Product liability practices appeared in French law firms a couple of decades ago but the activity has significantly changed in the past few years. Unfortunately, if one were to summarise a trend, this change is not favourable to manufacturers and other professionals, which are subjected to tremendous difficulties. This legal field is constantly changing and the evolution systematically strengthens the rules applicable to businesses and the multiplication of the grounds that can be used to have their liability recognised. This requires product liability specialists to become experts in multiple fields.
First, there are ever more complex regulations, which may be deemed excessive. The professional who would merely analyse and apply the specific regulations that directly concern his or her industry or products would be rather unwise. A good example is the cosmetics industry. There is a specific Regulation on cosmetic products dated 30 November 2009 (Regulation 1223/2009). The European authorities considered that the significant changes it brought required that it only come into force in 2013. As a result, many manufacturers only focused on this Regulation, which led to serious negative consequences given that compliance with the Regulation alone almost inevitably leads to non-conformities, some obligations being provided for in other documents. The same applies to online selling. A now common practice has become the source of many obligations as sales methods are becoming more and more sophisticated and as more and more different operators appear on the market. Professionals are faced with a range of legal issues to address, which can all result in their liability being recognised, from the standard consumers’ right to change their mind, the different types of warranties that apply in the case of defect or the rules around data privacy, transport safety or payment facilities. Another good example of regulatory complexity is the anti-waste law no. 2020-105 dated 10 February 2020, which results from the European objectives of the Directives of the Circular Economy Package adopted in 2018 and completed in 2019 by the Directive on the reduction of the impact of certain plastic products on the environment. This law imposes many new obligations on manufacturers and retailers, implying that they master all product-related regulations, from spare parts and plastics to electronic products and food regulations.
This need to adapt to evolving liability rules depending on the novelties and innovations offered to consumers is the second challenge faced by manufacturers today. The current debate relating to the regulation on autonomous vehicles is a relevant example, all the more so given that the Member States have different approaches, which is actually proof of the way they deal with novelty and the uncertainty surrounding the inevitable future risks. France again distinguishes itself with its strict application of the precautionary principle. This necessarily gives rise to the question of the insurability of these new future risks, the cyber risk, which, when it occurs, leads to extremely high financial losses and damage to a company’s reputation.
The portfolio and reputation of the manufacturer can also be jeopardised by the authorities. Besides the absolute necessity to be aware of and understand the regulations and follow their constant evolution in order to assess the real risks arising from the placing on the market of products, the manufacturer must deal with authorities whose powers never stop increasing. The case of the French Directorate General for Competition, Consumer Affairs and Fraud Control (DGCCRF) is a good example. This authority is on the front line when a safety issue occurs, as it is the point of contact for France when this problem is a pan-European one, or even a global one, which is nearly always the case in our consumer society. However, the DGCCRF’s favourite sport now seems to be punishing manufacturers (by using various means – administrative penalty, settlement agreement, etc) on the ground of deceit, misleading advertising or any other non-conformity identified, which may not always have any consequence on the safety of the product or consumer. Labelling has become an unexpected source of risk with penalties that are multiplying, in particular in the event of missing information, error or the use of terms that have not been translated into French. Our experience shows that what can be called ‘product compliance’ must be seen as one of the major risks for companies. There are already many examples of this, such as the horsemeat scandal, dieselgate or the alleged planned obsolescence of products.
This being said, one must not underestimate another major challenge for manufacturers: actions brought by consumers or consumer protection associations. The current civil society demands modernity and innovation more and more from companies, which involves new risks that sometimes have not even been identified at the time of the sale, as consumers paradoxically attach increasing importance to their fundamental rights; for example, the manufacturer of connected objects. The professional must examine how to protect human rights, such as the right to privacy, through the connected objects it develops. The professional must be able to guarantee that the consumer will not take any risk by using the product. In addition the manufacturer must prove that its activity does not damage the environment, must participate in the effort to reach climate justice and must make sure that it does not expose the population to any risk. Yet, all manufacturing, design and transportation activities entail risks, all the more so in a modern society that is keen on innovations.
This concept of risk has become essential in a society where the certainty of damage is not always there and where the multiple exposure to different substances make it nearly impossible to establish a clear causal link. However, it would be a mistake to think that until the damage is established, the professional is protected. The courts have implemented an extremely unfavourable set of presumptions for companies, which goes against the principles of civil liability. This trend first appeared in the scope of asbestos litigation and spread to health products. The transformation of gross negligence rules – especially the creation of the loss relating to anxiety – have put many companies in danger. This case law may yet become the sword of Damocles of manufacturers and will extend towards many substances, from the most concrete cases (such as pesticides, chromium, fine particles) to anxieties that are a lot more difficult to accept, such as eco-anxiety or anxiety relating to climate change. A decision of the French Supreme Court dated 11 September 2019 could make this possible.
Finally, businesses must now take into account the fact that any statement they make about how they conduct their business and more specifically their supply chain (compliance with environmental requirements, against child labour or human trafficking) can become a product-related claim if one can demonstrate a link between the choice made by the consumer in favour of a specific brand and the said statements. It is on this ground, for instance, that Samsung was indicted in April 2020 in France on the ground of misleading commercial practices after stating on its website that it ‘respect[s] the fundamental rights of all people. Forced labour, exploitation of labour and child slavery are not allowed under any circumstances’; while some associations believe that it does not. Other large groups have also seen their statements about their environmental pledges posted years ago challenged by associations asking for evidence that they have complied with such pledges today. The threat of being prosecuted for misleading commercial practices is ever present.
The challenges described above faced by manufacturers and other professionals create challenges for product liability lawyers. Indeed, one should not limit the practice of product liability to claims whereby a consumer alleges that he or she was injured because of a product.
Product liability lawyers are faced with claims that can now easily become mass litigation as both plaintiffs’ counsel and courts are becoming used to very large pools of plaintiffs and civil procedure has adjusted to this phenomenon (for instance, the creation of “class action” mechanisms in France). Clients are also concerned by claims that do not involve a lack of safety of the product but rather a lack of compliance with the regulations or other types of damage, such as damage to the environment, to the workers’ welfare, moral damage on the ground that the consumer feels “betrayed” by something that is uncovered regarding the company’s business model or a simple risk of having all the above happen (ie, the fear of damage).
Therefore, to practise product liability today, lawyers must:
The product liability lawyer must also always take into account the fact that product-related matters always have an international reach. Therefore, before developing a defence for a jurisdiction, he or she must ensure that the said defence will not harm the manufacturer in another jurisdiction. In the gathering of evidence, the different approaches relating to the rules of privilege must be taken into account. Finally, when French or EU consumers initiate litigation in the United States while they have no ground to do so, pay attention to how the motion to dismiss on the ground of forum non conveniens will be drafted as it may open the door to plaintiffs’ rights that they would not have had, had they filed their claim in your jurisdiction first, especially if it is a civil law rather than a common law jurisdiction (eg, statute of limitations defence, access to documents, etc).
In conclusion, there are many who feared that the complexity of the regulations and the strictness of the courts would slow down innovation. The examination of the current consumer market, however, reveals the contrary. Manufacturers have not stopped progress. They are exposed to new risks and without giving serious thought to the extent of these risks, their future variety, their insurability and the elements to be gathered to defend oneself, we may envisage a future market marked by strong instability and a turnover of companies offering products but who can then no longer bear the consequences of non-conformity. This will inevitably go against the interests of consumers who are now asking for sustainable products and solvent companies who are accountable. Product-liability specialists need to emphasise this reality to courts when defending businesses.