Consumer Product Safety

Geraint G. Howells

• Publisher: Routledge
• Year: 2018
• ISBN:
  9780429869068
• Edition: 1
• Topic: Law
• Subtopic: Law Theory & Practice
• Index: Law

Published in 1998, this book seeks to analyse in a comparative framework laws relating to product safety. These include standard setting, general safety obligations, (enforcement agencies), recall of products, export control, product accident monitoring and information exchange systems. The countries studied will include UK, USA, Canada, France, Germany, Sweden, Australia, New Zealand, as well as EC law in the light of the recent EC product safety directives.

1 Consumer Product Safety Regulation

1. INTRODUCTION

A. Consumer Products

Consumer safety should be the first objective of any consumer protection policy.¹ Even governments which adopt laissez-faire economic policies accept that a pre-condition for free market transactions is the existence of guarantees about the safety of consumer products circulating in their economy.²

Some products present easily recognisable dangers to consumers. Drugs are of course inherently dangerous and there have been numerous major incidents concerning drugs and medical devices (Thalidomide, Opren, human growth hormones, breast implants etc.). Recent health scares concerning, inter alia, BSE, E-coli and listeria, have emphasised the dangers consumers face from food products. Motor vehicles also pose obvious safety concerns and even safety features such as air bags have been subject to debate as to whether they create their own dangers. However, this book is not about these types of consumer products. Many of the general issues raised could apply to these products, but they tend to be subjected to tailor-made regulatory regimes administered by specialist agencies, and so a detailed sector by sector analysis would need to be undertaken before any sound conclusions could be reached.

Instead, this book is about the residual class of general consumer products. Many of these products are familiar to us in our everyday life and because they are commonplace we often fail to appreciate their dangers. The boundaries of this category are not definite. The way in which such products are regulated tends to depend upon the extent to which special regimes/agencies exist for food, drugs, motor vehicles and whether a clear distinction is drawn between consumer and workplace safety. A sense of our subject matter can perhaps best be gained by looking at some examples. Of central importance in debates on consumer safety is child safety. The safety of toys and nursery equipment are typically priorities for consumer safety officials.³ Electrical equipment creates an obvious source of danger to consumers and is also usually closely regulated.⁴ Garden equipment (lawn–mowers, chain saws etc.) is another significant source of product related accidents. Sports equipment also creates dangers and there is much research into how protective equipment (eg helmets) can best protect product users. Ladders are another important source of product-relate injuries. In fact our subject-matter can extend to almost any household item, including furniture, white goods, cooking utensils and clothing.

Many of these products appear to be relatively low risk products (perhaps with the exception of the need for special protection for the young, old and disabled). However, home and leisure accidents account for a significant number of deaths and personal injuries (see, for instance, the figures produced by the National Commission on Product Safety in the United States, Chapter 4, section 1). Some of these accidents may be caused by poor quality manufacture, eg a ladder which breaks when someone stands upon it because a rung was inadequately secured. Others may be related to the product design. As products have become more complex it is harder for consumers to judge for themselves whether or not a product poses dangers. Indeed the risk of long term health risks due to exposure to toxic and carcinogenic substances is something which consumers are particularly poorly placed to judge. Other products may be unacceptably dangerous, because consumers have not been sufficiently well informed of a risk, which otherwise is an acceptable characteristic of the product. Equally the risk may derive from the consumer being inadequately instructed in the use of the product.

Of course not all accidents involving a product are caused by the product. Each incident has to be looked at to assess whether the product caused the injury, was merely part of the setting for a genuine accident, or if the injury was induced by the consumer’s behaviour. However, one should not rush to blame consumer behaviour for an incident without first considering whether or not the consumer’s behaviour was foreseeable and whether any steps could have been taken to prevent harm occurring.

Dealing with such a wide range of heterogeneous products causes a number of problems for the regulators of consumer products. Each product sector requires its own technical knowledge and gives rise to its particular design and ergonomic problems. Producers and trade associations have plenty of relevant expertise and have carefully developed positions on the crucial topics. Consumer product regulators have to spread their limited resources over a wide range of products. They therefore have either to spread their resources thinly and accept an imbalance in knowledge between themselves and the regulated industry or else prioritise areas and leave some consumer products hardly regulated. Consumer organisations typically face even more difficulties in stretching their meagre resources to cover a wide range of products.

The regulators of consumer products have to deal with numerous manufacturers. This places them at a disadvantage when compared with specialist agencies (dealing with, say, drugs and motor vehicles⁵) which have opportunities to build up close working relations with a limited number of manufacturers. Although such close relationships pose the danger of ‘agency capture’ by the industry which is being regulated, in reality a lot of regulation, both at the stage of setting standards and when imposing post-market controls, relies upon negotiations between regulator and regulated. This can be most effectively undertaken when the regulatory officials know whom to contact in the businesses concerned and have established a working relationship so that the regulated know the powers which can be used against them and have some respect for the officials’ ability to utilise those powers. This knowledge will then speed up procedures and prevent the regulators having to use up vital resources by invoking formal procedures.

B. Regulatory Strategy

(i) Private or Public Law

This is not the place for a detailed analysis of the ability (or otherwise) of the private law, in particular product liability rules, to protect consumers.⁶ Some brief comments are, however, in order to permit the reader an insight into the perspective from which the book is approached.

One rationale for product liability rules is to create incentives for producers to manufacture safer products. This is most evident in the United States where ease of access to justice in personal injury cases combines with high damage awards (including punitive damages) to make manufacturers fear product liability suits. In theory civil liability rules should ensure manufacturers make the most efficient cost:benefit analysis to produce products with the optimum degree of safety. Debate centres on whether this is best achieved by negligence or strict liability standards. Advocates of the negligence standard argue that it forces manufacturers to make the most rational decision possible given the information available to them at the time of production. They argue that strict liability will lead to inefficient choices being made since producers will have to be defensive in their decision–making in order to protect themselves against development risks, ie those risks which are only detected after marketing. Advocates of strict liability plead that manufacturers are better able to bear and spread the cost of damages resulting from such risks and that strict liability causes producers to give safety a higher priority.

Private law has not produced a perfect solution. Whether or not strict liability is adopted, the rules on causation and difficulties of access to justice prevent producers feeling the full force of private law rules. Where strict liability has been adopted there has been a tendency to soften it by accepting state of the art/development risks defences.⁷ This seems to result from a failure to carry through the compensation objectives of strict liability in the face of responsible behaviour by producers. However, there is a more deep rooted problem, which results from using the same legal principle both to provide compensation and to set design and production standards.⁸ The result is that neither is necessarily satisfactorily addressed.

The private law continues to be a lottery, which requires an injured party to be able to recognise a legal claim and have the resources to prosecute it, as well as the good fortune to find a solvent accessible defendant and the evidence to link him to his injury. It also typically insists that compensation should move between two individuals who are causally linked to the damage. Broader based compensation schemes which impose responsibility on industry sectors or society (in the form of the Government) are hardly developed.⁹ The private law places victims of product induced accidents in a privileged position compared to many other accident victims, and certainly to those who suffer the same symptoms from natural disease. In doing so it uses up a great deal of resources in meeting legal and expert witness fees and paying insurance company rake-offs. This money could be better devoted to meeting the needs of the injured.

A cheaper, fairer system of compensating accident victims would be a social insurance scheme. The New Zealand scheme is the prime example-of such a social insurance model.¹⁰ However, political reality dictates that such schemes are unlikely to be established elsewhere and are even presently being rolled back in New Zealand. Private law rules are therefore the only feasible means of ensuing that product victims receive compensation.

However, this does not mean that standard setting should be left to the private law. We have already noted reasons why producers do not feel the full impact of product liability rules – causation requirements, evidential problems and access to justice barriers all favour producers. Therefore producers may provide safety at a less than optimum level, even if one accepts that private law rules are capable in theory of producing the desired result. Most producers do, however, have a more genuine concern for their consumers. These responsible producers could benefit from regulation as some risks are complex to assess and a regulator can draw on more experience than a single firm. Equally defining an appropriate safety level is not a precise science. It should result from a complex balancing of different interest and values and once again a regulator would seem better placed to find a consensus than an individual firm, no matter what incentives the private law provides for efficient decision-making. Equally public regulation is justified as consumers should not have to trust to private decisions to guarantee the safety of the market place. If a firm miscalculates the risks it may suffer financially, but it is the injured consumer who suffers the physical harm

It is generally assumed that public regulation would be stricter than the private law.¹¹ In other words the private law removes X products from the market and the public regulations also remove Y products (ie those products – or, probably more accurately, product designs – which producers still find it efficient to produce despite product liability rules, but which are deemed by the regulators to be unacceptable). This is probably a true reflection of the present position where product liability rules are based on negligence or a weak form of strict liability which permits development risk and system damage.¹² However, this is not the inevitable, or even desirable, outcome.

Product regulation does not mean the development of risk free products. Rather it is about ensuring that products only pose acceptable risks. Acceptability needs to be judged against the utility of the product and the possibility of developing safer alternatives or using substitutes. Equally product regulation cannot be expected to regulate for risks which were unknowable at the time of marketing. Product regulation will certainly lead to products being marketed which will pose dangers to consumers. Consumers are likely to be injured by the acceptable risks inherent in lawfully marketed products. One could therefore imagine a legal regime which permitted products to be marketed with acceptable (and of course unknowable) risks, but which also provided compensation to those who were injured by them.

It must be possible for producers to factor into their price an amount to cover the cost of liability for acceptable/unknowable damage without forcing them to withdraw from the market completely (for then a socially useful product would be lost). The cost of acceptable risks ought to be relatively moderate as by definition they are proportionate to the utility of the product. Development risks pose more serious problems to actuaries, but generally insurance has been available for these risks.¹³

Any price increase ought, according to economic theory, to lead to a reduction in consumption of the goods. Supporters of the free market would suggest that this is a good thing as it means that only the economically efficient amount of the product will be produced. However, this rationing ought not to be necessary as regulation should have ensured only acceptable products are marketed. Of course a distinction could be drawn between the permission to market goods and the amount which it is desirable for society to consume. In a market economy price will inevitably be the tool for determining consumption patterns. This can lead to inequities in so far as low income consumers do not have the same access to goods as wealthier citizens. However, this issue is part of a broader debate about social justice. For present purposes it is important to note that it is legitimate to market products which pose dangers so long as the risk is acceptable/unknowable. It must also be accepted that a democratic society should be free to require compensation for those injured by these risks.

Many free marketeers and consumer activists would probably agree that in an ideal world it would be inappropriate to impose the burden of meeting this compensation obligation on producers directly. Free marketeers object to reasonable manufacturers having to bear the cost of political decisions to compensate individuals and consumers object to the fact that access to a socially useful product is rationed on the basis of the increased price, which the manufacturer has to charge to cover this extended liability. The circle can only be squared by the Government stepping in to meet the costs of the political decision to provide compensation to the victims of acceptable/unknowable risks. But that seems unrealistic in the present economic and political climate. The choice therefore becomes one of leaving these victims uncompensated or marginally restricting the choice of poorer ...

Table of contents

• Cover
• Half Title
• Title Page
• Copyright Page
• Dedication
• Table of Contents
• Preface
• 1. Consumer Product Safety Regulation
• 2. Product Safety – The European Dimension
• 3. International Product Safety
• 4. United States
• 5. United Kingdom
• 6. France
• 7. Germany
• 8. Conclusions
• Index