Product Liability

Part 1
 Product Liability

Product liability law as enacted

in the CPA is a significant
development in consumer
protection law and it impacts
heavily on the standard of
local manufacturing and
supplying goods to
consumers.
 Product Liability

Importers of goods are also

expected to ensure that
goods imported and put into
circulation are as safe as
those produced locally.
 Product Liability

The law with modification follows

closely the European Community
Product Liability Directive
1985 implemented in member
states and non-member states
such as Australia.

This new law is in line with the

emerging international standard.
Example of Product Liability Lawsuits:
https://www.youtube.com/watch?v=x6h11ztPPyI
What happened in the McDonald's coffee case
Stella Liebeck v. McDonalds Restaurants, 1994

The McDonald's coffee case began when a 79-year-old woman went with her
son to a McDonald's drive-thru and ordered a cup of hot coffee. The woman, a
passenger in the vehicle, put the coffee between her legs and was attempting
to remove the lid when the spill occurred. How hot was the coffee?

The evidence at trial indicated that it was 82-88 degrees celcius when served
and that it was between 74 and 77 degrees celsius when it was spilled. The
evidence also showed that the coffee you make at home is usually about 57 - 60
degrees celsius. In a matter of six to seven seconds the spilled coffee caused
third degree burns to the woman's inner thighs and buttocks.
 What happened in the McDonald's coffee case

She claimed to have approximately $10,000.00 in

medical costs, including the costs associated with the
debridement and skin grafting necessitated by the
injury.

She also claimed to have permanent scarring as a result

of the injury.
What happened in the McDonald's coffee case

● Did McDonald's know the coffee was that hot?

● Did McDonald's know that coffee served that hot could
cause serious burns to people who might spill it?
● If McDonald's did know that coffee served that hot could
cause serious burns why did they continue to serve it so
hot?
● Can people really drink coffee that is that hot?
● Do all restaurants serve coffee that is that hot?
● Doesn't the lady who got burned bear any responsibility for
what happened?
What happened in the McDonald's coffee case
Stella Liebeck v. McDonalds Restaurants, 1994

The jury in this case decided that the coffee was a defective product and that
McDonald's had breached implied warranties of merchantability and fitness
for a particular purpose. The jury also decided that the lady did bear some
responsibility for what had happened. The jury said that she was twenty
percent at fault and that McDonald's was eighty percent at fault for the
injury. The jury awarded her $200,000.00 in compensatory damages (to
compensate her for past and future pain, suffering, emotional distress, lost
wages, medical bills, etc) and $2,700,000.00 in punitive damages. The award
of compensatory damages was reduced by the plaintiff's twenty percent of
fault. The judge reduced the award of punitive damages to $480,000.00 or
three times the compensatory damage award. The case settled for an
undisclosed amount before it was appealed.
Under the present law, if a defective
product causes loss due to injury or
damage, there are several ways in
which a claim for compensation may
be formulated

First, there can be a claim for

damages for breach of contract if
the parties are in a contractual
relationship.
Second, there can be a claim in tort
for negligence under the principle
established in Donoghue v
Stevenson

Third, there can be a claim for

compensation under Part X of the
CPA
http://bit.ly/ucs2612-9-2
Types Of Defect

There are two categories of

defective product:

a) unsafe product

b) substandard product
Types Of Defect

Defect in product particular reference

to lack of safely may be divided into
three parts.

Manufacturing defect

Design defect

Marketing defect
http://bit.ly/ucs2612-9-3
Manufacturing defect
Manufacturing defect refers to a defect
which occurs during the process of
production or construction or
assembly of product

A classic example of manufacturing

defect is the inclusion of an
unintended ingredient or foreign
object into the product
Manufacturing defect

A flaw during the production

process may also be caused
by defective raw materials
or defective containers
GROUP DISCUSSION :
http://bit.ly/ucs2612-9-G1
Give 3 examples of manufacturing
defects. You may start searching from
news reports.

Discuss whether the defects are done

during the process of production (e.g
defective raw materials or defective
containers) or construction or assembly.
Design defect

Design defect refers to the defect in a whole

run of product.

It may be caused by the imprudent choice of

appropriate materials, product formula,
ingredients or specifications, or failure to
incorporate sufficient safety features.

This kind of defect can normally be found in

high-tech products such as chemicals,
vehicles, drugs and medicines
Design defect

Design defect refers to the defect in a whole

run of product.

It may be caused by the imprudent choice of

appropriate materials, product formula,
ingredients or specifications, or failure to
incorporate sufficient safety features.

This kind of defect can normally be found in

high-tech products such as chemicals,
vehicles, drugs and medicines
Marketing defect

Marketing defect occurs when a product which is

properly designed and properly manufactured
becomes unsafe due to insufficient warning
labels or direction for use.

Warnings and instructions for use is one of the

important elements in determining the overall
safety of a product.

The liability for this type of defect will be

attributed directly to the manufacturer who has
failed to provide sufficient information about the
hazard or risk in using the product.
Marketing defect

Marketing defect occurs when a product which is

properly designed and properly manufactured
becomes unsafe due to insufficient warning
labels or direction for use.

Warnings and instructions for use is one of the

important elements in determining the overall
safety of a product.

The liability for this type of defect will be

attributed directly to the manufacturer who has
failed to provide sufficient information about the
hazard or risk in using the product.
GROUP DISCUSSION :
http://bit.ly/ucs2612-9-G2

Give 2 examples of design and

marketing defects. You may start
searching from news reports.
Product Liability
Part 2
Actions under contract and tort

Contracts for the supply of goods

normally contain
- express and
- implied terms
that are enforceable by the parties
Actions under contract and tort

Failure to carry out these terms, both

conditions and warranties, gives the
consumer the right of legal action
against the supplier of the goods or
services, usually the retailer from
whom the goods are obtained.
The manufacturer or importer of goods are generally
immune from actions based on contract simply
because there is no privity of contract between the
consumer and the manufacturer.
A consumer, however, can take an action against the
manufacturer or importer under common law in tort
for negligence
The manufacturer or importer of
goods are generally immune from
actions based on contract simply
because there is no privity of contract
between the consumer and the
manufacturer.
A claimant in negligence must be able to
establish the element of fault.

Duty of care

Breach of that duty

Causation

Loss or damage
The plaintiff must prove that the
loss or damage was caused by
some defect in the product.

The defect was the fault of the

person against whom the claim is
made.
The defect can be

a design flaw

production fault

component fault or

marketing fault.
Where consumer goods are defective;
It imposes direct liability for defective
products on :
- producers (usually the manufacturer
or someone who holds himself out
to be one); and
- importers of goods.
This cause of action is not dependent
upon contract or tort. There is neither
a need to neither show a contractual
relation between the consumer and
the manufacturer nor fault on the
part of the manufacturer.
Any person who is injured or suffers
damages as a consequence of defective
products is entitled to pursue the
statutory remedy.
However, it is notable that the statutory
scheme of liability does not affect rights
that may arise out of contract or tort.

In other words, the statutory scheme is

additional to and not a substitute for
rights existing under current law.
According to s 68(1) the following persons
are liable for any damage that is caused
wholly or partly by a defect in a product:

● the producer
● the importer
The producer :
The person who, by putting his name on the product
or using a trademark or other distinguishing mark in
relation to the product, has held himself out to be the
producer of the product;

The importer :
who has imported the product into Malaysia in the
course of his or her business.
http://bit.ly/ucs2612-9-1
Strict liability for defective products
The manufacturer is liable even if his
action is unintentional and he has taken
all precaution to prevent the defect.

It discourages reckless behavior and

needless loss by forcing potential
defendants to take every possible
precaution.
Strict liability for defective products
Strict liability is in respect of death, personal
injury and damage.

In strict liability situations, although the

plaintiff does not have to prove fault, the
defendant can raise a defense of absence of
fault, especially in cases of product liability.
The advantage of this approach for the
plaintiff is that liability may be imposed by
reason of the existence of a defect alone.

The producer may be held liable whether or

not the defect in the product was discoverable
or avoidable.

Under the rule, the plaintiff is relieved of the

burden of proving fault or negligence.
Although he still needs to prove that the
defect caused his injury, it is not necessary
that the defendant had caused the defect.
Intermediate examination of the product
will no longer exculpate the manufacturer
from liability for defects in the product
existing at the time when he supplied the
product.
Similarly the plaintiff may not have to take
the risk of suing every potential
defendant, since s 68(1) provides a wide
range of people, who can be easily
identified and are accessible, against whom
to pursue an action.
Products Liability by Terrell Hogan :
https://www.youtube.com/watch?time_continue=1&v=9z1G290ZnZ0&featu
re=emb_logo

How to Establish a Product Liability Case (Ep.31) by Injury Claim Coach :

https://www.youtube.com/watch?v=acGpgaaNIEI

Examples of Strict Liability Actions in Tort by The Business Professor :

https://www.youtube.com/watch?v=IJAXDWahkjk

Products Liability Law: Explaining the McDonald's coffee case:

https://corporate.findlaw.com/litigation-disputes/products-liability-law-expl
aining-the-mcdonald-s-coffee-case.html