The Gazette 1986

GAZETTE

APRIL 1986

tects the non-commercial producer. Ground (d) ensures that a commercial producer will not be faced with the dilemma of having to comply either with mandatory regulations issued by the public authorities or with the terms of the Directive: if such a potential clash arises, the producer will have a good defence under the Directive if he complies with the mandatory regulations. Ground (e) of Article 7 contains an important modi- fication to the strict liability principle. A producer will be relieved of liability that would otherwise attach if he can prove that the state of scientific and technical know- ledge at the time when he put the product into circul- ation was not such as to enable the existence of the defect to be discovered. In other words, if the product was as safe as the "state of the a r t" would allow at the time of production, subsequent improvements in safety in the production process with respect to this product may not be carried on by an injured plaintiff as setting the standard of safety. To some degree this specific defence is contained, in general terms, in Article 6: for why should a person be "entitled to expect" a standard of safety which, ex hypothesi, was impossible to attain at the time the product was put into circulation? More- over, Article 6, as we have seen, specifies "the time when the product was put into circulation" as a circum- stance to be taken into account in determining whether a product is defective. This would appear to give some scope to the "state of the a r t" defence to operate, even without the express ground to this effect contained in Article 7. In the United States conformity with the "state of the a r t" will generally result in the producer escaping liabil- ity, either as an affirmative defence or on the basis that the product should not be regarded as being defective in such a manner as to be "unreasonably dangerous" - the core concept in products liability law there. Prosser & Keeton, 29 observe that: "If inability to discover a risk or hazard related to product design is regarded as a defence, then it is true that the only practical difference between strict liability for design hazards using a danger-utility test and negligence is a change in the burden of p r oo f ." It is perhaps worth raising the question whether the "state of the a r t" defence contained in Article 7 of the Directive would be more effective in exempting a producer from strict liability under the Directive than from liability in negligence at common law. Mere proof that the state of scientific and technical knowledge at the time the product was put into circulation "was not such as to enable the existence of the defect to be discov- ered" will relieve the producer of strict liability; but in a negligence action the matter would not be so easily decided in his favour. A separate question could arise in some cases as to whether, in view of the limited level of scientific knowledge and relatively undeveloped "state of the a r t ", it was negligent to have put the product into circulation. The risk to the consumer could well out- weigh the benefits, especially where the desire to make profits encouraged a premature release of a product onto the market. It should be noted that any Member State may, by way of derogation from Article 7(e), provide that the producer is to be liable even where he proves that the

state of scientific knowledge at the time when he put the product into circulation was not such as to enable the existence of a defect to be discovered. Ground (f) of Article 7 allows the manufacturer of a component to escape liability under the Directive where, in effect, the responsibility lies with the manufacturer of the product in which the component is fitted. That responsibility can arise where the affect is attributable (i) to the design of the product in which the component is fitted, or (ii) to the instructions given by the manufac- turer of the product. It is possible to imagine cases where the defect is attributable to a combination of causes, including the act of the manufacturer of the component and the instructions given by the manu- facturer of the product. In such instances joint and several liability under Article 5, rather than liability being imposed solely on the manufacturer of the product would appear appropriate. In other words it seems that, "attributable" in ground (0 should be inter- preted as meaning "attributable exclusively" to the matters specified in the ground. In view especially of the terms of Article 8, para. 1, it might indeed have been better if ground (0 had determined this issue more clearly. In the United States a somewhat similar defence has been recognised. Prosser & Keeton, 50 explain that if an assembled product was unreasonably dangerous because the component part was unfit for the particular use that the assembler was making of it, "then arguably the defect is in the design of the assembled product rather than in the design of the component pa r t ." This does not mean, however, that the manufacturer of the component part will always be able to escape liability: "If the maker of the component part. . . knows or has reason to know that the part will be used in a way that will make the assembled product unreasonably dan- gerous then such a seller may well be subjected to liability on a warranty of fitness theory if the purchaser was relying on the seller, or a negligent entrustment theory or perhaps strict liability in tort without regard to reliance." 51 Limitation Period and Extinction of Liability The idea of a limitation period is based on two policies: first that a defendant should be protected from stale, possibly fraudulent, claims, where accessibility to evid- ence has been diminished; and secondly that a plaintiff who sleeps on his rights is not entitled to an indefinite period within which to take the action. As one com- mentator has pointed out: "The conflict generated by these two often contradict- ory currents of thoughts is responsible for much of the discord in this area. One school of thought emphasises the security of the defendant, while the other emphasises the lack of diligence on the part of the plaintiff." 52 The thrust of the Directive seems, on balance, to favour the first school of thought. Though Article 10 is framed in terms generous to plaintiffs, the benefit of this is largely, if somewhat arbitrarily, subverted by Article 11. Article 10 requires Member States to provide in their legislation that a limitation period of three years is to apply to proceedings for the recovery of damages as

74