Product Liability Law in Transition

A Central European Perspective

Magdalena Tulibacka

• Publisher: Routledge
• Year: 2016
• Print ISBN: 9780754647102
• eBook ISBN: 9781317075394
• Topic: Law
• Subtopic: Jurisprudence
• Index: Law

This volume examines the evolution of Central European product liability systems, with particular reference to the effect of the implementation of the Product Liability Directive in the context of the recent enlargement of the EU. This book also provides a comparison of how product liability law has evolved in the socialist states, comparing it to developments taking place in the West. Using product liability law, this study offers a valuable insight into the necessary features and requirements of the harmonization of laws between the EU and post-socialist Europe. Predominantly legal in scope, it also takes account of the importance of extra-legal elements in law reform. As such, this book will be a valuable resource for those interested in European Law, as well as those working in the area of Consumer and Product Liability law.

Chapter 1
Introduction

The dynamics of developments in Central European¹ laws, markets and societies are extraordinary. Product liability illustrates them particularly strongly. This initially judge-made area of law, which constituted a response to transformations within contemporary markets, ties together the political, the legal and the socioeconomic. As part of ‘the laws of the market’, although originating in the rules and philosophy of civil liability, it has specific roles, aims and effects. With the use of risk-benefit analysis or social/consumer expectations tests it apportions product risks, compensates damage, and also shapes market behaviour. The book focuses on the process of evolution of product liability (odpovědnost za výrobek, termékfelelõsség, odpowiedzialność za product) systems in the Czech Republic, Hungary and Poland. It observes changes within substantive law, developments in court judgements, and doctrinal writings following or sometimes anticipating these developments. However, it also reaches beyond this doctrinal view of product liability law into other legal and non-legal domains, presenting a more contextual inquest into the topic. Particular focus is on effects of the shift from socialism and centrally planned economy to democracy and free market economy. This shift encouraged a very dynamic evolution within the Central European product liability systems. It is shown that the process of transformation of these systems is a multi-disciplinary, multi-level, multi-layer, comprehensive process of change triggered by voluntary convergence with the ‘West’ (consequence of political and socio-economic changes described here) and further enforced by the obligations of the membership of the European Union. With regard to the latter, the book also illustrates the impact of the Product Liability Directive² (which the Central European states implemented). It concludes that, although constituting a crucial milestone for the Central European product liability systems, the implementation of the Directive did not result in a dramatic alteration of the pre-existing position. Nevertheless, ultimately the enquiry sheds some light on the implications of changes taking place in Central Europe for the harmonized European product liability system governed by the Directive.

The legal systems of Central Europe remain in a stage of transition. Although there is no doubt as to their political, legal and socio-economic identity, and links with other Western European civil law systems, the book refers to them as ‘post-socialist’ in order to reflect the nature and origin of transformations which they are undergoing. The ‘transition’ referred to in the title of the book consists in the process of return to the civil law roots,³ return to democracies and free market economies, accession to the European Union, adoption of new consumer protection policies and laws, and establishment of new regulatory and institutional frameworks able to withstand the challenges posed by these developments. The full understanding of the transition requires a comprehensive, interdisciplinary analysis. Such an analysis is impossible in a single monograph, but this book introduces and maps out certain crucial issues. It illustrates the fate of a complex legal mechanism in this transitional turmoil. Product liability can be presented in various contextual arrangements, and the main arrangements are assessed. The analysis focuses on the links of product liability with markets and market laws, and in particular with consumer protection laws. The value of the book, therefore, is on the one hand in the presentation of the development of law and practice of product liability in this often misunderstood region of Europe, and on the other hand in providing a map and some analysis of contextual issues which affect the development of this area of law.

As Central European legal systems started taking part in the process of building the European Union legal system, the transition they are undergoing has gained much wider implications. Product liability law and its practice are excellent examples of the depth of these implications. Although the Product Liability Directive has been implemented as part of the acquis communautaire⁴ before the countries joined the European Union, the nature and legal force of this legal instrument entail the continuing importance of national laws, practices and legal cultures – thus the continuing importance of the state of transition in Central Europe. Essentially, the ‘European product liability law’ is the law applied by national courts, and it is argued that such law is the product of these various influences.

In a wider perspective, using product liability law the book offers some insight into the necessary features and requirements of the wider process of legal harmonization between the European Union and the post-socialist Europe. Furthermore, product liability can be seen as the trendsetter within the philosophy and practice of civil liability more universally. Thus, the book may be of some value in presenting the patterns of development within civil liability in the newly enlarged European Union. In the face of the efforts to harmonize European contract and tort laws in general, the process of harmonizing European product liability laws can demonstrate the challenges which lie ahead.

THE STARTING POINT – ADDRESSING THE SPECIFICITY OF CENTRAL EUROPEAN PRODUCT LIABILITY LAW

One encounters a surprising phenomenon when starting the enquiry into the topic: it is surprising because one expects an area of Central European law which developed during the times of socialism, especially an area as complex and as ‘market-focused’ as product liability, to be very different from the law of the ‘West’. In fact, the general tendencies in the development of product liability systems in Central Europe were similar to the tendencies which could be observed earlier in the United States of America and in Western Europe. Lack of written provisions concerning product liability was accompanied by attempts of courts to deal with cases of damages caused by defective products. Contractual liability in many respects gave way to tortious liability, the standards of which became more objective, even strict. However, a different picture transpires upon a closer look at the manner and the context in which the product liability systems functioned. At this point one sees noteworthy peculiarities in Central Europe. In fact, regardless of the recent developments – the end of socialism, implementation of the Product Liability Directive, and accession to the European Union (in this exact chronological order) – Central European law of product liability still retains certain idiosyncrasies.⁵ The book describes these idiosyncrasies and traces their roots.

The analysis of Central European product liability law is placed within the wider framework of these legal systems in general – as conceptually, historically and politically independent legal units exhibiting quite distinctive features. These features lie at the roots of the idiosyncrasies of Central European product liability law, but other reasons for them should be sought in the essence of the product liability law itself.

THE NATURE OF PRODUCT LIABILITY

Various elements of political, legal and socio-economic nature interact in affecting the way product liability law is shaped, the roles it is supposed to play, and the way it operates in practice. History has shown that a number of developments are necessary for a product liability system to emerge. With a large dosage of simplification one may offer the following exegesis. Certain elements of market economy – a market equipped with mechanisms allowing competition between businesses, and the resulting strive for technological progress – are required. This on the one hand strengthens the position of consumers by giving them a greater choice of products, but on the other presents problems for them because of growing powers of businesses and dangers inherent in products. While competition in the market is capable of securing certain standards of conduct and standards of quality and safety of products, such pressures are not always sufficient to safeguard the interests of those who come in contact with those products. Emerging market policies (also involving regulatory market intervention) are additionally supported by the pressures of the legal profession, academics, as well as consumers. State intervention in markets may translate itself into various types of output, of which product liability law is an example.⁶ Product liability is meant to provide compensation for those who have been injured or who suffered losses as a result of coming in contact with defective products (Howells 2005b: 202). Based on ideas of fairness it is said to place the burden of compensating on those who caused the damage (following Aristotle’s ideas of corrective justice). On the other hand, according to economic analyses it is supposed to realize other postulates: such as the one of risk allocation in the hands of the cheapest cost avoider (Calabresi’s strict liability theory and Posner’s arguments for negligence liability) (Stapleton 1994).⁷ The legal basis and the conceptual framework of product liability law differ depending upon the strength and political context of the developments described above in a particular country. The prevailing factor in building the foundations and determining the scope of product liability law has, however, always been consumer protection.

Normally product liability law accompanies a whole array of other laws protecting consumers. What the contents of these laws are and how they balance the interests of consumers and businesses depends upon the shape and the perception of the market within a particular legal system: how strong the businesses are, how strong and free the competition between them is, what the position of consumers is, why in the mind of those shaping and applying the law they should be protected, from what dangers, and to what extent. Consumer law can take a form of various measures of private law: substantive rules of contract and tort on the one hand and the rules of civil procedure on the other; public regulation: quality and safety standards, regulating professions, informational duties of traders; as well as self-regulation mechanisms or codes of practice (Howells and Weatherill 2005: 9–76). Product liability law is a private law measure contained within the laws of contract and, more so, tort. It is to perform very specific functions and thus has been endowed with specific features, but its operation and development are linked to other laws aimed at protecting consumers and indeed to other laws regulating markets.

The phenomena described above have had a crucial impact, which this book explores, on the development of product liability in Central Europe. Recently, a further factor – the ‘European product liability law’ – has also become material in shaping Central European product liability law.

A FURTHER TIER OF ANALYSIS – THE ‘EUROPEAN PRODUCT LIABILITY LAW’

The picture of product liability law within Europe, including Central Europe, becomes much more complex when one takes into account the influences of the European Community law.⁸ The relationship between national product liability law and the ‘European product liability law’ is one of mutual interaction and interdependence. The European Community is determined to harmonize the product liability laws of its Member States, and the Product Liability Directive set out the framework for this harmonized system. Again, here the link of product laws with markets triggered the need for a legislative intervention. However, it also entailed very specific problems in achieving the appropriate balance between consumer interests and business interests. In the European ‘internal market’,⁹ consumers and businesses are encouraged to buy or offer products across the European Union, beyond their home state.¹⁰ Differences in national laws concerning such fundamental issues as product liability may constitute a challenge for consumers as well as a burden on businesses.¹¹ Yet, in spite of the very clear presence of the Product Liability Directive aiming to reconcile these differences, harmonization of product liability law within the European Union is far from complete (Sengayen 2007).¹² The European Commission Reports, the Lovells and Fondazione Rosselli Reports, the recent jurisprudence of the European Court of Justice, and jurisprudence of some Member State courts, all mentioned in the book, indicate elements of the complex picture of the ‘European product liability law’. The Product Liability Directive is an example of a fragmented, selective harmonization mechanism (von Bar and Drobnig 2002: 42). The Directive completely harmonizes the issues which it covers,¹³ while retaining links with national general civil liability rules which have not been harmonized, and allowing for a continuing application of “the rules of contractual and non-contractual liability or a special liability system” which operated when it was notified.¹⁴ Among the Member States of the European Union, significant divergences are clearly noticeable in those pre-existing general and specific liability rules, and even in the interpretation and application of the harmonized rules. Crucial elements of the product liability system which the Directive established but did not clearly define continue to leave scope for differing interpretation by the national legislatures and courts. The manner in which the Directive is enforced and interpreted throughout the European Union is essentially based on cooperation between the European Court of Justice and national legislatures and, more importantly, national courts.¹⁵ The essence of product liability law introduced above entails that the law of each Member State of the European Union retains the influences of national laws of obligations, other areas of consumer and market law, and other related legal and non-legal phenomena (such as civil procedures, judicial practice, legal cultures, the shape of private insurance markets, the generosity of social insurance or the shape of health systems). The transition taking place in Central Europe reaches into all these phenomena – and thus this transition has now also become an element of the ‘European product liability law’.

THE SCOPE OF ENQUIRY

The law of product liabi...

Table of contents

• Cover Page
• Title Page
• Copyright Page
• Contents
• Acknowledgements
• List of Abbreviations
• 1 Introduction
• PART I: SETTING THE SCENE: PRODUCT LIABILITY LAW ‘IN TRANSITION’
• PART II: PRODUCT LIABILITY SYSTEMS IN CENTRAL EUROPE – DOMESTIC CONTRACT AND TORT LAW, IMPLEMENTATION OF THE PRODUCT LIABILITY DIRECTIVE
• 7 Central European Product Liability Law in Transition – Conclusions and Prognosis
• Bibliography
• Index