CONCEPT OF PRODUCT LIABILITY UNDER NEW CONSUMER PROTECTION LAW IN INDIA

With the new Consumer Protection Law, 2019 (the Act) replacing the 1986 Act, one of the new additions to the Act has been the concept of ‘Product Liability’. With its origin in the United States several decades ago, it finally finds a place in the Indian legal system in terms of consumer protection.

The Black’s Law Dictionary broadly defines Product Liability as the legal liability of manufacturers and sellers to compensate buyers, users, and even bystanders, for damages or injuries suffered because of defects in goods purchases. The concept first came to light in 1963 in the Greenman case[1] wherein the Plaintiff suffered an injury due to the defective productive by the manufacturer. In the case, the Court went on to hold that the seller or the user cannot be held liable as the product had a hidden defect which would place liability squarely on the manufacturer. Thus, began the journey of the most consumer-friendly concept in history.

Product liability laws in India govern the liability of manufacturers, wholesalers, distributors, and vendors for injury to a person or property caused by dangerous or defective products. The goal is to help protect consumers from dangerous or defective products, while holding manufacturers, distributors, and retailers responsible for putting into the marketplace products that they knew or should have known were dangerous or defective.

Laws relating to product liability have been constantly evolving by way of judicial interpretations and amendments, to become one of the most important socio-economic legislations for the protection of consumers. The legislation, in respect of product liability in India though was enacted to protect the interest of consumers but the same was, earlier construed narrowly, thereby frustrating the object sought to be achieved. However, over the years, the courts have become pro-consumer. This trend is visible as the compensation or damages that are awarded to the aggrieved are more punitive in nature than compensatory.

The Consumer Protection Act, 2019 for the first time recognized ‘Product Liability’ and defined it as ‘the responsibility of a product manufacturer or product seller to compensate for any harm caused to the consumer by the defective product or by any services provided in respect of the product. An aggrieved consumer can claim compensation under the Act for the harm caused, including damage to any property other than the product itself, personal injury, illness or death, or mental agony or emotional distress caused due to damage to property.’

To establish causation in product liability cases under Indian law, every fact establishing the elements of a cause of action must be proved by the plaintiff or the aggrieved party. Therefore, in claims relating to defects in products, depending on the factual circumstances, the burden of proof will be on the aggrieved party.

Exceptions

A product liability action cannot be brought against a product seller if the product is misused, modified or altered by the user. The product manufacturer will not be liable for failure to provide a warning of danger, which is obvious or commonly known. With respect to claims based on failure to provide adequate warnings, the product manufacturer will not be liable for: (i) products purchased by an employer for use by employees at the workplace and the product manufacturer has provided warnings or instructions to the employer; (ii) products forming a component of an end product where harm is caused by the use of the end product and the product manufacturer has provided warnings or instructions to the purchaser of the component; (iii) products meant to be used by experts and the product manufacturer has provided warnings/instructions to the experts; (iv) product used under the influence of alcohol/unprescribed drug.[2]

The CCPA

The Act provides for the establishment of the Central Consumer Protection Authority (CCPA) a body to promote, protect and enforce the rights of consumers as a class. The CCPA regulates matters relating to the violation of consumer’s rights, unfair trade practices, and false or misleading advertisements. Among other things, the CCPA has the authority to refer instances of violations of consumer rights or unfair trade practices to investigating authorities, and pass orders to recall goods or withdraw services that are dangerous or hazardous, ensure reimbursement of the price for such goods or services to the purchasers, and discontinue practices that are unfair or prejudicial to consumers’ interests.

Forums

There are multiple forums that an aggrieved party can approach in cases relating to loss, damage or injury resulting from defects in goods or services. These include: The consumer court or forum in the concerned jurisdiction; Civil court (if contractual breach or a tortious action); An arbitral tribunal in accordance with an arbitration agreement executed between the relevant parties and finally in case of a criminal offence, the magistrate’s court in the concerned jurisdiction.

Conclusion

With the advent of the concept in the new Consumer Protection Act of 2019 along with the Court’s pro-consumer approach, product liability laws have received a major boost. This also helps in separating the liability between different members who are involved in the process of manufacturing to the ultimate delivery, meaning thereby, liability of fault could be at any stage, even by the vendor and hence, the manufacturer who suffered the brunt mostly may now be absolved where no liability exists given the facts and circumstances of each case.

[1] Greenman v. Yuba Power Products, Inc. - 59 Cal.2d 57; 377 P.2d 897. [2] Section 87, The Consumer Protection Act 2019.