Kennedys secures important ruling for product manufacturers and insurers

Hazel Wilson (as Administratrix of the estate of John Wilson) v Beko plc [10.12.19]

Consumers of products are not entitled to rely upon s.41 of the Consumer Protection Act 1987 (the CPA) to circumvent the limitation long-stop that would ordinarily restrict damage claims from being brought more than 10 years after the product in question was first put into circulation.

That is the ruling of the High Court today in a decision likely to affect many hundreds of other claims against product manufacturers and importers, particularly in the context of domestic appliances.

Background

Kennedys acted for Beko plc in an action brought by the Wilson family following a house fire on 9 August 2016. The fire itself had tragic consequences. The claimants (including representatives of the deceased) brought an action in both negligence and for breach of statutory duty. Beko denied liability in negligence and denied that the claimant was, as a matter of law, permitted to bring a claim based on breach of statutory duty. The parties agreed that the latter point should be resolved by way of preliminary issue.

The claimants asserted that the combined effect of s.41 of the CPA and the Electrical Equipment (Safety) Regulations 1994 imposed a strict liability upon Beko for loss and damage arising from unsafe products and was a permissible derogation from the EU Products Directive under Article 13. Beko argued that to read s.41 as allowing a claim based on strict liability for a defective product in circumstances outside the scope of the Directive, would be an impermissible extension of liability and inconsistent with ECJ and CJEU case law.

Judgment

Mr Justice Julian Knowles agreed with Beko. He held that an action under s.41 must fail. Any safety regulations made under s.11 of the CPA must be construed so as not to give rise to civil liability insofar as the claims would otherwise fall within the scope of Part I of the CPA.

Comment

Commenting on the decision Daniel Turner of Kennedys observed:

This is a tragic case and the impact of the fire on the Wilson family should not be overlooked. Nevertheless this important clarification of the law was necessary. Product manufacturers and importers will continue to owe obligations in respect of defective products, but within the carefully balanced environment of the existing consumer legislation.

Whilst insurers whose predominant interest is in property insurance might regret the loss of subrogation opportunities that the section 41 argument sought to create, ultimately this decision will be of significant benefit to product liability insurers and their insureds, as it removes the unfairness that would otherwise have been imposed by a system of strict liability in perpetuity.

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