Consumer Protection 375
Consumer Protection Act 1987
(a)Provisions of the Act
The Consumer Protection Act 1987 makes it an offence to sell goods that fall below the general safety requirement, that is that the goods are reasonably safe bearing in mind the manner in which and the purposes for which they are sold.
However, concerning the issue of product safety, its importance is that it allows anyone, whether the direct purchaser or not, who has suffered damage (death, injury or damage to personal property) as a result of a defective product to sue the producer, or importer direct. It establishes strict liability.
The victim is not required to prove negligence. He/she does naturally have to show causal connection, i.e. that the damage happened as a result of the defect.
Under either the 1987 Act or the Consumer Safety Act 1978 regulations have been made regarding:
Aerosols
Dangerous substances
Electrical appliances
Heating appliances
Articles in contact with food
Oil heaters
Children's furniture and
Toys, among many others.
In any case, with regard to food, there are also the Food Act 1984 and the Food and Environment Protection Act 1985. In these days of concern over "green" issues, there will be calls for even further control. It is already an offence under these Acts to sell food which is not of the nature, substance or quality demanded by the buyer. There are statutory controls over the sale of poisons, dangerous and toxic substances, explosives, petroleum products and medicinal products.
(b)Defences under the Consumer Protection Act
Although the claimant does not have to prove negligence against the supplier there are, nonetheless, some defences against liability available to the supplier. The one to which you should give most attention is the defence of "development risks", or "state of the art", as it is sometimes called.
Development Risks
The producer will not be liable if "the state of scientific and technical knowledge at the time when he put the product into circulation was not such as to enable the existence of the defect to be discovered". See Abouzaid v. Mothercare (UK) (2000).
Other Defences
The producer will not be liable if:
(i)He/she did not put the product into circulation
(ii)It is probable that the defect which caused the damage did not exist when the product was put into circulation
(iii)The product was not manufactured for sale
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(iv)The defect is due to compliance with mandatory regulations
(v)In the case of the manufacturer of a component, the defect is due to the design of the product.
Reduced Liability
The producer's liability may be reduced or disallowed when, having regard to all the circumstances, the damage is caused both by a defect and by the fault of the injured person or anyone for whom the injured person is responsible.
(c)Prices under the Consumer Protection Act
Under Section 20(1) it is an offence to give an indication which is misleading as to the price at which any goods, services, accommodation or facilities are available. Section 22(1) extends this very clearly to "any services or facilities whatever".
"Misleading" includes:
That the price is less than it actually is;
That it does not depend on certain facts when it in fact does;
That there is in fact an additional charge for something which appears to be covered by the basic price;
That there is suggested a future rise in prices which is not in fact going to happen;
A comparison with something which is then inaccurately described.
A Code of Practice under this part of the Act (Section 25) is intended to give practical guidance with regard to Section 20 requirements, and to promote desirable practices.
General Product Safety Regulations 1994
Implementing the European Union Directive on product safety, these Regulations have widened the scope of the general safety requirement of the Consumer Protection Act 1987.
The main points of the Regulations can be summarised as follows:
(a)Producers
Producers are required to place on the market for consumers' use only products which are safe. The term "producers" includes manufacturers, importers, own branders (e.g. ASDA Baked Beans), wholesalers, and "other professionals in the supply chain in so far as their activities may affect the safety properties of a product". This last category may cover designers, carriers, packers, and warehouse staff.
(b)Distributors
Distributors are required to ensure that they do not supply products which they know, or should have presumed, do not comply with the general safety requirement. "Distributor" is defined as "any professional in the supply chain whose activity does not affect the safety properties of a product". The scope of this definition is not clear, but businesses which simply pass products on to consumers and take no part in product safety control are governed by the Regulations.
(c)General Safety Requirement
The general safety requirement is now to be assessed in relation to the risk that a product presents to the health and safety of persons. Several factors are taken into account in the level of risk:
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The product's characteristics
Its effect on other products
Its labelling and instructions for use
The category of consumers at risk when the product is used
(d)Products
The term "product" is given a wider definition. Specifically, a product need not be sold, or supplied in exchange for another product, and may be new, used, or reconditioned. Excluded are second-hand products which are antiques, and products supplied for repair or reconditioning before use when it is made clear that such products are supplied solely on that basis.
(e)Monitoring of Safety
As regards monitoring the safety of products, the Regulations impose additional duties on producers and distributors. These entail the setting up of post-marketing surveillance departments and programmes for obtaining and disseminating information to consumers during the period of the product's use.
E. THE ROLE OF LOCAL GOVERNMENT
Enforcement of Consumer Protection Legislation
Responsibility for the enforcement of consumer protection legislation mainly rests with local authorities. As a general rule, consumer protection functions are performed by the principal Councils in England and Wales, the London Boroughs and Scottish Regional or Islands' Councils and the Area Trading Standards Offices of the Department of Economic Development in Northern Ireland.
The former Weights and Measures Departments are now generally called Trading Standards Departments or Consumer Protection Departments, and these Departments are responsible for the enforcement of most of the legislation, particularly the Weights and Measures Act 1985, the Trade Descriptions Act 1968, the criminal aspects of the Consumer Protection Act 1987 and the Consumer Credit Act 1974.
Much of the time of these Departments is devoted to supervisory activities such as statutory weighing and verification of weights and measuring apparatus, e.g. testing and stamping of petrol measuring instruments relating to retail sales or the submission of food items for public health analysis. Most Trading Standards Departments also have comprehensive programmes to advise businesses on how to comply with consumer protection legislation, as well as enforcing the law against those in business who blatantly contravene it.
It can be said that the UK is outstanding amongst the EU member states in delegating the enforcement of basic trading standards legislation to local authorities. The advantage of this is greater local accountability and sensitivity to the needs of a particular area than could be achieved through enforcement of nationwide legislation through divisional departments of central government. A disadvantage is the tendency toward uneven levels of enforcement of, and differing interpretations of, the legislation in different local authority jurisdictions. To combat this tendency, the Association of County Councils and the Association of Metropolitan Authorities agreed in 1976 to form a new co-ordinating body called the Local Authorities Co-ordinating Body on Trading Standards (LACOTS).
The principal functions of LACOTS are:
to co-ordinate operational practice of local authorities at the technical level and ensure uniform enforcement of legislation, including in particular legislation issued by the EU;
to provide co-ordinated machinery for Trading Standards Departments in the UK to liaise with central government and with industry on relevant technical issues; and
to advise local authorities on interpretation and enforcement of specific legislation.
Consumer Advice Centres
The functions of local authorities referred to above relate to the enforcement of consumer protection law. In addition, the Local Government Act 1972 and the Local Government (Scotland) Act 1973 enable local authorities to provide advisory services for the general public. Some 120 Consumer Advice Centres and 300 local price survey schemes existed in 1976, financed mainly by central government grants. These Centres sought to assist consumers to secure satisfaction from complaints against retailers and other suppliers of faulty goods or services. The price survey schemes supplied pre-shopping advice primarily on the premise of price comparisons. The Centres also supplied leaflets on matters affecting consumers generally.
A change of policy occurred after the 1979 change of government. Shortly after taking office, the Minister of State for Consumer Affairs announced that cash grants from central government for Consumer Advice Centres and price survey schemes were to terminate as from April 1980, thereby saving £3.5 million annually. Citizens' Advice Bureaux were to be the preferred vehicle for this type of service to the general public and financial support to them was doubled. Such Consumer Advice Centres as now exist are financed out of local authority revenue.
Trading Standards Departments also routinely engage Consumer Advisers who are not qualified trading standards officers but hold the Institute of Trading Standards' Diploma in Consumer Affairs (DCA) and specialise in advisory rather than enforcement work.
F.MANUFACTURERS AND PRODUCT LIABILITY UNDER THE LAW OF TORT
Despite changes in statute law, it is still necessary to consider these matters under the law of tort. If a person suffers injury, whether personal or economic, due to a defect in any article she buys, she will normally have a right of action for breach of contract against the supplier. If the defect is not in fact the fault of the supplier, he in turn has a right against his supplier, and so on, back to the manufacturer.
Two snags can arise. First, the manufacturer, or some intermediate party, may have inserted in the contract a valid disclaimer of liability. Second, the chain may in practice have broken because one party has ceased to exist, or is unable to settle any liability because of liquidation, bankruptcy or death.
So a claim in contract cannot always be relied upon to remedy a complaint. Furthermore, the person who is injured by the defective product may not have been the person who bought it. On account of the doctrine of privity of contract, that person has no claim in contract against the seller. This is where the law of tort comes in.
Principles of the Tort of Negligence
A tort is a civil wrong not arising out of a contract. Now a person who is injured or has suffered economic damage as a result of defective goods has suffered a civil wrong – a tort. Usually in such cases this will be as a result of "negligence" by someone or other.
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Negligence can be defined as:
"a breach of a duty of care owed by the defendant to the complainant which has caused damage to the complainant which was reasonably foreseeable and was not too remote".
All ingredients of the definition are necessary to found liability, but the only one we need to examine in this context is the question of a duty of care. If a person applies his/her mind to the matter before doing any act, he/she owes a duty of care to anyone who, it is reasonably foreseeable, is likely to suffer damage as a result of that act.
The question was examined by the House of Lords in the famous case of Donoghue v. Stevenson (1932). The modern law of negligence as it applies to manufacturers is largely based on this case.
What happened was that a person bought a bottle of ginger beer in a case for her friend. In those days, ginger beer was sold in opaque bottles. The friend opened the bottle and drank most of the contents. Only afterwards did she discover, in the residue, the decomposing remains of a snail. Not surprisingly, she became ill! The problem was that the claimant did not have a contract with the café proprietor, so no action for breach of contract was possible. The only redress was an action for the tort of negligence. The House of Lords held that as the ginger beer was sold in an opaque bottle, so that no intermediate examination was possible, the manufacturer owed a duty of care to any person who suffered injury as a result of drinking the contents.
In the intervening years, the principle in Donoghue v. Stevenson has been widely extended by the courts. The point that a manufacturer's liability for negligence is independent of contract, and is owed to the ultimate consumer, was endorsed in Lee Cooper Ltd v. C H Jeakins & Son Ltd (1967). Furthermore, a claimant who does have a contract with a manufacturer or supplier of faulty products has the option of suing for breach of contract or for negligence. This was brought out in Batty v. Metropolitan Property Realisations Ltd (1978).
That the possibility of intermediate examination of the goods is no longer a bar to effective action was established in Clay v. A J Crump & Sons Ltd (1964). An architect and a demolition contractor left a wall standing in a dangerous condition on a building site which was being cleared. Later, the managing director of the building contractors, who were to develop the site, inspected the wall, but failed to discover its dangerous condition. In due course the wall collapsed. It was held that although the building contractors were jointly liable, the architect and the demolition contractors were not relieved of their liability by reason of the examination by the builders.
Hence, a manufacturer now owes a duty of care to all consumers of his products. If it is reasonably foreseeable that injury or damage is likely to be occasioned by his carelessness, he will be liable for any lack of reasonable care. This liability was extended to users of the products, rather than merely consumers, by Grant v. Australian Knitting Mills Ltd (1936), where the claimant got dermatitis through wearing a garment which had not been properly washed during manufacture.
The Donoghue v. Stevenson principle applies not only to manufacturers and manufactured goods, but also to the following:
Containers and labelling of containers and goods (Kirbach v. Hollands (1937)).
Hire purchase transactions (Andrews v. Hopkinson (1957)).
Probably, free samples supplied by a manufacturer (Hawkins v. Coulsdon and Purley UDC (1954)).
Erectors and assemblers of articles or structures (Dutton v. Bognor Regis UDC (1972)); also, in Brown v. Cotterill (1934), a monumental mason was liable when a
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gravestone he had erected toppled over; and in Malfroot v. Noxal Ltd (1935) an assembler who negligently fitted a side car to a motor cycle was held liable when it came off.
Distributors – in Watson v. Buckley Osborne, Garret & Co. Ltd (1940) distributors of a hair dye advertised it as safe, without having made any tests. They were liable when a customer's hair was damaged.
Careless Statements Causing Damage
It is not only manufactured articles negligently made, or work negligently performed, which can found liability in tort. A person who makes a negligent statement can also cause damage to a consumer or, for that matter, any other person. Liability for careless statements where a duty of care is owed was established in Hedley Byrne & Co. Ltd v. Heller & Partners Ltd (1964). In that case, an advertising agency sought a credit reference for a new client from its bank. The agency's bank wrote to the client's bank, who replied with a favourable reference. It did, however, add a rider to the effect that the reference was given "without liability". On the strength of this reference, the agency extended credit. Shortly afterwards, the client company went into liquidation. The House of Lords held that the client's bank owed a duty of care to anyone who it was reasonably foreseeable would act on the strength of the reference. The bank was, however, saved from liability by reason of its disclaimer of liability.
The following rule was laid down by the House of Lords:
(a)A duty of care will be owed where a special relationship exists.
(b)The special relationship will arise where:
A person possessing special skill offers advice to another
That other person relies on the advice, and
It is reasonable for that advice to be relied on (i.e. the advisor must know, or ought to have known, that the advice would be relied on).
In Esso Petroleum Co. Ltd v. Mardon (1975) it was stated that a duty could arise where the advice was given outside the ordinary course of the advisor's business, provided that it was given in a "business context". It appears to be an accepted principle that there will be no liability for advice given on purely social occasions, but many social occasions can take on a business character, e.g. the round of golf with a major client, the business lunch, etc.
Limits
In general, for a person to be liable for the tort of negligence he/she must have been careless: that is, he/she must have been at fault. There are exceptions to this, and where liability is imposed without fault, it is called "strict liability". You need not concern yourself with this aspect of the law of tort, but very briefly it arises in two ways:
(a)At Common Law
Under what is called the rule in Rylands v. Fletcher, a person who brings on to his/her land something which is dangerous, and is not naturally there, is strictly liable if that thing escapes and causes damage. The classic example which occurred in Rylands
v.Fletcher (1868) was water escaping from an artificial reservoir. The principle has been extended to, e.g. fire, electricity, gas and explosives.
(b)By Statute
Certain statutes impose strict liability: for example, under the Health and Safety at Work Act 1974, a manufacturer is strictly liable for damage caused by moving
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machinery which is not properly guarded. People who operate nuclear plants and assemblies are strictly liable for the escape of radioactive material.
Apart, however, from strict liability, the law of tort imposes limits on the extent of liability for negligence. In the first place, the damage caused by a negligent act must be of a type which was reasonably foreseeable. In "The Wagon Mound" (No. 1) (1961) a vessel took on bunker oil in Sydney Harbour. Owing to the negligence of the crew, a quantity spilled in the water. The wind carried the resulting oil slick across a creek to a ship repair yard opposite. A welder happened to be working there on a ship under repair, and a spark from the welding operation fell on to some cotton waste floating on the water below. A serious fire resulted. It was held (by the Privy Council) that it was not reasonably foreseeable that a spark could ignite heavy fuel oil floating on the water. Hence, although the ship owners were liable for the foreseeable damage caused by oil fouling slipways, etc., they were not liable for the damage caused by fire.
However, if the type of damage is reasonably foreseeable, the negligent defendant will be liable for the full amount of the damage caused, even though the actual amount was not foreseeable.
Secondly, the standard of care that the law requires a manufacturer to exercise is not absolute. He/she is required to exercise only that care that a reasonably competent and proficient person carrying out the relevant work would exercise. The highest possible standard is not required.
384 Negotiable Instruments 1: Bills of Exchange
G. |
Release from Liability |
398 |
|
Cancellation of Endorsement |
398 |
|
Failure to Present Bill for Acceptance or Payment |
398 |
|
Holder Taking Qualified Acceptance |
398 |
|
Failure to Give Notice of Dishonour |
398 |
|
Renunciation of Rights by Holder |
399 |
|
Negotiation Back |
399 |
|
Endorsement "Sans Recours" |
399 |
|
Alteration of Bill |
399 |
|
|
|
H. |
Liability "Outside" the Bill |
399 |
|
|
|
I. |
Forgeries |
399 |
|
Effect of Forged Signature |
399 |
|
Fictitious Payee or Endorsee |
400 |
|
|
|
J. |
Dishonour of a Bill |
401 |
|
Requirements for Valid Presentment |
401 |
|
Excuses for Non-presentment for Payment |
402 |
|
Notice of Dishonour |
402 |
|
Where Notice Is Unnecessary |
403 |
|
|
|
K. |
Consequences of Dishonour |
403 |
|
Noting and Protesting |
403 |
|
Referee in Case of Need |
404 |
|
Measure of Damages |
405 |
|
|
|
L. |
Incomplete Bills and Alterations |
405 |
|
Incomplete (Inchoate) Bills |
405 |
|
Altered Bills |
405 |
|
Lost Bills |
406 |
|
Overdue Bills |
406 |
|
|
|
