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A Broken Notion: Impact of Modern Technologies on Product Liability

Published online by Cambridge University Press:  10 March 2020

Joasia LUZAK Open the ORCID record for Joasia LUZAK [Opens in a new window]
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Abstract

Modern technologies enable traders to design more personal and comprehensive product labelling, as well as to improve product traceability through the supply chain. Personalised and comprehensive product information could raise consumers’ product awareness, shaping new consumers’ product and safety expectations. The improved product traceability through the supply chain could extend the producers’ control over the product, beyond the moment the product left the manufacturing process. This paper examines the impact of modern technologies on European rules of product liability. Specifically, it considers whether the recognition of a defective product in the currently reviewed Product Liability Directive should continue to follow the test of the public’s safety expectations, as well as whether producers could continue to rely on the defence of a product not being defective when they put it into circulation.

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Articles
Information
European Journal of Risk Regulation , Volume 11 , Issue 3 , September 2020 , pp. 630 - 649
Copyright
© The Author(s), 2020. Published by Cambridge University Press

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Footnotes

*

Associate Professor, University of Exeter Law School; email: j.luzak@exeter.ac.uk; Visiting Associate Professor at the Amsterdam Centre for Transformative Private Law (ACT), University of Amsterdam; Member of the Ius Commune Research School. This paper was first presented at the conference “Product Safety, Consumers’ Health and Liability Law – Challenges Posed by Science, Policy Reasons and Contemporary Markets” that took place on 8–9 June 2017 at Laval University, Quebec City, Canada. With many thanks to the members of the ACT research group for their valuable comments on the first draft of this paper.

References

1 Council Directive 85/374/EEC on the approximation of laws, regulations and administrative provisions of the Member States concerning liability for defective products [1985] OJ L210/29 (Product Liability Directive).

2 See European Commission, “Report from the Commission on the Application of Directive 85/374 on Liability for Defective Products” COM (2000) 893 final, 28; European Commission, “Third Report on the Application of Council Directive Concerning Liability for Defective Products” COM (2006) 496 final, 11; European Commission, “Fourth Report on the Application of Council Directive 85/374/EEC Concerning Liability for Defective Products” COM (2011) 547 final, 11.

3 European Commission, “Report on the Application of the Council Directive Concerning Liability for Defective Products” COM (2018) 246 final; European Commission, “Evaluation of Council Directive 85/374/EEC Concerning Liability for Defective Products” (Staff Working Document) SWD (2018) 157 final. See further the analysis of the review outcomes in Fairgrieve, D, “Reforming the European Product Liability Directive: plus ca change, plus c’est la meme chose?” (2019) 1 Journal of Personal Injury Litigation 33 Google Scholar.

4 Commission, “Report”, supra, note 3, p 8.

5 ibid, 9–10.

6 Fairgrieve, supra, note 3, pp 35–36.

7 Commission, “Report”, supra, note 3, pp 9–10.

8 See eg Wuyts, D, “The Product Liability Directive – More Than Two Decades of Defective Products in Europe” (2014) 5(1) Journal of European Tort Law 15 CrossRefGoogle Scholar.

9 On the “fabrication theory”, see eg Micklitz, H-W, “Liability for Defective Products and Services” in Reich, N et al (eds), European Consumer Law (Cambridge, Intersentia 2014) p 251.Google Scholar

10 See also Micklitz, supra, note 9, p 243.

11 Joined Cases C-503/13 and C-504/13 Boston Scientific Medizintechnik EU:C:2015:148, para 38.

12 Micklitz, supra, note 9, pp 246–47.

13 Under the current framework, producers could try to escape product liability by claiming the so-called development risk defence (ie that they could not have been aware of the risk considering the state of knowledge at the time of putting a product into circulation), see Art 7(e) Product Liability Directive. Alternatively, they could prove that a product was not defective when they put it into circulation, see Art 7(b) Product Liability Directive.

14 See Micklitz, supra, note 9, p 246.

15 ibid, 248.

16 ibid.

17 See eg Wuyts, supra, note 8, pp 15–16.

18 ibid, 8.

19 See eg Case C-210/96 Gut Springenheide EU:C:1998:369, para 31.

20 On the ever-widening application of the average consumer benchmark in EU consumer law, see eg Théocharidi, E, “Effectiveness of the ADR Directive: Standard of Average Consumer and Exceptions” (2016) 1 European Review of Private Law 103 Google Scholar.

21 See eg Ben-Shahar, O and Schneider, CE, More Than You Wanted to Know: The Failure of Mandated Disclosure (Princeton, NJ, Princeton University Press 2014)Google Scholar; Ayres, I and Schwartz, A, “The No-Reading Problem in Consumer Contract law” (2014) 66(3) Stanford Law Review 545 Google Scholar; Bakos, Y, Marotta-Wurgler, F and Trossen, DR, “Does Anyone Read the Fine Print? Consumer Attention to Standard-Form Contracts” (2014) 43(1) Journal of Legal Studies 1 CrossRefGoogle Scholar; Seira, E, Elizondo, A and Laguna-Müggenburg, E, “Are Information Disclosures Effective? Evidence from the Credit Card Market” (2017) 9(1) American Economic Journal: Economic Policy 277 CrossRefGoogle Scholar.

22 The fact that observant and circumspect consumers should pay attention to personalised information does not, of course, take away the producers’ obligation to provide this information in a transparent manner. On the principle of transparency, see eg Seizov, O, Wulf, AJ and Luzak, J, “The Transparent Trap: A Multidisciplinary Perspective on the Design of Transparent Online Disclosures in the EU” (2019) 42 Journal of Consumer Policy 149 CrossRefGoogle Scholar.

23 On using patients as a benchmark for determining defects of medical products, see eg Boston Scientific Medizintechnik, supra, note 11, paras 38–40; Case C-621/15 W and Others EU:C:2017:484, para 41.

24 See eg Case C-127/04 O’Byrne EU:C:2006:93, paras 27–32.

25 ibid, para 27.

26 ibid, para 29.

27 Case C-402/03 Skov v Bilka EU:C:2006:6, para 28.

28 Boston Scientific Medizintechnik, supra, note 11, para 43; W and Others, supra, note 23, paras 28–31, 43.

29 For an overview, see eg Elvy, S-A, “Commodifying Consumer Data in the Era of the Internet of Things” (2018) 59 Boston College Law Review 439 Google Scholar; Luzak, J, “Is All Fair in War against Unhealthy and Unsustainable Lifestyles? The Right to Privacy Vs Modern Technology in Consumer Contracts” in Siliquini-Cinelli, L and Hutchison, A (eds), The Constitutional Dimension of Contract Law. A Comparative Perspective (Berlin, Springer 2017) pp 39–59 CrossRefGoogle Scholar; Lewinski, P, Trzaskowski, J and Luzak, J, “Face and Emotion Recognition on Commercial Property under EU Data Protection Law” (2016) 33(9) Psychology & Marketing 729 CrossRefGoogle Scholar; Stein, SG, “Where Will Consumers Find Privacy Protection from RFIDs?: A Case for Federal Legislation” (2007) 6 Duke Law & Technology Review 1 Google Scholar. See also The European Data Protection Board, “Guidelines 3/2019 on Processing of Personal Data through Video Devices” (10 July 2019), available at <https://edpb.europa.eu/sites/edpb/files/consultation/edpb_guidelines_201903_videosurveillance.pdf> (last accessed 1 November 2019), especially the examples on pp 16–17.

30 On the current application of RFID technology by traders, see eg Stein, supra, note 29, p 5; Weinberg, J, “Tracking RFID” (2007) 3 Journal of Law and Policy for the Information Society 835 Google Scholar; Mieling, C, “Are You Really Going to Eat That – Product Tracing, the Food Safety Modernization Act, and the Promise of RFID” (2014) University of Illinois Journal of Law, Technology & Policy 272 Google Scholar; Schmidt, JM, “RFID and Privacy: Living in Perfect Harmony” (2007) 34 Rutgers Computer & Technology Law Journal 255 Google Scholar.

31 See eg Schmidt, supra, note 30, p 247.

32 Mieling, supra, note 30, p 267.

33 See eg Bibi, F et al, “A Review: RFID Technology Having Sensing Aptitudes for Food Industry and Their Contribution to Tracking and Monitoring of Food Products” (2017) 62 Trends in Food Science & Technology 91.CrossRefGoogle Scholar

34 Traceability has been defined as allowing a product to be traced within a single firm, whilst product tracing refers to tracking a product throughout the supply chain; see Mieling, supra, note 30, p 264.

35 This has led scholars to express privacy concerns in the offline world, similar to the ones expressed about behavioural online advertising, which remain, however, outside the scope of this paper’s enquiry. For further details, see eg Schmidt, supra, note 30; Article 29 Data Protection Working Party, “Working Document on Data Protection Issues Related to RFID Technology” (19 January 2005) 10107/05/EC WP 105, 7; Gratton, E, “If Personal Information Is Privacy’s Gatekeeper, Then Risk of Harm Is the Key: A Proposed Method for Determining What Counts as Personal Information” (2014) 24 Albany Law Journal of Science and Technology 105 Google Scholar.

36 Article 29 Data Protection Working Party, supra, note 35, p 7.

37 See also Willingham, KM, “Scanning Legislative Efforts: Current RFID Legislation Suffers from Misguided Fears” (2007) 11 North Carolina Banking Institute 315 Google Scholar.

38 See Mieling, supra, note 30, p 268.

39 Lewinski et al, supra, note 29, p 729.

40 Article 29 Data Protection Working Party, “Opinion 02/2012 on Facial Recognition in Online and Mobile Services” (22 March 2012) 00727/12/EN WP 192, 1.

41 Lewinski et al, supra, note 29, pp 731–32.

42 ibid, 730.

43 See eg A Hawkins, “KFC China Is Using Facial Recognition Tech to Serve Customers – But Are They Buying It?” (The Guardian, 11 January 2017), available at <https://www.theguardian.com/technology/2017/jan/11/china-beijing-first-smart-restaurant-kfc-facial-recognition> (last accessed 11 November 2019). On the extent to which this could be allowed under the current EU data protection rules, see also The European Data Protection Board, supra, note 29, pp 16–17.

44 For example, the use of carpets and rugs has been flagged as a cause of many injuries of elderly consumers as a result of tripping and falling; see W Watson et al, “Consumer Product-related Injuries in Older Persons” (Monash University Accident Research Centre Report No. 162, 1999), available at <https://www.monash.edu/__data/assets/pdf_file/0020/216461/muarc162.pdf> (last accessed 11 November 2019); M Lashbrook, “The Most Dangerous Products for the Elderly” (Houston Chronicle, 27 October 2015), available at <https://www.houstonchronicle.com/life/healthzone/article/Products-most-likely-to-cause-injury-or-death-to-6593432.php> (last accessed 11 November 2019).

45 Elvy, supra, note 29, p 435.

46 For example, it has been argued that collecting and selling data from interconnected cars will be more profitable in 2020 than the business of selling these cars; see M McFarland, “Your Car’s Data May Soon Be More Valuable Than the Car Itself” (7 February 2017) CNN Business, available at <https://money.cnn.com/2017/02/07/technology/car-data-value/index.html> (last accessed 11 November 2019). Moreover, an estimation put the number of biometric sensors in IoT devices by 2018 at a minimum of 500 million; see Elvy, supra, note 29, pp 436–37.

47 See eg N Helberger, “Forms Matter: Informing Consumers Effectively” (2013) BEUC, available at <https://www.beuc.eu/publications/x2013_089_upa_form_matters_september_2013.pdf> (last accessed 11 November 2019), 9; Seizov, Wulf and Luzak, supra, note 21, pp 151–52.

48 Helberger, supra, note 47, pp 8–9; Grynbaum, L, “Pre-Contractual Information Duties: The Foreseeable Failure of Full Harmonization” in Schulte-Nölke, H and Tichý, L (eds) Perspectives for European Consumer Law (Munich, Sellier 2010) pp 7–12 Google Scholar.

49 See supra, note 21.

50 See eg Ben-Shahar and Schneider, supra, note 21, pp 55–118.

51 ibid.

52 See the proposed text of Recital 19 in European Commission, “Proposal for a Directive of the European Parliament and of the Council Amending Council Directive 93/13/EEC of 5 April 1993, Directive 98/6/EC of the European Parliament and of the Council, Directive 2005/29/EC of the European Parliament and of the Council and Directive 2011/83/EU of the European Parliament and of the Council as Regards Better Enforcement and Modernisation of EU Consumer Protection Rules” (2018) COM/2018/0185 final, available at <https://eur-lex.europa.eu/legal-content/EN/TXT/?qid=1523880940100&uri=COM:2018:185:FIN> (last accessed 11 November 2019). The final text of this Directive, however, abandoned this clarification; see Recital 21, available at <https://data.consilium.europa.eu/doc/document/PE-83-2019-INIT/en/pdf> (last accessed 11 November 2019).

53 Art 4(2) of Council Directive 93/13/EEC on unfair terms in consumer contracts [1993] OJ L 95/29.

54 See eg Office of Fair Trading, “Unfair Contract Terms Guidance. Guidance for the Unfair Terms in Consumer Contracts Regulations 1999” (September 2008), available at <https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/284426/oft311.pdf> (last accessed 11 November 2019), 87–88.

55 See eg Jansson-Boyd, CV, Consumer Psychology (London, McGraw-Hill Open University Press 2010) p 51 Google Scholar; Peter, JP and Olson, JC, Consumer Behavior and Marketing Strategy (Burr Ridge, IL, Irwin 1996) p 539 Google Scholar.

56 See eg van Herpen, E, Hieke, S and van Trijp, HCM, “Inferring Product Healthfulness from Nutrition Labelling. The Influence of Reference Points” (2014) 72(1) Appetite 138 CrossRefGoogle ScholarPubMed.

57 See eg Bibi et al, supra, note 33, pp 91–103.

58 See eg European Commission, “EU Guidance to the Commission Regulation (EC) No 450/2009 of 29 May 2009 on Active and Intelligent Materials and Articles Intended to Come Into Contact with Food” (23 November 2011), available at <https://ec.europa.eu/food/sites/food/files/safety/docs/cs_fcm_legis_active-intelligent_guidance.pdf> (last accessed 11 November 2019).

59 Bibi et al, supra, note 33, p 97.

60 See eg Remington, BC et al, “Unintended Allergens in Precautionary Labelled and Unlabelled Products Pose Significant Risks to UK Allergic Consumers” (2015) 70 Allergy 813 CrossRefGoogle Scholar; DunnGalvin, A et al, “Precautionary Allergen Labelling: Perspectives from Key Stakeholder Groups” (2015) 70 Allergy 1039 CrossRefGoogle Scholar; Food Standards Agency, “‘May Contain’ Labelling – The Consumer’s Perspective” (2001), available at <https://allergyaction.org/wp-content/uploads/2017/09/AC-May-contain-report-maycontainreport.pdf> (last accessed 19 August 2019), ii.

61 DunnGalvin et al, supra, note 60, pp 1039–40.

62 As this could cause privacy concerns, the benefits of such a solution should be carefully considered.

63 See eg Pettigrew, S and Pescud, M, “The Salience of Food Labelling Among Low-Income Families with Overweight Children” (2013) 45(4) Journal of Nutrition Education and Behavior 332 CrossRefGoogle ScholarPubMed.

64 Compare with issues of personalised pricing, eg TJ Richards, J Liaukonyte and NA Streletskaya, “Personalized Pricing and Price Fairness” (2016), available at <https://ageconsearch.umn.edu/bitstream/235809/2/Richards_Price_Fairness_AAEA_Paper.pdf> (last accessed 11 November 2019); Miller, AA, “What Do We Worry About When We Worry About Price Discrimination? The Law and Ethics of Using Personal Information for Pricing” (2014) 19 Journal of Technology Law and Policy 41 Google Scholar.

65 To the extent, therefore, that product safety standards have not been adopted for the given product type.

66 For further details on the benefits of adopting various policy measures in labelling practices that consider their impacts on consumer behaviour, see eg Luzak, J, “Who Calls the Tune? Stocktaking of Behavioural Consumer Protection in Europe” in Micklitz, H-W, Sibony, A-L and Esposito, F (eds), Research Methods in Consumer Law (Cheltenham, Edward Elgar 2018) pp 239–75CrossRefGoogle Scholar.

67 For further details on the differences between active and passive consumers, see eg Luzak, J, “Online Disclosure Rules of the Consumer Rights Directive: Protecting Passive or Active Consumers?” (2015) 3 Journal of European Consumer and Market Law 79 Google Scholar.

68 Higgins, LM, McGarry Wolf, M and Wolf, MJ, “Technological Change in the Wine Market? The Role of QR Codes and Wine Apps in Consumer Wine Purchases” (2014) 3 Wine Economics and Policy 19 CrossRefGoogle Scholar. This is consistent with theories on consumer psychology showing that consumers tend to be interested in information already confirming their views or in the area of their already-expressed interests; see eg Jansson-Boyd, supra, note 55, p 51.

69 The possibility of adjusting the notion of a “defect” in the revision of the Product Liability Directive has already been considered; see Commission, supra, note 16, p 21.

70 See supra, note 3.

71 See eg Ramsay, I, Consumer Law and Policy: Text and Materials on Regulating Consumer Markets (Oxford, Hart Publishing 2012) p 582 Google Scholar.

72 It is impossible to fully eliminate the risks, however, and thus exclude a producer’s liability; see Micklitz, supra, note 9, p 248; Wuyts, supra, note 8, p 18.

73 See eg Wuyts, supra, note 8, p 17.

74 This would hold true if the fictitious benchmark of an average consumer was applied in order to assess whether the information should have reached the public at large.

75 On the need to adopt more product safety standards, see also European Commission, “Liability for Emerging Digital Technologies” (Staff Working Document) SWD (2018) 137 final 18. Such standards could be adopted, for example, by the European Standardisation Organisations; for further details, see <https://www.cencenelec.eu/standards/ESOs/Pages/default.aspx> (last accessed 1 November 2019). On the problems that would have to be overcome in the current standardisation process in the example of the services sector, see eg van Leeuwen, B, European Standardisation of Services and Its Impact on Private Law: Paradoxes of Convergence (Oxford, Hart Publishing 2017)Google Scholar.

76 Previously, it has been argued that a court could act as an informed representative of the public at large; see eg Bartl, H, Produkthaftung nach neuem EG-Recht (Landsberg am Lech, Verlag Moderne Industrie 1989)Google Scholar, as well as that more judges with technical training should be appointed and that the evidence should be provided by court-appointed impartial experts rather than experts nominated by parties to the procedure; see eg Barbier de la Serre, E and Sibony, A-L, “Expert Evidence Before the EC Courts” (2008) 45(4) Common Market Law Review 941 Google Scholar.

77 If policy-makers do not replace the current test with the newly suggested approach, they should at the very least give more weight to the court-appointed experts’ testimony and existing standards when resolving any doubts or controversy surrounding the assessment of the public’s product and safety expectations.

78 Directive 2001/95/EC of the European Parliament and of the Council on general product safety [2002] OJ L11/4 (General Product Safety Directive).

79 Recitals 14–16 GPSD already draw attention to the necessity of further improvements in the standardisation process.

80 See eg Weinberg, supra, note 30, pp 785–99. Previously, for example, English courts have held that producers are not expected to apply best practices in guaranteeing product safety; see Worsley v Tambrands Ltd [1999] EWHC 273 (QB).

81 For example, such an argument was accepted as the producer’s defence by English courts: Piper v JRI (Manufacturing) Ltd [2006] EWCA Civ 1344 CoA.

82 See eg Howlett, E, Burton, S, Tangari, AH and Bui, M, “Hold the Salt! Effects of Sodium Information Provision, Sodium Content, and Hypertension on Perceived Cardiovascular Disease Risk and Purchase Intentions” (2012) 31 Journal of Public Policy & Marketing 4 CrossRefGoogle Scholar; EATWELL, “Effectiveness of Policy Interventions to Promote Healthy Eating and Recommendations for Future Action: Evidence from the EATWELL Project” (2013), available at <http://eatwellproject.eu/en/upload/Reports/Deliverable%205_1.pdf> p 31 (last accessed 11 November 2019).

83 The regulators should further define what information would classify as product information.

84 See supra, note 49.