April 08 Q8 – Product Liability

April 08 Q8 – Product Liability

The issue in this case is whether or not Vanguard Motors can be held liable for the injuries suffered by John while driving his VM 100 family saloon. A case such as this would usually be decided in contract law but in some instances can arise in tort law; usually where the injured party cannot pursue a claim in contract either because the product didn’t reach him via a contract of sale, or because the party next above him in the chain of contracts is bankrupt.

If we study the common law on this area, it really begins with the famous case of Donoghue v Stevenson where a majority of the House of Lords decided that liability could exist irrespective of contractual relationship or whether the product was ‘inherently dangerous’. Lord Atkin stated:

“a manufacturer of products, which he sells in such a form as to show 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 an injury to the consumer’s life or property, owes a duty to the consumer to take that reasonable care.”

The Irish High Court imposed similar liability on a manufacturer in Kirby v Burke & Holloway. Since both these cases the duty of care has extended to embrace all the various parties involved in the chain from manufacturer to the end-user. Courts apply basic principles of negligence simpliciter. Liability tends to attach now to the party who last had control of the condition of the products whether in its original or repaired state. In Power v Bedford Motor Co. & Harris Bros. Ltd. the first defendant was deemed liable to a subsequent purchaser of the car for negligent repair work, and the second defendant was liable to the extent that it should have detected the defect when it carried out pre-sale maintenance work on the car. In Keegan v Owens the supplier of carnival swing boats was held directly liable to the plaintiff for injuries to her hand caused by a wire nail attaching the boat to a steel bar.

Though one could be successfully in their action cases in tort for defective products were looked on as a last resort because of their lengthy process. The Liability for Defective Products Act, 1991 was enacted to implement Council Directive 85/374 on Products Liability. The directive responded to the perceived need to adopt a strict/no-fault liability regime across the EC. By Article 1 the

“…producer shall be liable for damage caused by a defect in his product.”

This was justified as being the best and fairest means of distributing the losses necessarily incidental to technological progress, and a means of protecting the weaker parties. Section 2 of the 1991 Act provides that the producer is liable in damages in tort for ‘damage’ caused wholly or partly by a defect in the ‘product’. Therefore it is strict liability. The statute states that the plaintiff must prove that the damage was caused by a defect in the product. In regards to the defect; a product is said to be defective where

“…it fails to provide the safety which a person is entitled to expect, taking all the circumstances into account.”

From the previous case law we can see that the courts may find Vanguard Motors liable for the injuries caused as they were the ‘producers’ of the defective ‘product’ i.e. the manufacturers of the defective vehicle. Vanguard Motors intended the car to reach the user in the form it was in when it left the production line, therefore Vanguard Motors owed a duty of care to anybody who purchased one of their cars. The defect was not caused after the car had left the production line it was caused at the design stages so even if the car was bought by John second-hand and had been looked at by a mechanic, Vanguard Motors are still fully liable for the injuries caused.

Another issue in this case is the fact that when Vanguard Motors discovered the defect they failed to inform the owners of the VM 100 of their discovery, not even warning John who previously encountered this ‘very rare condition’ which causes the lead to fail. A similar case to this, but not in this jurisdiction, took place in the US in Grimshaw v Ford which involved a defect in the design of the Ford Pinto. The defect caused the death of a mother, Lilly Gray, and serious injuries to a 13yr old passenger, Richard Grimshaw. While driving the car was rear ended which caused the doors to lock trapping the two inside and the cars petrol tank ignited. In the tests that were performed on the car this problem was discovered but not dealt with as a result of trying to save money and weight. Ford did a cost/benefit analysis on a recall of all the defective models and what it would cost for the probable number of court cases arising from accidents caused by the defective model. Even though they worked out that to fix the defects it would cost $11 per car and could potentially save 180 deaths from burning and 180 serious burn injuries they decided against the any production changes thinking it would be more profitable to deal with the court cases. This cost/benefit analysis did not sit well with the courts and Ford were ordered to recall all defective models. In this jurisdiction just as in others manufacturers are under a duty to warn consumers of all possible dangers. Irish cases relevant to this point are Cassels v Marks & Spencers and also Rodgers v Adams where the adequacy of the warnings, regarding flammability, on items of clothing was discussed.

In regards to Vanguard Motors case a recall should have taken place despite the problems with the lack of supply of the required higher rated lead which would remedy the problem. Warnings of the potential dangers should have been issued to the car owners. Vanguard Motors owed a duty of care to anybody who purchased their cars, so once they discovered that there was a defect they owed a duty to the purchasers to inform them of the defect and remedy the problem. In Ford’s case the cost/benefit analysis, putting a price on life, shocked most people including the jury but in fact this kind of economic test goes on in every day life in numerous amounts of ways, in different business sectors. In Vanguard’s case the fact that the VM 100 was a ‘popular…family saloon, which has, since it’s introduction 18 months ago, held the number one sales slot.’ may shock people as it brings in the fact that there are children and parents lives at risk due to this defect which Vanguard Motors chose to conceal.

There are however six defences set out in Section 6 of the 1991 Act which if successfully invoked act as a full bar to liability. One of these is known as the ‘development risks’ defence which is outlined under section 6 (e) and argues that the state of scientific & technical knowledge at the time was not such as to enable the defect to be discovered. This was considered in EC Commission v UK where the ECJ ruled that ‘state of knowledge’ refers primarily to scientific knowledge at the time, and not just to established practices within industry. It may be a long shot but could apply to knowledge at the time the cars were designed.

Looking at this particular problem Vanguard motors may have a defence in the argument that there were secondary causal issues which may have potentially caused the accident. One must look at the road conditions, the speed John was doing at the time, was his recklessness the cause of the accident. Should he have been more careful in icy conditions? The courts may in fact find John partially responsible. The statute states that the onus is on the plaintiff to prove that the defect caused the damage.

Discuss the changes the Defamation Act, 2009 will introduce.

Discuss the changes the Defamation Act, 2009 will introduce.

To begin one must understand what the tort of defamation actually is. It mainly concerns the publication to a third party, without lawful justification, of a false statement defamatory of the plaintiff. The wider context of this area of the law concerns such issues as:

• conflicting rights; free speech/freedom of expression versus one’s reputation/good name,
• right to privacy,
• Constitutional dimension; Article 40.3, Article 40.6.1.i,
• European Convention of Human Rights (ECHR); Article 8, Article 10
• ECHR Act 2003

The previous Defamation Act, 1961, split defamation into two distinct categories; the tort of libel and the tort of slander. The tort of libel was defamation in written and permanent form and the tort of slander was defamation in transient form or something that was said. The principle difference between the two is that libel was actionable per se, so the plaintiff didn’t have to show that specific harm occurred as a result of the defamatory allegation, harm to the plaintiff’s reputation is assumed once the defamatory nature of the defendant’s conduct is established.  However, only some types of slander were actionable per se. This distinction has now been abolished and it is now just the tort of defamation and all types of defamation are actionable per se. It is now considered a civil wrong where it is not possible to prove special damages. Previously time limits for slander and libel actions were three and six years respectively, this has now been changed to one year but may be extended in the interests of justice.

Winfield and Jolowicz define defamation as:

“…the publication of a statement which reflects on a persons reputation and tends to lower him in the estimation of the right thinking members of society generally or tends to make them shun or avoid him.”

Section 11 of the new Act also introduces a single publication rule where previously there was a multiple publication rule. This meant that each person that repeats a publication is responsible for the additional publication and each publication gave rise to a fresh cause of action. This rule was outdated and was very harsh on internet service providers (ISP) because each time an article was downloaded from the internet, the limitation period would restart. With the new Act a person has only one cause of action over a multiple publication. Examples of the old rule being used can be seen in Godfrey v Demon Internet and also in Berry v Irish Times. The latter case involved the defendants being sued for reproducing a photograph of a placard containing a false statement alleging that the plaintiff assisted in the imprisoning of republican prisoners.

Another important case in Ireland was Barrett v Independent Newspapers, where the newspaper published an account of an incident which allegedly took place outside Leinster House where the plaintiff, who was a member of Dáil Eireann, had supposedly been involved. It was claimed that the plaintiff pulled at another’s beard and said “you thought you’d dance on his grave”. The Judge directed the jury that as a matter of law the words were defamatory of the plaintiff. The jury subsequently awarded the plaintiff £65,000. The defendants appealed to the Supreme Court where it was held that the trial judge usurped the function of the jury and that the damages awarded were excessive, a retrial was ordered. In the High Court there is a judge and jury in defamation cases. It is for the judge to determine as a matter of law, whether the words or statement complained of are capable of bearing a defamatory meaning. It is for the jury to determine whether the words are in fact defamatory of the plaintiff and if they are to determine damages. Another change introduced by the new Act is that Judges must now give directions to the jury on damages, and the parties may make submissions on the topic. The Supreme Court is empowered to substitute its own damages figure on appeal, rather than - as can been seen in the previous case – putting the parties to the cost and hazard of a retrial.

In 1991, the Mohan Report was released which outlined the problems with the 1961 Act and suggested changes that should be made. Most of these changes have been introduced by the 2009 Act. It suggested that provision should be made to enable judges sitting alone to determine as a preliminary issue, whether a matter complained of is reasonably capable of carrying the imputation pleaded by the plaintiff. And if it is, whether that imputation is reasonably capable of bearing a defamatory meaning.

In Ireland before the new Act was introduced it was not possible to defame the dead. The Mohan report suggested that a cause of defamation should survive the death of a defamer or alleged victim after publication. In the past any cause of action in defamation died with the plaintiff’s death. Section 39/ 3 outlines changes to this rule:

“On the death of a person…a cause of action subsisting against him shall survive against his estate.”

This section goes on to discuss damages in a situation such as this:

“Damages shall not include general damages, punitive damages or aggravated damages.”

Previously, under the statute of limitations, there was a limit of three years for slander, from the date when the cause of action accrues and libel was six years. This has now been changed to one year but may be extended if the courts see fit as the Mohan report suggested.

There were a number of very important cases that had significant implications/proposals to the reformed Irish Defamation law. One of the most famous cases in this area of the law was known as the McLibel case or McDonalds v Green Peace activists. This case involved “What’s wrong with McDonalds?” leaflets, that the Green Peace activists distributed, which McDonalds claimed defamed their reputation. This case went to the ECtHR. ECHR were infringed; some felt it was unfair for a number of reasons:

• There was a radical imbalance between the parties,
• There was no legal aid for the activists,
• Presumption that leaflets were false,
• McDonalds didn’t have to prove damage to their reputation

They held that the absence of legal aid for the defendants was a breach of the fair trial procedure. However, this decision did not establish that there is an automatic right to legal aid. Although the reasoning would seem to require legal aid for an individual against a corporate defendant. The new Act does not introduce legal aid for defendants in defamation cases; this has been criticized by many.

Another important recent case which also went to the ECHR was the Irish De Rossa case. At issue was the Supreme Court's decision in 1997 of the de Rossa -v- Independent Newspapers libel action in which that Court upheld the jury award of IR£300,000 to Mr. de Rossa, the former leader of Democratic Left and now an MEP. It was the highest ever award handed down in a libel case in Ireland. However, the case in the European Court of Human Rights was not limited to the facts of the de Rossa case. There is no detailed guidance from the trial judge in relation to determining the size of the awards. This can often lead to erratic awards which leaves the press in a vulnerable position. Independent Newspapers argued in the ECtHR that this ultimately restricts the media’s right to freedom of expression under Article 10 (freedom of speech and expression) ECHR and hinders the publication of matters of public importance. Most significant of all to the present case was that the ECtHR had itself handed down a judgment in 1995, Tolstoy Miloslavsky v the UK, in which it was found that the award of STG£1.5m for libel infringed Article 10 of the ECHR. That case involved libels accusing Lord Aldington of involvement in war crimes against Cossack and Yogoslav prisoners-of-war at the end of the Second World War. The ECtHR decided that such a large award was not proportionate to the legitimate aim of protecting a reputation. Central to the case was the difference between the standards of appellate review in Ireland and the UK. However, one would question whether this distinction is illusory. The Supreme Court in the de Rossa cased based their standard of review on an English precedent - the very precedent that was condemned by the ECtHR in the Tolstoy decision. The new Act now introduces changes to this as the judge must offer guidance on the damages that should be awarded. Another thing the new Act introduces is a code of practice introduced by the Press Council of Ireland (PCI). This code covers accuracy, fairness and privacy. There is now a press ombudsman who will deal with complaints which they claim will be “fast, free and fair”. While he cannot award compensation or costs, he can force a newspaper or magazine to publish his determination. He cannot act on a complaint if legal proceedings are threatened or commence. It may solve problems without having to result in long and costly court proceedings.

As regards defences available in the tort of defamation, there have been a number of changes introduced in the new Act. The defence previously known as ‘Justification’ is now renamed ‘Defence of the truth’. This is when the defendant can establish the truth of the allegations made concerning the plaintiff, then it is a complete defence. The defence of the truth will not fail if the defendant doesn’t prove the truth of all the allegations, if the words not proved to be true do not materially injure the plaintiff having regard to the truth of the remaining allegations. This was the case in Murphy v Times when the defendant printed a story about the IRA leader, described as “Slab Murphy”. The Supreme Court rejected the appeal and held that even though an allegation that the plaintiff was a leader could not be sustained, if the defendant could prove that the plaintiff was a prominent member of the IRA then a defence under Section 22 of the 1961 Act could be available.

In a defamation action once the plaintiff alleges that a statement published by the defendant is defamatory, then the onus ids on the defendant to establish the truth of the statement, so the law presumes that the statement is false. This rule has not been changed by the new Act which has been criticised for not doing so. The ECHR gave their view on the matter in the McLibel case:

“In a complex case where the defendant other imbalances, the extra burden imposed by this presumption of falsity can infringe the freedom of expression provisions of the convention.”

What the new act has introduced, however, is that affidavits must be sworn by both parties, verifying any assertions or allegations of fact in a pleading. There are criminal penalties if the affidavits are false or misleading, and the parties may be cross examined on their affidavits. This is likely to introduce greater caution on both sides.

The previously titled defence of ‘Fair comment on matters of public interest’ is now called the defence of honest opinion. It is very similar in that it requires the statement to be a comment or opinion and not fact, however, the requirement in Section 20(2) that the defendant must prove he believed in the truth of the opinion at the time seems to be more restrictive than the common law and will mean that the author will most likely have to be called if the plea is to succeed. McMahon & Binchy previously outlined the steps to establish this defence; it seems now that these steps will have to be proved:                                                                                                                                                                                                                                                                                                                                                      

·         The comment was made in a matter of public interest,

·         What was said was comment as opposed to fact,

·         The comment was fair in the sense of being honest.

This defence is lost where the alleged defamatory material imputes corrupt or dishonourable motives on the plaintiff’s part. In the case of Albert Reynolds v Times Newspapers, Lord Nicholls stated that:

“The time had come to recognise that the epithet “fair” is now misleading and meaningless. Thus the true test is whether the opinion, however exaggerated, obstinate or prejudicial was honestly held.”

 If the plaintiff proves that the author was actuated by malice, then the defence fails and nominal damages awarded.

Another defence available is known as the defence of privilege. This is split up into two categories: absolute/parliamentary privilege and qualified privilege. The former concerns statements made in the course of court proceedings and contemporaneous reporting of court proceedings. The 2009 Act has placed absolute privilege on a comprehensive statutory footing and the act expands on the common law by listing an extensive, but not exhaustive, set of statements to which the privilege applies. Qualified privilege is when a misstatement of fact may be protected. Lord Atkinson gave a definition of a privileged occasion in the case of Adam v Ward:

“…person who makes a communication has an interest or duty to make it...and the person to whom it is made has a corresponding interest or duty to receive it.”

The law is flexible in the application of this defence and there can be no complete or closed list of privileged occasions, as per Lord Nicholls who provided a non-exhaustive list of factors relevant to determine the existence of a sufficient duty or interest. The main factors were:

·         Seriousness of the allegation

·         Nature of the information

·         Steps taken to verify the information

·         The source of the information

·         The timing of the article

·         Tone of the article

·         Comment sought from defendant

·         Gist of the plaintiff’s side of the story told?

·         Urgency of the matter etc.

It is for the judge to decide whether the statement is privileged or not. Again the defence is lost if the plaintiff cam establish as a matter of probability that the defendant was motivated by malice.

As a result of the New York Times v Sullivan case there is a more general qualified privilege for the media in discussing public figures in the US. In Australia and New Zealand there are specific protections for political speech, in England the Court of Appeal tried to introduce something similar in the Reynolds case, which would determine whether political expression was deserving of protection but the House of Lords rejected it but did expand the test. The Mohan report suggested the introduction of a statutory defence of reasonable publication, which is now enshrined in Section 26. This is very like but not identical to, the already discussed defence of qualified privilege established in the Reynolds case. However, the defence does not give the press, free reign to do whatever they want or ‘carte blanche’. Its actions will be closely scrutinised to see if they meet the stringent criteria. O’Caoimh J adopted this in the case of Hunter v Duckworth, as he was persuaded by the flexible approach of Lord Nicholls, particularly as it is not confined to political speech. The common law in this area is heavily influenced by the ECHR and is both fluid and fast moving. The Reynolds defence has been somewhat liberalised in Britain throughout subsequent decisions bringing the law there closer to the freedom enjoyed by the US media when publishing allegations about public figures. There is a real danger that the codification of this defence will strangle the flexibility necessary to keep the defence in line with the requirements of the ECHR.

Another big change with the 2009 Act is a procedural one. It concerns the defendants; like their counterparts in all other tort actions, they will be able to make a lodgement without an admission of liability. While not a defence, Section 22 establishes a potentially useful weapon in a defendant’s armoury – the offer to make amends. Where a defendant has published an allegedly defamatory statement, it can offer to publish a correction and apology and pay compensation and costs. In Britain, making such an offer leads to discount in any damages that may be awarded at trial – as much as 50%. However, if a defendant makes such an offer, no other defence may be pleaded. An apology does not amount to an admission of liability and is not relevant to the determination of liability. Despite this statutory disclaimer, it will remain difficult for a jury not to view an apology as an admission of some form of (compensation) wrongdoing.

The 2009 Act introduces some vital changes and may improve some areas of the tort of defamation; however, it ducks some important reforms and bungles others, while some of its most significant provisions raise constitutional problems. Eoin O’Dell, who is a lecturer in Trinity College Dublin, gave his views in a report in the Irish Times. He points out that the new Act fails to account for ISPs or to rebalance the burden of proof from the defendant to the plaintiff.

Also the centrepiece defence of fair and reasonable publication is unworkably narrow; this defence applies where a statement was published in good faith, on a subject of public interest, the discussion of which was for the public benefit, provided that it was fair and reasonable to publish the statement, and that the manner and extent of publication of the statement did not exceed that which was reasonably sufficient. As if that’s not enough, the Act goes on to set out ten factors that may be taken into account in determining whether it was fair and reasonable to publish the statement. All in all, there are so many conditions that it is very unlikely that the defence could ever be successful.

The Act makes no change to the rule against legal aid for defamation cases. It accepts the rule that once a plaintiff alleges that a statement is defamatory, the law presumes that the statement is false. Although affidavits have been introduced to try and balance this problem. The Act reaffirms the rule that companies can maintain defamation actions without having to prove that their reputations have actually been damaged. These last three points were questioned by the ECtHR in the McLibel case. In cases of similar radical imbalance and for similar reasons, not only would the Irish versions of these three rules be incompatible with the convention, but they could also be contrary to the constitution.

This area of the law has been in the limelight quite often recently with the introduction of the new Act and also the drama around the resignation of the former Minister for Defence, Mr. Willie O’Dea. This involved the minister making a defamatory statement to a reporter about Maurice Quinlivan, who was a candidate in the local elections and also a brother of former IRA member Nessan Quinlivan. The comments referred to a story of how a brothel was being run from a house that Nessan Quinlivan had owned and claimed he had no knowledge of. Mr. O’Dea accused Maurice Quinlivan of being involved in the brothel which was untrue. Mr. O’Dea swore an affidavit saying that he may have asked “is the brothel still closed?” but denied accusing him of being an owner or part owner. Later the reporter released a transcript of the recorded interview which clearly showed that in fact he had made such allegations. It was clear at this point that Willie O’Dea would not succeed in the defamation case which was being brought against him by Mr. Quinlivan. The matter was concluded on December 21st 2009 without going to hearing. The Minister accepted he had defamed Quinlivan and paid damages and costs to the Sinn Féin councillor. He subsequently resigned as Minister claiming that he did not wish to distract from the work of his party.

Law of Tort April 09 – Q5 Pure Economic Loss

Law of Tort April 09 – Q5 Pure Economic Loss

The issue here is that Carrie may be liable for a claim, by National Discounters, for pure economic loss. If she is found to be liable she will have to pay part or all of the loss Incurred by National Discounters as a result of the fire.

In Ireland restrictive rules on recovery of pure economic loss have traditionally been justified by the common law judges in terms of the floodgates fear of exposing a D to potentially indeterminate liability. An English example of this was in the case of Cattle v Stockton Waterworks Co. (1875). The defendant, a waterworks company, laid pipes under the claimant’s land.  Some time later the claimant sought to have a tunnel built through his land only to discover that the pipes laid were leaking causing delay to construction and making it more costly.  It was held that the claimant’s could not recover for their loss because the loss was too indeterminate and remote. Another objection is that contract law is a more appropriate forum for determination of recovery for pure economic loss. The UK case of D & F Estates Ltd. v Church Commissioners for England [1989] illustrates this point. On moving into a flat the P’s discovered that the plaster work was defective. They sued the D’s for the cost of the remedial work among other issues. One of the issues argued before the HOL was whether the loss sustained by the first P in renewing the plaster work was recoverable as damages in tort. P’s claim was that the plaster itself was defective and not that the defective plaster had caused damage to other property of the P or had caused personal injury, the claim, therefore, was for pure economic loss. Lord Bridge concluded that the damages in tort do not generally extend to the cost of repairing the defective product itself. Damages were recoverable in tort where the defective product caused personal injury or damaged other property of the P, but damages were not recoverable in compensate for correction of the defect in the product itself. That would be a contract law issue. Expanding recovery in tort for this type of loss would be to undermine the fundamental principles of contract law. Although Irish courts have had recourse to the contract argument, in Kennedy v Allied Irish Bank Plc [1998], as a general rule the Irish courts are not opposed to a blanket restriction on recovery for pure economic loss on this basis. This was confirmed in Glencar [2001] but was previously recognised by the Irish courts in Ward v McMaster [1987], for failure to arrange an inspection of property, and also in Siney [1980] for failure to provide a habitable house. In the Kennedy case the SC held that where the relationship between the parties is contractual, the duty of care expected is that which is appropriate to the performance of the contractual obligations. However, where in a contractual relationship, tortious obligations arise, these can not be greater than those found, expressly or by necessary implication, in the contract.

As in Glencar the loss must have been reasonably foreseeable, there must have been a duty of care owed; neighbourhood principle and it must be fair, just and reasonable. If we apply the Glencar test to this particular case we can see that Carrie owes National Discounters a duty of care not to affect their business. It can be reasonably foreseen that carelessness in a fast food outlet may lead to a fire, furthermore, if a fire was started in a shopping centre, it would be reasonably foreseen that it may cause fire to the surrounding units. Therefore Carrie would be liable for the damage caused by the heat to the paint work. However, it would be very difficult and I believe unreasonable and unjust to say that it was reasonably foreseeable that a fire would cause the whole shopping centre to close down on its busiest two days of the year. I believe this is too remote as in the Cattle v Stockton Waterworks Co. case. Ultimately it would be up to the court to decide whether this was reasonably foreseeable. There may be some stipulation in the contract Carrie has with the National Discounters and this matter may be better resolved in a contract law action as pointed out in the case of Kennedy v Allied Irish Bank Plc.

Another issue that should be looked at is the actual cause of the fire. How did it happen, who was careless/negligent, who should be liable. This may bring up the issue of vicarious liability which is:

“…legal responsibility imposed on an employer, although he is himself free from blame, for a tort committed by his employee in the course of his employment.”

as per Lord Steyn in Lister v Hesley Hall [2002].

Conclude