Tort Law Class Outline: Product Liability and Consumer Protection

(Sources: Winfield et al., R&D et al.)

• This topic is part of Negligence

Product Liability under Common Law

• Meaning: Tortious liability of manufacturers of defective goods and providers of

deficient services for the injury caused to the consumers due to the defect/ deficiency

• Duty of care of manufacturers/ service providers:

• Origins: Donoghue v. Stevenson (Lord Atkin): “A manufacturer of products,

which he sells in such a form that he intends them to reach the ultimate
consumer in the form in which they left him with no reasonable possibility of
intermediate examination and with the knowledge that the absence of
reasonable care in the preparation or putting up of the products will result in
injury to the consumer’s life or property, owes a duty to the consumer to take
that reasonable care.”
• Therefore, the manufacturers of products have a duty to take reasonable care
• Now, the ambit of product liability as laid down in Donoghue v. Stevenson
has expanded to include manufacturers, repairers, assemblers etc. of goods +
service providers

• Product liability- Tortious concepts of Negligence and Strict Liability are important

• Persons liable for defective products now: manufacturers, repairers, assemblers,

fitters
• Distributor or supplier is usually not liable unless she/ he is under a duty of
care to examine or inspect a product that is dangerous for a reason that she/ he
should have known.
E.g. Andrews v Hopkins (1957):
Facts: D was a dealer in second hand cars. He sold an 18 year old car to a
finance company. The finance company hired the car to the claimant under a
 hire-purchase agreement. Soon after the purchase, the car met with an
accident. It was found that the car had a defective steering that led to the
accident. D had the opportunity to get the car examined for any defects before
selling it off to the finance company, and it was common for old cars to have
defective steering mechanisms. It was his duty to ensure that the car was at
least roadworthy
Held: D was liable to the claimant for negligence
Q. Is there a way that a supplier/ distributor of goods (particularly second hand goods)
can protect oneself from incurring product liability under the tort of negligence?
A. Yes, by releasing a suitable warning of possible defects. Such a warning is usually
deemed to be an adequate way of discharging the supplier’s duty of care.
Case: Hurley v. Dyke (1979)
Held: When the defendant auctioning off a vintage three wheeler car issued the
warning to the potential customers that if they decide to buy the car, they agree to buy
it “as seen with all its faults and without warranty,” it was a sufficient to discharge the
defendant from any future claims of product liability.
 Extension of the subject-matter under product liability: Initially it was mostly the
edible articles (food and drinks) that were included in the ambit of product liability.
But, now the ambit has expanded to include various other products such as clothes,
chemicals, elevators, tomb stones etc.
 Burden of Proof: The initial burden of proof is on the claimant to prove that the
concerned article/ product had a manufacturing defect and the injury/ harm resulted
from that defect. The claimant is required to provide sufficient evidence through
which an inference of the defendant’s negligence can be inferred. Balance of
probabilities (civil law)
 Possibility of alternative cause:
- Where the product in question is used for a different purpose from that for which it
was designed and the claimant’s injury is caused by such an unintended use, the
claimant may have no cause of action against the manufacturer.
- the product must be intended to reach in the form in which it left the manufacturer. It
must reach P with the same defect as it had at the time it left the manufacturer
 Case: Grant v. Australian Knitting Mills (1936): the defendants who were the
manufacturers of pants were held liable for the skin reaction caused to the claimant
(the ultimate consumer) as a the result of a chemical present in the fabric of the pants.
 Nature of Loss covered under product liability:
no liability for the defect itself. But, there is liability for the damage/ injury caused by
the defective product to the body and other property of the ultimate consumer.
Complex product: A product that is made up of multiple individual components. In
such a situation, the question arises as to whether compensation can be claimed for
the damage caused to the complex product due to a defective component ?
A: There is no clear answer to this question except for the point that the manufacturer
would be held liable if the defective component in a complex product is a
replacement/ added part.
Pre-emptive repairs: if a dangerous defect is discovered by a manufacturer after the
sale of a product, but before it has caused harm, the manufacturer needs to issue a
warning.
Product recall as a pre-emptory measure to mitigate liability

Product Liability under the Consumer Protection Act

(codification of common law)

• Historically product liability claims were decided under tort law- under the concepts
of Negligence and Strict Liability, along with acts like the Sales of Goods Act, 1930;
Drugs and Cosmetics Act, 1940 etc.

• There was no comprehensive legislation to protect the consumers. But, now we have
Consumer Protection Act- another example of codification of parts of Tort law

• Important steps leading to the current Consumer Protection law in India:

- Initially, dictum of caveat emptor (buyer beware) was prevalent
- Subsequently, due to the rise in consumer protection movement, the dictum of
caveat venditor (let the seller be beware) has become prevalent- this has compelled
the sellers to assume greater responsibility for their products and services
- 1985: UN General Assembly Resolution on Consumer Protection was laid down,
providing the guidelines to assist the developing countries in particular:
: in elaborating and strengthening consumer protection policies and legislation.
: encouraging high levels of ethical conduct for those engaged in the
production and distribution of goods and services to the consumers.
: protection of consumers from hazards to their health and safety and
availability of effective consumer redress.

- 1986: the Indian Parliament adopted the Consumer Protection Act (CPA, 1986)
Salient Points of CPA, 1986:
: It was an important Social welfare legislation enacted as a result of
widespread consumer protection movement within and outside India
: it provided for the protection of the consumers from defective products,
deficient services and unfair trade practices

: It provided for a three-tier tribunal system- Consumer Dispute Redressal

Commission- at District, State and National levels for the resolution of
consumer disputes. Therefore, all disputes falling under the ambit of the CPA
were to be decided by the consumer tribunals and not by the regular courts

[General characteristics of tribunals vs the regular/ conventional court system:

Judicial System in India

Conventional Court System Tribunals

SC- HC- DC For specific subject-matters:

consumer protection, environment
(National Green Tribunal), IT,
Company Law (National Company
Law Tribunal)

Characteristics: Characteristics:
 Case overload Powers similar to civil courts; orders
are enforceable;
Complainant-Opposing party
Appeals against the tribunal orders
can be made in the courts: HC and
SC

Benefits:
Speedier- relaxation in
implementation of the rules of
procedure and evidence
Cheaper- No court fee, parties can
represent themselves (lawyers not
needed)
Specialization- subject matter
specific

- 2019, August: CPA, 1986 has been replaced with the CPA, 2019

Organization of CPA, 2019: 8 chapters, 107 sections

Chapter I: s.1-s.2. Preliminary (objective (preamble) and definitions (sec. 2))

Chapter II: s.3-s.9. Consumer Protection Councils- Central, State & District
Chapter III: s.10-s.27. Central Consumer Protection Authority
Chapter IV: s.28-s.73. Consumer Dispute Redressal Commission
Chapter V: s.74-s.81. Mediation
Chapter VI: s.82-s.87. Product Liability
Chapter VII: s.88-s.93. Offences and Penalties
Chapter VIII: s.94-s.107. Miscellaneous

Difference between CPA 1986 vs CPA 2019

Some key provisions of CPA 2019:
Preamble: Objectives underlying the act: 1) protection of the interests of consumers and 2) to
establish authorities for timely and effective administration and settlement of consumers'
disputes
S. 2 (7): “consumer”
S. 2 (9): “consumer rights”
S. 2 (10): “defect”
S. 2 (11): “deficiency”
S. 2 (24): "manufacturer" means a person who—
(i) makes any goods or parts thereof; or
(ii) assembles any goods or parts thereof made by others; or
(iii) puts or causes to be put his own mark on any goods made by any other person;
S. 2 (34) "product liability" means the responsibility of a product manufacturer or product
seller, of any product or service, to compensate for any harm caused to a consumer by such
defective product manufactured or sold or by deficiency in services relating thereto;
S. 2 (36) "product manufacturer" means a person who—
(i) makes any product or parts thereof; or
(ii) assembles parts thereof made by others; or
(iii) puts or causes to be put his own mark on any products made by any other person; or
(iv) makes a product and sells, distributes, leases, installs, prepares, packages, labels,
markets, repairs, maintains such product or is otherwise involved in placing such product for
commercial purpose; or
(v) designs, produces, fabricates, constructs or re-manufactures any product before its sale; or
(vi) being a product seller of a product, is also a manufacturer of such product;

Cases on Consumer Protection

Case: Indian Medical Association v. V.P. Shantha & Ors (1995)

SLP decided by the SC
Question: whether the medical service rendered at a hospital/nursing home can be regarded as
'service' under Section 2(1)(o) of the Consumer Protection Act, 1986?
Ans: Yes, and thus, in the event of any deficiency in the performance of such service, the
aggrieved party can invoke the remedies provided under the Act 

• Occupation v. Profession
Four characteristics of occupations which are regarded as professions (according to
Rupert M. Jackson and John L. Powell):
i) the nature of the work which is skilled and specialized and a substantial part is
mental rather than manual;
ii) commitment to moral principles which go beyond the general duty of honesty and
a wider duty to community which may transcend the duty to a particular client or
patient;
iii) professional association which regulates admission and seeks to uphold the
standards of the profession through professional codes on matters of conduct and
ethics; and
iv) high status in the community.
• In the matter of professional liability, professions differ from other occupations for
the reason that professions operate in spheres where success cannot be achieved in
every case and very often success or failure depends upon factors beyond the
 professional's control. Therefore, a rational approach to professional liability would
be to require that professionals should possess a certain minimum degree of
competence and that they should exercise reasonable care in the discharge of their
duties.
• In general, a professional owes to the client a duty in tort as well as in contract to
exercise reasonable care in giving advice or performing services.
• Medical practitioners, though belonging to the medical profession, are not immune
from a claim for damages on the ground of negligence
• Consumerism is now firmly established in medical practice
• Objective of the CPA: protection of the better protection of the interests of consumers
• Objectives stated in UN General Assembly Resolution on Consumer Protection
(1985) on which the Indian CPA 1986 is based:
- assist developing countries in particular in elaborating and strengthening
consumer protection policies and legislation.
- encouraging high levels of ethical conduct for those engaged in the
production and distribution of goods and services to the consumers.
- protection of consumers from hazards to their health and safety and
availability of effective consumer redress.

Case: M/S. Spring Meadows Hospital & Anr v. Harjot Ahluwalia (1998)
Appeal arising out of the National Consumer Disputes Redressal Commission’s order
Facts: A child was being treated at the Spring Meadows Hospital in Delhi for typhoid. The
doctor prescribed an intravenous injection. The child’s parents purchased the injection and a
nurse administered it to the child. Immediately after receiving the shot, the child experienced
cardiac arrest. The child was kept on a manual Respirator. The condition of the child did not
show any improvement. The doctor advised the parents to admit the child in a hospital with
specialized care. The parents admitted the child in the Paediatric Intensive Care Unit of the
All India Institute of Medical Science. The doctors there informed the parents that irreparable
damage had been caused to his brain and if the survives, he would live only in a vegetative
state.
Question before the National Commission: Whether it was a case of deficiency of services,
and thus, negligence on part of the hospital? If yes, what compensation would the opposite
party be liable to pay to the complainant?
National Commission came to the conclusion that: it was a clear case of dereliction of duty
(Negligence) by the nurse, doctor and hospital as:
• the nurse was not even a qualified nurse and
• the hospital was negligent in having employed such unqualified people as nurse and
having entrusted a minor child to her care.
• The Dr. was negligent in the performances of his duties as he acted against the advice
of the senior doctor who told him to give the injection. But, he let the nurse do it.
• Thus, the minor patient had suffered on account of negligence, error and omission on
the part of nurse as well as the Dr. in rendering their professional services.
• The Commission awarded damages for the injury suffered by the child as well as the
mental agony suffered by the parents

The hospital appealed against the Commission’s order in the Supreme Court contending that
the parents are not entitled to any compensation as they are not consumers as defined under
the CPA, 1986
Question before the Supreme Court:
Q. whether the parents of the child as well as the child would be consumer within the
meaning of Section 2(1)(d)(ii) of the Act and as such can claim compensation under the Act?
Held: Yes
2(1)(d) : " Consumer" means any person who -
(ii) hires or avails of any services for a consideration… and includes any beneficiary of such
services other than the person who hires or avails of the services
Held: The definition clause is wide enough to include not only the person who hires the
services but also the beneficiary of such services which beneficiary is other than the person
who hires the services. Therefore, both the parents of the child as well as the child are
consumers within the meaning of Section 2(1)(d)(ii) of the Act and as such can claim
compensation under the Act.

Case: Liebeck v. McDonald's Restaurants (1994)- Hot coffee case (US)

Facts: A 79-year-old woman ordered a 49-cent cup of coffee from the drive-through window
of a McDonald's restaurant. Her grandson was driving and she was in the passenger seat of
the car. He parked the car so that she could add cream and sugar to her coffee. Liebeck placed
the coffee cup between her knees and pulled the lid. In the process, the entire cup of coffee
spilled on her lap. She was taken to the hospital- she had suffered third-degree burns on six
percent of her skin and lesser burns over sixteen percent. She underwent skin grafting,
suffered permanent disfigurement after the incident and was partially disabled for two years.
The temperature of the coffee at the time of incident was 180–190 °F (82–88 °C)

Question: was there a deficiency in service due to the high temperature of coffee?
Ans: Yes- product liability. 80% fault of the restaurant, 20% of the patient.
There was a warning requirement under the product liability law. As per the law- the warning
must be mentioned in a conspicuous place and it must warn the product’s user of possibly
dangerous features. The McDonald’s coffee cup said “contents hot”. It was held that this
warning was “ was neither large enough nor sufficient.”
She was awarded compensatory and punitive damages: $ 640,000. But, the parties settled out
of the court for less than $ 600,000.