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British Institute of International and Comparative Law
“'Reviewing the Review: the European Commission's Third
Review of the Product Liability Directive.' ”
Outstanding issues, and a look to the future
Rod FreemanPartner, Product Liability
5 December 2006
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• Survey of the practical operation of product liability systems in the EU
• Covered all (15) Member States
• Input from all operators, including government representatives, producers, distributors, consumer groups, academics and lawyers
Background to the 3rd Report – the Lovells Study
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The Lovells Report
Participants in the four categories
8528
168 68
Legal
Producers Insurers
Consumer Representatives
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The Lovells ReportResponses from Member States
GER
UK
ESP SWE
DK
ATBE
FIFR
GR
IRL
ITA
LUXNE
PRT
Austria 15 Belgium 11 Denmark 15 Finland 22 France 22
Germany 65 Greece 12 Ireland 10 Italy 20 Luxembourg 8
Netherlands 26 Portugal 19 Spain 14 Sweden 11 UK 74
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The Lovells Report – key findings
1. Product liability claims are on the increase
55%
1%
22%22%
greatly increased
increased a little
no change
decreased
Extent to which product liability claims have increased in past 10 years
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The Lovells Report – key findingsFactors leading to increase
76%
64%
53%
37%
27%
26%
25%
18%
14%
10 %3 %
43%
Consumer awareness of rights
Media activity
Greater access to information
Greater access to legal assistance
Awareness of claims abroad (eg US)Judicial attitudes to claims
Advertising by lawyers
Implementation of the Directive
Changes in other substantive laws
Changes to regulatory environment
Changes in court procedures
Deterioration in safety products
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The Lovells Report – key findings2. Product liability risks differ between Member States
Consumers
38%62%
a great deal
a little
Producers
53%27%
20%
a great deal
a little not at all
Insurers
74%
16%10% a great deal
a little
not at allLegal
8%
29%63%
a great deal
a little not at all
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The Lovells Report – key findings3. Overall, there is a
high level of acceptance of the Directive, which is generally regarded as striking an appropriate balance
Overall
14%
16%
66%
4%
strikes an appropriatebalance
does not adequatelyprotect consumers
does not adequatelyprotect producers
does not protect eitheradequately
Consumers
80%
20%strikes an appropriate
balancedoes not adequatelyprotect consumers
does not adequatelyprotect producers
does not protect eitheradequately
Producers
26%
3%66%
5%
strikes an appropriatebalance
does not adequatelyprotect consumers
does not adequatelyprotect producers
does not protect eitheradequately
Insurers
5%
7%86%
2%
strikes an appropriatebalance
does not adequatelyprotect consumers
does not adequatelyprotect producers
does not protect eitheradequately
Legal
6%
27%63%
4%
strikes an appropriatebalance
does not adequatelyprotect consumers
does not adequatelyprotect producers
does not protect eitheradequately
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The Lovells Report – key findings4. No obvious case for fundamental
reform
– The Commission should monitor developments
– The Directive as part of a wider, dynamic scheme
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The Fondazione Roselli Report
1. The development risks defence performs an important economic function, and it should not be removed
2. A compensation scheme for those injured by “development risks” should be considered
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Product liability in the EU – where are we now, where are we going?
Reform off the agenda?
not quite….
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Product liability in the EU – where are we now, where are we going?
The concept of “defect”
• Foster v Biosil/Richardson v LRC Products
• A v National Blood Authority/Bogle v McDonalds
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Product liability in the EU – where are we now, where are we going?
The development risks defence
• Advocate-General in European Commission v UK
• A v National Blood Authority
A worthless defence? Perhaps not:• French “Pentasar” case (September 2004)• Italian blood products case (April 2006)
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Product liability in the EU – where are we now, where are we going?
Defence of regulatory compliance?
Kitchen Stove, Case (1998)Swiss Elevator case (2004)Pollard v Tesco Stores (2006)
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The future?
• Ongoing monitoring by the Commission
• Changes in the broader liability environment– Procedural reforms?– Regulatory reforms
• Development of experience with GPSD
• REACH