The Buck Stops Here

New legislation on product safety means that manufacturers are more likely to find themselves in civil or criminal proceedings than ever before. Paul Clarke and Sarah Reed of DLA Piper UK LLP explore the risks faced by manufacturers and offer some practical guidance for minimizing those risks

Harry S. Truman, the 33rd president of the US, displayed a sign on his desk in the Oval Office telling visitors that ‘the buck stops here’. As president, he claimed ultimate responsibility for whatever happened, good or bad, during his years in office.

In litigation, as in politics, the buck has to come to rest somewhere. The General Product Safety Regulations 2005 (GPSR) have widened the scope of the existing product liability regime, with the result that the buck is going further and faster. The GPSR builds on the Consumer Protection Act 1987 (CPA) and manufacturers are finding that they have more responsibilities than ever before.

Manufacturers must now take steps to ensure product safety before supply. Failure to do so might result in civil or criminal proceedings for injuries caused by defects in the equipment supplied.

As readers of Quarry Management will know, injuries to employees are not uncommon in the mining and quarrying industries, despite the enormous strides made in health and safety in recent years. Anyone who, for example, supplies or uses crushing and screening equipment now needs to be aware of their product safety obligations.

‘No fault’ liability

Under the CPA, product liability is ‘no fault’. Many find it strange that fault should be irrelevant. After all, we are constantly told that ‘where there’s blame, there’s a claim’. What if there is no blame at all? It no longer matters. Manufacturers in particular may find themselves liable if the injured party can show that:

• the manufacturer supplied or produced the equipment
• the equipment was defective
• ‘actionable’ damage was suffered
• the defect caused this damage.

Liability for damage cannot be excluded.

For the CPA to apply, the defect in the equipment must be safety related and must fall below what a user is entitled to expect. ‘Actionable’ damage under this regime includes personal injury, death and damage to personal property to the value of no more than £275.

Who might be liable?

Under the CPA, liability lies with the ‘producer’ of a product. The producer is:

• the manufacturer or the person who ‘won’ the product; or
• anyone who carried out a relevant ‘industrial process’ to the product.

Importers and anyone holding himself out as the producer by putting his name or trademark on the product may also be liable. In general, subsequent suppliers will not be liable unless the producer cannot be identified.

Defences

Producers have six possible defences:

1. The defect is attributable to compliance with legal requirements.
2. The producer did not supply the product.
3. The supply was not in the course of business.
4. The defect appeared after it had left the producer’s possession.
5. The science and technology of the time could not detect the defect.
6. The product was merely a component in another product and it was the other components that were defective.

General Product Safety Regulations 2005

The GPSR impose a duty on producers of goods not to place them on the market unless they are safe. Products are presumed safe if they meet existing UK health and safety laws.

Under the GPSR, producers of goods are primarily liable for ensuring the safety of their products. Crucially, anyone in the supply chain who affects the safety properties of their product can also be caught by the GPSR. This might be relevant if work is carried out to crushing or screening equipment after purchase.

Producers must also give purchasers information, including the relevant batch number, and assess ongoing risks throughout the product’s life. Distributors have to be updated on risks, and records of complaints must be made. Suspect products may have to be withdrawn from sale and the authorities notified of any known risks.

The GPSR also subject distributors to certain obligations. A ‘distributor’, for these purposes, is someone in the supply chain whose activities do not affect the safety of the product. A distributor must not supply products which he knows or should have presumed to be dangerous.

A distributor must also keep records necessary to trace the origin of unsafe products and monitor safety. Distributors, like producers, have a duty to notify the authorities of known risks.

Enforcement

Trading Standards authorities can enforce compliance by serving suspension notices to ban future sales while tests are undertaken. They can order products to be marked with warnings, serve withdrawal notices preventing further supplies of dangerous products already on the market, and serve recall notices requiring products to be returned. Dangerous goods can be forfeited and destroyed.

Health and Safety at Work

In addition to the regulatory framework for product liability, the Health and Safety at Work etc Act 1974 (HSWA) imposes obligations on manufacturers, suppliers and importers.

Products must be designed and constructed to be safe and without risk to health when they are being used or maintained by a person at work. Manufacturers have wide-ranging duties to carry out tests, to provide instructions and to keep buyers informed about anything that might give rise to a serious risk to the health or safety of employees.

Potential penalties

If manufacturers breach any of their obligations outlined above, they can face both criminal and civil penalties. Damages to the injured party may be awarded under the CPA, although these can be reduced if they have been careless about their own safety. If an employee totally disregards the clear instructions and warnings provided with equipment, in circumstances where compliance could have avoided the accident, it is unlikely that the equipment will be found defective and the manufacturer will not be found liable.

The GPSR carry criminal penalties for breach. In particular, directors of manufacturers can be found personally liable, with penalties ranging from fines of up to £20,000 or imprisonment of up to 12 months. The HSWA carries similar criminal penalties for breach.

Employers’ duties

While the buck usually stops with manufacturers, employers also have a duty to keep their employees safe. They have a duty to take reasonable care for the health and safety of the workforce and not to expose them to unnecessary risk. This duty includes the obligation to provide adequate plant, machinery and equipment.

Under the Employer's Liability (Defective Equipment) Act 1969, an employer will be liable if an employee suffers personal injury at work as a result of using defective equipment given to him by his employer. Even if the injury has been caused by defects that are the fault of third parties, such as the manufacturer, the employer is, in law, deemed negligent.

The employer can, of course, seek to pass on civil liabilities down the contractual chain, and can still argue that their employee was the author of their own misfortune by contributory negligence.

Practical steps to minimize risks to employees

Employers can reduce the risk of injury to their employees by:

• ensuring that equipment is thoroughly checked for any potential defects when delivered
• ensuring that it is stored in accordance with the manufacturer’s instructions
• ensuring that the manufacturer’s instructions are seen and understood by employees using the equipment
• training staff in the proper use of the equipment, especially if it is potentially dangerous
• ensuring that employees follow instructions by monitoring their use of the equipment
• ensuring that warning labels are seen, read and understood by employees, especially if they are unlikely to see the packaging.

Accidents do happen, at work and elsewhere, but the tightening of the product safety laws has made manufacturers more aware than ever of their risks and responsibilities. In an industry that is fighting to improve employee safety, the new regime should benefit employers, employees and manufacturers alike.

There are those in the industry for whom the product safety regime has gone too far. Those people should remember president Truman’s saying that ‘a pessimist is one who makes difficulties of his opportunities; an optimist is one who makes opportunities of his difficulties’.