The two Danish consumers claimed compensation from a retailer for personal injury caused by the salmonella contaminated eggs. Directive 85/374/EEC provides for strict liability of the producer for any loss and damage caused by a defect in the goods put into circulation by the producer. The Danish law implementing the directive provided, however, that any intermediary, such as a retailer, could also be liable in lieu of a producer. The purpose of this interpretation was to secure consumer protection so that consumers could always go to the point of purchase with a Product liability claim just as with any other problem concerning the product.
The issue was whether the retailer could be strictly liable pursuant to the directive implemented via the laws, regulations and administrative provisions of the EU member states concerning liability for defective products. There was an assumption that it was probably not the case, since a similar French national rule had previously been rejected by judgement (C52/00).
In the Danish case (c-402/03 Skov Æg v. Bilka), the EU-Court delivered a judgement stating that that on the basis of Directive 85/374/EEC on product liability, the retailer cannot be held directly liable in lieu of the producer. As the result, the Danish product liability legislation was amended to comply with the judgement. According to the new legislation an intermediary can, however, in exceptional cases be held liable in lieu of a producer for damage or injury caused by a product for example in cases where the producer or intermediary has acted negligently or the producer is located outside the EU area. In the latter case, the intermediary is considered the producer. These rules do, however, concern only personal injuries and consumer goods. The national rules still apply for commercial goods.
The Norwegian perspective
If the Danish egg case had taken place in Norway, according to the Norwegian product liability law (“Produktansvarsloven” paragraph 2-1), the producer would have been held responsible for the damage regardless of negligence. In Norway, direct actions can be taken against a retailer or another intermediary only when the retailer or intermediary has put his seal or mark on the product (§ 1-3 b), the producer is unknown and the retailer does not tell who the producer is within a reasonable time (§ 1-3 b) or the retailer has imported the product from outside the EU (§ 1-3 E).
According to ordinary Norwegian tort-law a consumer can make a direct claim also, if the producer or the intermediary has acted negligently.
The Finnish perspective
In Finland, the Product Liability Act (17.8.1990/694) and/or the Consumer Protection Act (20.1.1978/38) provide a consumer with the right to claim compensation for damage or injury caused by a product. Here both of the acts are dealt with from the point of view of the retailer's liability.
The Product Liability Act and Retailer's Liability
Pursuant to the Product Liability Act, the liability of an intermediary, for example a retailer, is secondary compared to the liability of a manufacturer or importer. An intermediary can avoid a claim for compensation by notifying the party suffering from the damage or injury of the contact information of the manufacturer or importer that are primarily liable. The retailer is not even responsible for e.g. the capability of the primary liable party to pay the compensation. (Product Liability Act § 5-6) The purpose of the intermediary's secondary liability is to increase the possibility of those who make a claim for compensation to find the correct party to pay compensation for damages. Through secondary liability the aim is to prevent multiple claims for compensation backwards the distribution chain, because it is possible to direct the claim for compensation in the first instance towards the correct liable party.
Upon examination of the Product Liability Act, it is clear that the amendments in Denmark's product liability legislation do not affect Finland because Finland's product liability act already complies with the judgement awarded by the EU-Court in the Danish case. According to the judgement a retailer can not become the primary party liable for damage or injury caused by a product to the consumer. In Denmark, following the amendment to the law, the manufacturer must also be included in the claim for compensation if the claim is to succeed. In Finland, a claim against the retailer is also unlikely to succeed by virtue of the product liability act. However, the retailer must assist the claimant for compensation in directing the claim to the correct party.
The Consumer Protection Act and the Liability of the Retailer
According to the Consumer Protection Act, the claimant for compensation can direct his/her claim towards the seller or other entrepreneur, who during an earlier marketing stage has supplied the article for retail sale(Consumer Protection Act 5:31.1). The purpose of this part of the act is to support the consumers' expectations concerning the final plaintiff. According to the preliminary work of the Consumer Protection Act, customers often perceive that the erroneous liability is more the fault of the manufacturer or importer of the article of goods than that of the retailer. If, even according to the law, a consumer could only bring a claim of compensation to the retailer but he claimed it from the manufacturer in the first instance, then there would be a threat of a loss of rights.
According to the Consumer Protection Act, the retailer’s liability for the property damage the product has caused can be divided into two categories. Direct damage, i.e. damage to property which has a direct connection of use to the sold goods, will be compensated irrespective of whether or not the retailer has caused the damage through negligence. Indirect damage, i.e. damage to other property must only be compensated, if the retailer has caused the damage through negligence. The Consumer Protection Act does not apply to compensation for personal injury. If the retailer has with respect to the consumer become liable for property damage caused by the product, the consumer’s right of recourse will transfer, according to the Product Liability Act, to the retailer. (Consumer Protection Act § 5:20-21)
Under the Consumer Protection Act, a retailer can also be liable for the product’s defect even though the retailer will not in every case bear the final liability due to the right of recourse. In Denmark, a retailer, after the judgement and the amendment to the law can only be liable for such property damage caused by a product, if the retailer or manufacturer has acted negligently.
Extensive rights for compensation
Both the Product Liability Act and the Consumer Protection Act have included clauses which concern the scope of application. They state that the laws do not limit the right of the party suffering the damage to seek compensation for damage by virtue of an agreement or other law (Product Liability Act §11, Consumer Protection Act § 12:1b). It will then be up to the party who has suffered the damage to decide what, in their own individual case, is the most advantageous channel in which to seek compensation.
When the situation is evaluated in general the resulting conclusion is that the right of the party suffering the property damage has an extensive right to claim compensation. On the other hand, in some cases the retailer has possibility to completely avoid any liability for the damage the product has caused. In some other cases, however, he may direct the claim for compensation to the next party in the contract chain and in the end through the right of recourse avoid paying compensation for the damage the product has caused.
The Swedish perspective
In Sweden, Directive 85/374/EEC was implemented in 1992 through the Product Liability Act. According to legal commentaries in Sweden following the judgement in the Danish case, the judgement will not cause any amendments to the Swedish legislation since it is deemed that the Swedish legislation is conforming to the allocation of responsibility as advised by the EU-Court.
Liability of the producer of the eggs
If the eggs carrying salmonella had been sold by a retailer to customers in Sweden, the customers infected by the salmonella would have a claim against the producer of the eggs, whose liability would be strict, i.e. the customers would not have to prove that the producer had been negligent. However, claims must be made within three years after the damage or injury occurred and the casual link with the product was established, but not later than ten years after the producer put the product into circulation.
Damages under the Product Liability Act cover compensation for death and personal injury as well as compensation for damage to "consumer property". There is no financial ceiling on serial damage. On damages awarded as compensation for damages to consumer property, an amount of SEK 3500 is deducted.
Liability of the retailer selling the eggs
Direct action against the retailer selling the contagious eggs, based on the Product Liability Act, can only be brought under the following conditions:
- If the retailer has marketed the eggs as if he had produced them, by putting his name, trade mark or other distinguishing features on the eggs/egg cartons;
- If the retailer has imported the eggs from outside the EU; and
- Where the producer of the eggs cannot be identified and the retailer does not inform the injured customers of the identity of the producer or the person who supplied him with the eggs within one month from when the injured customers presented their claim or asked for such information.
In addition to the above, the injured customers may bring a claim under Swedish general law on tort against the retailer. For such a claim to be successful the customers would have to prove that the retailer had acted negligently when selling the contaminated eggs. The general law on tort is thus not affected by the Product Liability Act, but it will of course normally be of little interest in cases covered by the Product Liability Act.
The Swedish law on consumer sales contains a rule on product liability according to which the seller of a product is liable for damages to the buyer's property and to property belonging to members of the buyer's family, provided that the damage is caused by a defect in the product for which the seller is liable under the Consumer Sales Act. Accordingly, the customers injured by the contaminated eggs may also claim compensation from the retailer for the cost of the contaminated eggs and damage to property, e.g. a cake made with the eggs, based on the Consumer Sales Act. However, the Product Liability Act provides that where a retailer has had to indemnify a customer under this provision in the Consumer Sales Act, he has the right of recourse against the producer who is liable under the Product Liability Act. The act furthermore stipulates that this right of recourse for the retailer may not be limited by contract.
Rikke Rasmussen
Emil Bryhn
Elisa Korniloff
Oskar Hedlund
