If you have developed a product as an entrepreneur and you bring it to market, it is your great pride. You enjoy it. However, the launch also entails risks. As a producer, you are responsible for the safety of the product. Is the product unsafe or does it cause damage? Then you can be held liable as a producer.
What kind of damage?
The damage that can possibly be recovered on the basis of product liability is twofold. Firstly, this is personal injury. For example, if a person suffers damage because your product explodes, then you are liable for this. The question of guilt is irrelevant in this context, since product liability concerns a strict liability. The second category of damage that is eligible for compensation is property damage, at least insofar as it concerns damage to a thing that is used in the private sphere. More specifically: damage caused by the product to another thing that is usually intended for use or consumption in the private sphere and that has also been used or consumed by the injured party mainly in the private sphere. This means that a company that suffers damage to things cannot recover this damage via this route. A company will have to follow the pattern of the unlawful act for this.
Liable party?
However, it is not only the producer himself who can be held liable for this damage.
In the context of product liability, the definition of 'producer' has been expanded, meaning that in certain cases, in addition to the producer, manufacturers, namesakes, importers and suppliers can also be held liable for damages on the grounds of product liability.
An overview. The following are considered producers:
The manufacturer:
- Of the final product
- From a part
- From a raw material
The namesake: the person who presents himself to the outside world as a producer by applying the following to the product:
- A name
- A mark
- Or other distinguishing mark
The importer: the person who imports the product into the EEA with the aim of further trading it professionally or commercially. It follows that importers who purchase their goods in other EU countries are not included within the scope of producer in the sense of product liability.
The supplier: only in those cases where the manufacturer, name giver and importer are not traceable. This category is a safety net to protect the injured party. After all, the injured party must always be able to go somewhere to recover the damage. However, the supplier's liability can also lapse, namely if he reveals the identity of the producer within a reasonable period (including the importer, name giver and manufacturer or the 'real' producer).
It follows from the above overview that multiple parties can be held liable simultaneously.
Awareness and action
If you as an entrepreneur know that you can be considered a producer, and therefore run a certain liability risk, you can take action and protect your company against this. Therefore, include a provision in the contracts that you conclude that clearly prescribes who in your mutual relationship must compensate for the damage if the product causes damage for which you are considered the producer.
Finally, the motto is to thoroughly investigate which risks your company can take and for which risks adequate insurance should be taken out.
For more information on this topic, please contact Lexsigma Attorneys.
Mr. drs. Bob van der Kamp
Mr. Ramon Pasma
Mr. Lara Smeets
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