Defective design: Some courts have rejected the application of section 402A of the American Law Institute’s Restatement of Torts in the areas of design defects, concluding that although it contemplates that the producer will be liable in the production of a defective product even where it has “exercised all possible care in the preparation and sale of his product”, nonetheless the “existence of a defective design depends upon the reasonableness of the manufacturer’s action, and depends upon the degree of care which he has exercised…….”. The consumer’s expectations test and the risk/utility test have dominated products liability analysis in design defect cases.

3.      Defective warning: A problem with warning may exist either because the warning was deficient in failing to appraise consumers of the product’s dangers, or because there was no warning given in a situation where there should have been. In determining whether a warning should have been given, courts focus on the defendant’s knowledge, actual or constructive, of the products dangerous propensities at the time it was produced or sold.

Thus, unlike other products liability cases which focus on the product, the failure-to-warn line of cases focuses on the conduct of the manufacturer. Nonetheless, though in negligence, the plaintiff must prove that the seller did not warn for the reasons that fall below an appropriate standard of care, in strict liability, the reasonableness of the defendant’s failure to warn is immaterial. Strict liability requires the plaintiff to prove only that the defendant failed to warn of a risk which was known or knowable in light of generally accepted scientific or medical knowledge existing at the time of manufacture and distribution.

Negligence:

Until well into the 20^th century, the contractual liability of the distributors to their immediate transferees for breach of warranty offered the only avenue of redress for those injured by defective products. There were many limitations to this remedy, the principle one being that it was only available against defendant in contractual privity with the plaintiff. Those limitations became the more frustrating with the transformation in the system of producing and marketing of goods. The developing mass market entailed an almost universal dependence on wholesalers and retailers for efficient distribution of products. The intervention of these intermediaries severed privity between manufacturer and consumer and thereby impaired the effectiveness of the warranty-based remedy. By availing itself of modern advertising methods, the manufacturer was able to produce the physiological effect of representation without incurring its penalties.

Yet until well within the 20^th century the law the law of turned a deaf ear to pleas for extending the responsibility of suppliers to persons other than their immediate transferees. The theoretical obstacle was another version of the privity rule which derived from Winterbottom v. Wright, enunciated in 1842. It was there held that one who had let a mail coach to the plaintiff’s employer with an undertaking to keep it in repair was not liable to the coachman who was injure by reason of a defective axle. Narrowly construed, the decision went no further than the axiom that A cannot find a claim against B for breach of contract between B and C, to which A is not a party; but it was interpreted in a wider sense that conduct which constitutes a breach of contractual obligation to C could not concurrently furnish a cause of action for breach of a tort duty to A. This fallacy supported the conclusion that the manufacturer of a defective article owed a duty to those alone who were in a contractual privity with him.

Proof:

The standard of responsibility demanded from manufacturers quickly assumed some characteristics of strict liability through the operation of the procedural device of the res ipsa loquitur. Less than four years after Donoghue v. Stevenson, the privy council rejected the contention that the maxim was incapable merely because the manufacturer relinquishes control on releasing the article upon the market and intermediaries handle it before it reaches the consumer. Control during the process of manufacture was sufficient, once the plaintiff has eliminated himself and other extraneous forces as likely causes of the injury. The maxim has been applied to toxic underwear, an exploding light bulb, a bone in a chicken sandwich, an exploding bottle of soft drink, fire in a television set, a malfunctioning water lift muffler, and mercury in a tub of ice-cream. The inference raised in these cases is two folded: it suggests either the manufacturer’s negligence in using an improper system of work or the carelessness of its employees in failure to carry out the system properly. The crucial point is that the plaintiff “is not required to lay his finger on the exact person in all the chain who was responsible, or to specify what he did wrong,” and, in order to exculpate itself, the defendant must produce evidence contradicting both hypotheses- in particular that his employees were not negligent- a daunting task.

Res ipsa loquitur imposes an evidentiary burden on the manufacturer but the plaintiff still continues to bear the burden of proof. Nevertheless, the ability to raise an inference of manufacturer negligence simply from thye fact that the product caused harm is of considerable assistance to the plaintiff’s case.

But all this is a far cry from assuring compensation for every accident caused by a defective product. In the first place, a manufacturer is also responsible for the condition in which it released the article and not for flaws subsequently introduced in the process of marketing and use. This truism, as valid for strict liability as for negligence, defeats any recourse to res ipsa loquitur unless the plaintiff is able to eliminate the likelihood of other responsible causes.

Law of delict:

The law of delict is applicable where no contractual relationship between the parties exists and the buyer suffers damage caused by the defective product. The law of contract only governs action by a buyer in a direct contractual relationship with the seller. In instances where no such contractual relationship exists, a buyer has to institute a claim in terms of the law of delict. There is therefore one important difference between the law of contract and delict and that is that the parties are in a position to regulate, limit or expand by arrangement among themselves, the consequences of any prospective breach.

Remedies: In South Africa the delictual remedy provided for by the Common Law when harm is caused by a defective product is the fault-based Actio Legis Aquilae. The court also regards product liability as being within the field of the Aquilian action.

Delictual liability requires proof of both wrongfulness and fault, together with proof of conduct, causation and harm. The buyer must establish that harm was caused wrongfully, and that the producer was negligent in causing the harm. In the context of product liability, fault essentially means negligence, since it would be highly unlikely in this context for a producer to intentionally cause harm to consumers. Under this system, as a general rule, he who claims has the burden to prove it, thus proving all five thesedelictual elements rest on the consumer. The elementsof the Aquilian action will be discussed in more detail below.

i)                    Conduct: In the context of manufacturer’s liability, the relevant judicial conduct is the voluntary control and supervision exerted over, and organization of the complex process of industrial production. In layman’s terms conduct means an act or omission. Conduct on the part of the manufacturer may therefore merely be a case of negligently causing harm to another, rather than failure to act.

ii)                   Causation: There must be causal link between the conduct of the manufacturer and the damage caused by its defective product. Whether such a causal link exists is a factual question to be answered and should be proved on a balance of probabilities. The mere existence of a defect is not sufficient, it must have a specific harmful result which must  have a causal connection to the defect.

iii)                 Harm and damages: The law of delict recognizes two categories of harm i.e. patrimonial damages and non-patrimonial damages. It is specially noted that non-patrimonial harm caused by a product defect is not recoverable with the Acquilian action

iv)                 Fault:  It is, as a rule, very difficult to prove fault on the part of the manufacturer–either because fault is simply not present in the production process or the prejudiced party cannot obtain proof of fault as the technological process is complicated. A buyer wishing to claim damages arising from harm caused by a defective product, also needs to prove fault on the part of the manufacturer in order to be successful with a product liability claim. In the context of product liability, the element of fault is usually negligence, as it would be a rare scenario where a manufacturer intentionally harmed consumers by putting defective products out on the market.

 Negligence entails the duty “to avoid reasonably foreseeable harm” and it is generally accepted that the test for negligence involves two concepts: foresee ability and preventability (duty of care). The following objective test therefore applies when a court has to establish negligence: “Could a reasonable producer/ manufacturer under the particular circumstances have reasonably foreseen the likelihood that his act could cause damage and/or injury, and could he have taken reasonable steps to prevent it? This statement reflects the classic formulation of the test for negligence by Holmes JA in Kruger v Coetzee. In general, a manufacturer acts negligently if he deviates from the care that a reasonable person in his position would have exercised, and if the loss were reasonably foreseeable and preventable.

The strict product liability doctrine:

  In the 1960’s, the American Law Institute drafted and adopted Restatement (2d) of Torts §402A.This section states:“(1) One who sells any product in a defective condition unreasonably dangerous to the user or consumer or to his property is subject to liability for physical harm thereby caused to the ultimate user or consumer, or to his property, if (a) the seller is engaged in the business of  selling such a product and (b) it is expected to and does reach the user or consumer without substantial change in the condition in which it is sold. (2) The rules stated in subsection (1) apply although (a) the seller has exercised all possible care in the preparation and sale of his product, and (b) the user or consumer has not bought the product from or entered into any contractual relation with the seller.”The Restatement serves as the “model” for most strict product liability law. Many states have adopted statutory versions of the Restatement. However, there is some variation among states in the way §402A is applied.

1.      Who may be liable for the damages caused by the defective products?

Any entity involved in the chain of distribution for a defective product may be liable for injuries caused by the defect. Potentially liable parties include the manufacturer, distributor, and retailer of the product. The purpose behind the strict product liability doctrine is to spread the risk of the loss caused by defective products away from the innocent consumer and to the entities in the chain distribution for the defective product that profit from the sale of the product. The seller or retailer of a defective product may be liable for resultant injuries or damages even if neither entity was at fault for creating the defect. However, in most states, a distributor or retailer of a defective product found liable for injuries caused by the defect may seek indemnity against such liability from the entity responsible for creating the defect. The liability of distributors and sellers not at fault for creating a product defect typically survives in states where the doctrine of joint and several liabilities has been abolished in favor of a pure comparative fault system of liability. In these states, product liability is considered to be a form of fault. Although the seller and/or distributor  may not be jointly and severally liable with the culpable manufacturer, the fault of the manufacturer is imputed by law to the distributor/ retailer.

2.

Elements of the Product Liability Tort Claim

Generally, to prevail on a strict product liability claim, a plaintiff must prove that an inherent defect in a product caused the damages claimed. In other words, the plaintiff must prove (1) that the product was inherently defective and (2) that the defect in the product caused the injury or damage. Both elements of the strict product liability claim must be specifically and independently proved. The strict product liability doctrine evolved, in part, because the plaintiff injured by a defective product will not typically be in a position to prove negligence during the design/manufacturing process. Therefore, in product  liability  plaintiffs are not required to prove the specific act or omission that created the defect. To establish the first element of a strict product liability claim, a plaintiff must prove that the product was inherently defective. That is, the plaintiff must prove that an inherent defect existed in the product at the time the product left the custody and control of the manufacturer/supplier/retailer. Some states, such as Arizona, follow Restatement (2d) §402A and also require the plaintiff to prove that the defect rendered the product unreasonably dangerous. To establish the defect element of the claim, the plaintiff must show a specific defect, or specific defects, that existed, or could have existed, in the product and caused the damages in issue. Typically, opinion testimony by a qualified expert is necessary to establish that the product was inherently defective. In a product’s liability case, plaintiff’s burden of proof is not carried by evidence of product failure and the conclusive argument that the product must have had some kind of defect otherwise it would not have failed. To establish the second element of a strict product liability claim, a plaintiff must prove that the damages were caused by the defect in the product. Proving that the product was inherently defective is not, by itself, sufficient to establish a prima facie product liability claim. A causal connection must be established between the inherent defect and the injury. A defendant in a product liability case is not liable for damages caused by a defective product unless the damages were actually caused by the defect in the product. A product can be defective due to a manufacturing defect, a design defect, or due to a failure to provide adequate warning about an unavoidable danger associated with the use of the product. A product may include a manufacturing defect if the product was not manufactured as intended. A design defect may exist in a product if use of the product caused injury even though the product was manufactured as designed and intended. A product may have a failure to warn defect if the manufacturer/seller fails to provide an adequate warning of an unavoidable risk associated with the use of the product.

3.

Manufacturing Defect

A product may include a manufacturing defect if the product was not manufactured as intended.

A product may include a manufacturing defect if the product was not manufactured to its own specifications. Again, many states differ as to whether the manufacturing defect must render the product unreasonably dangerous. There are many examples of manufacturing defects. A component part of a product may have been omitted during the manufacturing process. A product may have been improperly assembled. A product may have been broken or damaged during the manufacturing process. A part or component of a product may be weaker or more prone to failure than intended.

The strict product liability plaintiff alleging a manufacturing defect must prove the existence of a specific manufacturing defect to prevail on the claim. Although the product failure can be evidence that the product was defective, the failure alone does not prove the defect. The plaintiff must prove, either through physical or circumstantial evidence, a specific defect that existed in the product and caused the failure that occurred.

Product liability under ‘The Consumer Protection Act,1993’:

The Malaysian Parliament has recently passed the Consumer Protection Act1999 (herein after referred as the Act) with the aim of providing better legal protection to consumers. The Act covers most major areas of consumer protection including product liability which is contained in Part X of the Act .Product liability is generally understood as referring to the civil liability of a manufacturer or distributor for damage caused by a defect in the product. Under the existing law the victim of a defective product has to seek remedy either under the law of contract or tort of negligence which obviously is inadequate to protect them.

The act basically introduces a new system of liability in respect of death, personal injury and damage to property caused by defective products. Such a system is believed to overcome the problems inherent in contractual and negligence remedies and accordingly gives better protection to the consumer. However, as most of the provisions on product liability are based on part 1 of the United Kingdom Consumer Protection Act 1987, the criticisms of the UK Act may equally apply to the new Act. This article claims to provide an overview of product liability law in Malaysia under the Act. All the important provisions of the Act may be considered in order to provide a full appreciation of the scope of protection offered, its adequacy and its weaknesses.

Accident vs. Negligence:

Accident:

Most injuries and loss are a result of accident and not due to any negligence. In the case where no negligence is found and someone is injured or dies, there is still a loss, and liability for the loss falls on the individual who is viewed as causing the loss. This is where insurance coverage is beneficial if the individual has the proper coverage.

Negligence:

Injuries or loss as a result of negligence are more rare, and are due to someone doing

something they should have done, or not doing something they should have done. If an

individual wishes to collect money for damages from someone, it must be proven that the person acted negligently. They must show that the person did something wrong, and that they should have known not to do that. Presented in the tables below is a brief look at possible scenarios that could result in litigation or financial responsibility by the key parties in consumer direction. It is based largely on situations that have arisen under agency directed personal assistance, which legally has many similarities to consumers directed to personal assistance.

Consumer direction and liability

Any of the key parties in consumer direction are at potential risk of some liability. This risk varies greatly depending on the individual and the circumstances. All attempts to review the liability of a particular individual in a particular situation are purely hypothetical. Ultimately liability is decided by Hawaii laws and judicial system. The analysis below tries only to identify some general situations that could be encountered by key players in consumer directed personal assistance services, and some possible ways to reduce liability exposure of these parties.

Consumer Directed Personal Assistance vs. Agency Directed Personal Assistance:

 Findings suggest that the levels of risk and liability in consumer directed personal assistance are no greater than that experienced under agency directed personal assistance. If anything the risk is slightly less as consumer directed personal assistance workers tend to be family members and friends and therefore less inclined to file lawsuits against their consumer-employer. Most of the functions that were performed by the state or a provider agency in traditional Medicaid-funded home care services are now unbundled and performed by consumers, consultants, and fiscal agents. The core functions that continue to be performed by the state, such as enrolling consumers and responding to serious

problem connected with consumer care, carry some risk of liability, but if the state program is well structured and operated in accordance with that structure, this risk is minimal.

Concern over liability centers around three primary scenarios:

1.      The PA worker is injured while on the job.

2.      The consumer or person receiving care is injured in the course of being cared for by the worker.

3.      A third- party is injured as a result of actions taken by the PA worker.

Conclusion:

In addition to the remedies under contract and criminal law, consumers have rights under tort law. Based on its numerous legal intricacies, however, tort law is not the ideal remedy for injured consumers in different countries. For example, the traditional doctrine of negligence imposes heavy responsibility on the plaintiff to prove each of its required elements. These traditional legal requirements naturally encourage injured consumers to pursue legal remedies under different laws not surprisingly, it is estimated that for about half a century from 1914 to 1965, only 613 tort cases came before the appellate courts.

It is clear from the above discussion that under English and American Laws the liability of producers and service providers is of the nature of strict liability, yet it is not of the nature of absolute liability. The reason is that in these countries several defenses are available to the producers resorting to which the producers can defeat the claim of the consumers successfully.

Law of torts apart being less developed is also based upon English law of torts and upon the decisions given by the English courts. Hence the

Consumers will also have to take recourse to the decisions given by the English courts on the product liability domain in order to base their claims under law of torts. But under English Consumer Protection Act 1987 the liability has been based upon strict liability. As a result of this product liability under law of torts has been made more consumers oriented as the strict liability has been supported in place of negligence based liability in England. It is relevant to mention here that the Indian law under C.P. Act 1986 bases the product upon the negligence of the trader and the service provider. Therefore the Indian courts while dealing with the product liability under law of torts will either follow the Common Law principles of negligence based liability or the strict liability as propounded in the case Ryland v. Fletcher and under C.P. Act 1987. Thus it may be submitted that the Indian courts are not bound to accept any of the above principles laid down by the English courts. It has come to be established in India through the decision given by the Supreme Court in M.C. Mehta v. Union of India and Bhopal Gas Tragedy cases that the Indian Courts have gone much ahead with respect to product liability by not applying the exceptions to the strict liability laid down in Ryland v. Fletcher by the English Courts. Thus the Courts have recognized absolute liability in such cases where involuntary consumers were involved as suffers. It will therefore be right to say that the aforesaid approach of the

Supreme Court deserves to be applied to the cases of voluntary consumers also under Law of Torts. Courts can therefore provide for better protection and remedies to the Consumers by applying absolute liability concept and strict liability where the facts of the case demand it. This approach will be required especially in such cases where the consumer will not get proper relief under the C.P. Act 1986 due to negligence based liability recognized there. Then only the consumer’s interest will get proper recognition and protection but it shall be very difficult for the consumers to move to the ordinary courts under law of torts due to the requirement of court fees.

The orthodox legal requirements under the law of torts and contracts forced the policy makers to craft specific legislation to protect consumers. As a result, the Consumer Protection Act of 1986 was enacted with the objective of providing “cheap, simple and quick” justice to consumers.

References:

1.      Consumer protection under law of tort, chapter (iii)

2.      Product liability: The Common Law and The Consumer Protection Act 68 of 2008 by Sunel Van Der Linde.

3.      The Law of Products Liability(Paul Stephen Dempsey, Tomlinson professor of Law, McGill University)

4.      Heaven v. Pender (1883) 11 QBD 503 at 517.

5.      Product liability under The Consumer Protection Act, 1999 (Naemah Amin)

6.      Sabatino, C.P., Hughes, J.D. (Jan, 2004)

7.      The Product Liability Tort (Justin Hughes), chapter (vii).