Product liability - Who is liable under the Act

Learning Outcomes

This article identifies the parties who may be held liable for damage caused by defective products under the Consumer Protection Act 1987 (CPA 1987). It outlines the scope of liability for producers, own-branders, importers, and suppliers. For the SQE1 assessments, you will need to understand these categories of potential defendants and the specific circumstances in which each may be held liable under the strict liability regime established by the Act. This understanding will enable you to apply the relevant legal rules to identify the correct parties in SQE1-style single best answer MCQs.

SQE1 Syllabus

For SQE1, you are required to understand the principles of liability for defective products under the CPA 1987, particularly focusing on who can be held responsible. Your revision should concentrate on:

  • Identifying the different categories of persons potentially liable under the CPA 1987 (producers, own-branders, importers, suppliers).
  • Understanding the specific definitions and scope of liability for each category.
  • Applying the rules to determine the liable party or parties in a given factual scenario.
  • Recognising the limited circumstances under which a supplier can be held liable under the Act.

Test Your Knowledge

Attempt these questions before reading this article. If you find some difficult or cannot remember the answers, remember to look more closely at that area during your revision.

  1. Under the Consumer Protection Act 1987, which of the following is primarily liable for damage caused by a defective component part within a finished product?
    1. The supplier of the finished product only.
    2. The producer of the component part only.
    3. Both the producer of the finished product and the producer of the component part.
    4. The importer of the finished product only.
  2. ShopSmart supermarket sells a range of products under its own ‘ShopSmart Essentials’ brand, although these products are manufactured by various other companies. If a ShopSmart Essentials kettle proves defective and causes injury, who is potentially liable under the CPA 1987?
    1. The original manufacturer only.
    2. ShopSmart only, as the own-brander.
    3. Both the original manufacturer and ShopSmart.
    4. Neither, as ShopSmart did not manufacture the kettle.
  3. In which circumstance might a retailer (supplier) be held liable under the CPA 1987 for damage caused by a defective product they sold?
    1. If the retailer assembled the product incorrectly.
    2. If the retailer cannot identify the producer or importer of the product upon request by the injured party within a reasonable time.
    3. If the retailer advertised the product heavily.
    4. A retailer can never be liable under the CPA 1987.

Introduction

The Consumer Protection Act 1987 (CPA 1987) establishes a regime of strict liability for damage caused by defective products. This means a claimant does not need to prove fault (negligence) on the part of the defendant. Instead, liability arises simply from the fact that a product was defective and caused damage. A key aspect of applying the CPA 1987 in practice, and for the SQE1 exam, is identifying who can be held legally responsible for such damage. The Act specifies several categories of persons who may be liable.

Liable Parties under the CPA 1987

Section 2(2) CPA 1987 identifies the primary categories of persons who can be held strictly liable for damage caused wholly or partly by a defect in a product. Section 2(3) CPA 1987 adds suppliers in limited circumstances.

Producers

The producer is the principal party liable under the Act. Section 1(2) CPA 1987 defines 'producer' broadly.

Key Term: Producer Under s 1(2) CPA 1987, this includes: (a) the manufacturer of a product; (b) the winner or abstractor of any substance (e.g., mining); (c) the person who carried out an industrial or other process affecting the essential characteristics of a product (e.g., food processing).

Liability extends to manufacturers of finished products, as well as producers of raw materials or component parts incorporated into a finished product (s 2(2)(a) CPA 1987).

Worked Example 1.1

A car manufacturer, AutoCorp Ltd, installs airbags manufactured by SafeAir Ltd into its vehicles. A defect in an airbag causes it to deploy unexpectedly, injuring the driver. Who is potentially liable under the CPA 1987?

Answer: Both AutoCorp Ltd (as the producer of the finished product, the car) and SafeAir Ltd (as the producer of the defective component part, the airbag) are potentially liable under s 2(2)(a) CPA 1987. The claimant can choose to sue either or both.

Own-Branders

Liability also attaches to any person who, by putting their name or trademark on the product, holds themselves out as the producer (s 2(2)(b) CPA 1987). These are often referred to as 'own-branders'.

Key Term: Own-brander A person who puts their name or mark on a product, thereby representing themselves as its producer, even if they did not manufacture it (s 2(2)(b) CPA 1987).

This commonly applies to retailers, like supermarkets, that sell products under their own brand name, even though the products are manufactured by another company.

Worked Example 1.2

QuickMart sells a toaster under its 'QuickMart Home' brand. The toaster is manufactured by ElectroGadgets Inc. The toaster malfunctions due to a defect and causes a fire, damaging the consumer's kitchen. Who is potentially liable under the CPA 1987?

Answer: Both ElectroGadgets Inc. (as the producer) and QuickMart (as the own-brander under s 2(2)(b) CPA 1987) are potentially liable.

Importers

Persons who import products into the UK from outside the UK in the course of their business are also treated as producers and can be held liable under the Act (s 2(2)(c) CPA 1987).

Key Term: Importer A person who, in the course of business, imports a product into the UK from outside the UK to supply it to another (s 2(2)(c) CPA 1987).

This ensures that consumers injured by defective imported goods have recourse against a party within the UK jurisdiction.

Suppliers

Generally, suppliers (such as retailers or distributors) who did not produce, own-brand, or import the defective product are not liable under the CPA 1987's strict liability regime. However, s 2(3) CPA 1987 provides a critical exception.

Key Term: Supplier Any person who supplied the product (e.g., retailer, wholesaler, distributor). Liability under the CPA 1987 is limited to specific circumstances defined in s 2(3).

A supplier can be held liable if:

  1. The person suffering damage requests the supplier to identify the producer, own-brander, or importer (or the person who supplied the product to that supplier).
  2. This request is made within a reasonable period after the damage occurs and at a time when it is not reasonably practicable for the claimant to identify that person themselves.
  3. The supplier fails, within a reasonable period after the request, to identify that person.

Revision Tip

Remember the hierarchy: primary liability rests with the producer/own-brander/importer. Supplier liability under s 2(3) is secondary and conditional on the supplier's failure to identify those higher up the supply chain upon request.

Worked Example 1.3

Sarah buys a hairdryer from a local electrical shop, 'Sparky's'. The hairdryer explodes during use, causing burns. Sarah doesn't know who manufactured or imported it. She asks Sparky's owner to identify the producer. The owner refuses, saying it's not their responsibility. Can Sarah hold Sparky's liable under the CPA 1987?

Answer: Yes, potentially. Sparky's is the supplier. If Sarah made the request within a reasonable time after the injury, it was not reasonably practicable for her to identify the producer herself, and Sparky's failed to identify the producer (or their own supplier) within a reasonable period, Sparky's could be held liable under s 2(3) CPA 1987.

Exam Warning

Be careful not to confuse the supplier's potential liability under s 2(3) CPA 1987 with liability in common law negligence or contract. A supplier might be liable in negligence if they were at fault (e.g., improperly stored the product) or in contract to the direct purchaser (e.g., for breach of implied terms as to quality), but CPA 1987 liability for suppliers is much narrower and depends only on the failure to identify the producer/importer/own-brander when requested.

Key Point Checklist

This article has covered the following key knowledge points:

  • The CPA 1987 imposes strict liability, meaning fault does not need to be proven.
  • Multiple parties in the supply chain can potentially be liable for damage caused by a defective product.
  • The primary liable parties under s 2(2) CPA 1987 are the producer (manufacturer, component maker, etc.), the own-brander, and the importer into the UK.
  • Suppliers (e.g., retailers) are generally not liable under the CPA 1987 strict liability regime.
  • A supplier can become liable under s 2(3) CPA 1987 only if they fail to identify the producer/own-brander/importer (or their own supplier) upon a reasonable request from the injured party.
  • A claimant can potentially sue multiple liable parties (eg, producer and own-brander) for the same damage.

Key Terms and Concepts

  • Producer
  • Own-brander
  • Importer
  • Supplier
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