Product Liability II
Cases
A & Ors v National Blood Authority & Ors
[2001] EWHC QB 446 (2001) 65 BMLR 1, 65 BMLR 1, [2001] EWHC QB 446
Mr Justice Burton:
THE CLAIMANTS
This trial has concerned the claims of 114 Claimants for recovery of damages arising out of their infection with Hepatitis C from blood and blood products through bloodtransfusions from 1 March 1988. It has been the first and main trial heard by me as the assigned Judge within the Hepatitis Litigation, which was the subject matter of a Practice Direction issued by the Lord Chief Justice on 30 July 1998. This trial has been limited to consideration of the case brought by those Claimants infected with Hepatitis C from blood and blood products who are making claims under the Consumer Protection Act 1987 (‘CPA’). There is a small number of other Claimants within the group action whose claims are not being dealt with by this trial, for example those not claiming under the CPA and/or claiming in relation to infection as a result of the transplant of body parts and/or with Hepatitis B: their claims are to be dealt with so far as possible later this year. The 114 Claimants received blood transfusions or blood products usually in the course of undergoing surgery, whether consequent upon having suffered an accident or otherwise, or immediately after childbirth or in the course of treatment for a blood disorder. The earliest date of infection in respect of which claimants can make such claims is 1 March 1988, being the date when the CPA was brought into effect. Most of the Claimants have been identified by the Defendants’ own admirable Look-Back programme, which began in 1995. There were, fortunately, relatively few such sufferers, and it should be said immediately that there is no question of their having received ‘contaminated’ blood, that is blood infected by some outside agent: the blood they received was ‘infected’ because, exceptionally, the donor’s blood was infected by Hepatitis C.
CAUSE OF ACTION
The claims the subject matter of this trial are not in negligence, but are put against the Defendants by way of ‘strict’ or ‘objective’ liability by virtue of the CPA, which implemented in the United Kingdom the European Union (then the EEC) Product Liability Directive of 1985, being a Council Directive of 25 July 1985 (‘the Directive’). The Directive is not, in any event in this action, said to be directly enforceable against the Defendants by the Claimants, who rely for their cause of action on the CPA. However, as below appears, the European Commission complained, by application lodged at the European Court on 20 September 1995, that the United Kingdom Government had not fulfilled its obligations under the Directive and under the EC Treaty by implementing the CPA in the terms it had. Although the European Court dismissed that application, it is apparent from the judgment of the European Court, reported as European Commission v United Kingdom (‘Commission v UK’) [1997] AER (EC) 481, that, there not at that stage having been any decisions of the English courts, nor indeed any facts before the European Court, the European Court was concluding that, whatever be the precise terms of the CPA, the United Kingdom would so implement and construe the CPA as to be consistent with the Directive – not least by virtue of Section 1(1) of the CPA, which reads as follows:
“[Part I] shall have effect for the purpose of making such provision as is necessary in order to comply with the Product Liability Directive and shall be construed accordingly.”
Consequently both parties have during this trial almost exclusively concentrated on the terms of the Directive, on the basis that, insofar as the wording of the CPA, in relation to matters which have been the subject matter of particular issue in this case, differs from the equivalent Articles in the Directive, it should not be construed differently from the Directive; and consequently the practical course was to go straight to the fount, the Directive itself. As will be seen, the arguments were directed mainly to the true and proper construction of Article 6 of the Directive (the equivalent being Section 3 of the CPA) and Article 7(e) (the equivalent being Section 4(1)(e)), and consequently it is with those Articles, and not the relevant Sections, with which this judgment will be primarily, if not exclusively, concerned. It is conceded for the purpose of these proceedings that the blood or blood products by which the Claimants were infected are products within the meaning of the CPA and the Directive, and that the Defendants’ production of blood was, for the purpose of the Directive, an industrial process.
THE DEFENDANTS
The National Health Service bodies responsible for the production and supply of blood and blood products prior to 1 April 1993 in England (and also covering northern Wales) were fourteen regional blood transfusion centres (‘RTCs’), controlled and administered by Regional Health Authorities. From that date, by the National BloodAuthority (Establishment and Constitution) Order 1993 (SI 1993 No. 583), the National Blood Authority (‘NBA’) was established, with responsibility for the RTCs and both central blood laboratories (the Central Blood Laboratory Authority (‘CBLA’), which itself had responsibility for the Blood Products (later Bio Products) Laboratory (‘BPL’), and the Blood Groups Research Laboratory (‘BGRL’)). Subsequently the National Blood Authority (Establishment and Constitution) Amendment Order 1994 (SI 1994 No. 589) provided that all rights enforceable by or against a Regional Health Authority in respect of the exercise of functions which became exercisable by the NBA were to be exercisable against the NBA. So far as Wales is concerned, those parts of Wales not serviced by the Mersey RTC were covered by a transfusion centre in Cardiff operated by the South Glamorgan Health Authority. Responsibility for that, and for the provision of a blood transfusion service in Wales, was transferred not to the NBA but to the Welsh Health Common Services Authority, and as from 1 April 1999 was further transferred to Velindre NHS Trust, which is now the relevant Defendant so far as any liabilities to the Claimants in respect of the balance of Wales is concerned. I shall refer in this judgment to ‘the Defendants’ without taking into account the various changes of identity and responsibility.
THE PROCEEDINGS
….
THE DIRECTIVE
The Directive, resolved by the Council on 25 July 1985, had taken a long time in coming. In the first instance this was because discussion of it, which had begun in 1969/1970 in the light of the Thalidomide scandal, was held up largely due to the impending arrival of a number of new members of the Community, including the United Kingdom; but then because of the very lengthy processes of discussion and negotiation, and of intergovernmental and parliamentary discussion, which then took place. A number of matters appear to be common ground between the parties to these proceedings:
that its purpose was to increase consumer protection.
that it introduced an obligation on producers which was irrespective of fault, by way of objective or strict liability, but not absolute liability.
that its aim was to render compensation of the injured consumer easier, by removing the concept of negligence as an element of liability and thus of the proof of liability.
that it left an escape clause [in those Community jurisdictions, like the UK, where such provision was desired] for products otherwise found pursuant to the Directive to be defective, if the producer could bring himself within what was, in the course of the ‘travaux preparatoires,’ described as a ‘development risks’ defence.
The parties before me agreed to number what are in the published Directive an otherwise unnumbered set of nineteen recitals. The significant ones for the purpose of these proceedings have been as follows:
“[1] Whereas approximation of the laws of the Member States concerning the liability of the producer for damage caused by the defectiveness of his product is necessary because the existing divergences may distort competition and affect the movement of goods within the common market and entail a differing degree of protection of the consumer against damage caused by a defective product to his health or property;
[2] Whereas liability without fault on the part of the producer is the sole means of adequately solving the problem, peculiar to our age of increasing technicality, of a fair apportionment of the risks inherent in modern technological production;
[3] Whereas liability without fault should apply only to movables which have been industrially produced; whereas, as a result, it is appropriate to exclude liability for agricultural products and game, except where they have undergone a processing of an industrial nature which could cause a defect in these products ..
[6] Whereas, to protect the physical well-being and property of the consumer, the defectiveness of the product should be determined by reference not to its fitness for use but to the lack of the safety which the public at large is entitled to expect; whereas the safety is assessed by excluding any misuse of the product not reasonable under the circumstances;
[7] Whereas a fair apportionment of risk between the injured person and the producer implies that the producer should be able to free himself from liability if he furnishes proof as to the existence of certain exonerating circumstances;
[11] Whereas products age in the course of time, higher safety standards are developed and the state of science and technology progresses; whereas, therefore, it would not be reasonable to make the producer liable for an unlimited period for the effectiveness of his product; whereas, therefore, liability should expire after a reasonable length of time, without prejudice to claims pending at law;
[13] Whereas under the legal systems of the Member States an injured party may have a claim for damages based on grounds of contractual liability or on grounds of non-contractual liability other than that provided for in this Directive; insofar as these provisions also serve to attain the objective of effective protection of consumers, they should remain unaffected by this Directive; whereas, in so far as effective protection of consumers in the sector of pharmaceutical products is already also attained in a Member State under a special liability system, claims based on this system should similarly remain possible;
[16] Whereas, for similar reasons, the possibility offered to a producer to free himself from liability if he proves that 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 a defect to be discovered may be felt, in certain Member States, to restrict unduly the protection of the consumer; whereas it should therefore be possible for a Member State to maintain in its legislation or to provide by new legislation that this exonerating circumstance is not admitted; whereas, in the case of new legislation, making use of this derogation should, however, be subject to a Community stand-still procedure, in order to raise, if possible, the level of protection in a uniform manner throughout the Community.”
It is not in dispute between the parties that the Directive can and must be construed by reference to its recitals and indeed to its legislative purpose, insofar as it can be gleaned otherwise than from the recitals. The following points are also not in dispute and are in any event clear:
that it is proper to look at travaux preparatoires to glean such purpose, but with caution, always chary of early discussions or disputations which may have been overtaken by later events, or of documents which may always have been internal or confidential and not reflected in the decisions:
that it is important to bear in mind in construing a Directive that there may be an ‘autonomous’ or Community meaning or construction for legislation intending to harmonise and to be of effect in diverse jurisdictions within the Community; and that some guidance can be obtained from other languages in which the Directive was published, all of which are of equal weight, the more so if some appear clear and congruent; and to some extent also from the way in which a Directive has been implemented or applied in other Community countries.
The relevant Articles are as follows:
“1. The producer shall be liable for damage caused by a defect in his product.
4. The injured person shall be required to prove the damage, the defect and the causal relationship between defect and damage.
6.1 A product is defective when it does not provide the safety which a person is entitled to expect, taking all circumstances into account, including:
(a) the presentation of the product;
(b) the use to which it could reasonably be expected that the product would be put;
(c) the time when the product was put into circulation.
6.2 A product shall not be considered defective for the sole reason that a better product is subsequently put into circulation.
7. The producer shall not be liable as a result of this Directive if he proves:
(a) that he did not put the product into circulation; or
(b) that, having regard to the circumstances, it is probable that the defect which caused the damage did not exist at the time when the product was put into circulation by him or that this defect came into being afterwards; or
….
(d) that the defect is due to compliance of the product with mandatory regulations issued by the public authorities; or
(e) that 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; …
8.1 Without prejudice to the provisions of national law concerning the right of contribution or recourse, the liability of the producer shall not be reduced when the damage is caused both by a defect in product and by the act or omission of a third party.
8.2 The liability of the producer may be reduced or disallowed when, having regard to all the circumstances, the damage is caused both by a defect in the product and by the fault of the injured person or any person for him the injured person is responsible.
9. For the purpose of Article 1, ‘damage’ means:
(a) damage caused by death or by personal injury …
12. The liability of the producer arising from the Directive may not, in relation to the injured person, be limited or excluded by a provision limiting his liability or exempting him from liability.
15.1 Each Member State may …
(b) by way of derogation from Article 7(e) maintain or … provide in its legislation that the producer shall be liable even if he proves that the state of scientific or technical knowledge at the time when he put the product into circulation was not such as to enable the existence of a defect to be discovered …”
THE CPA
When the United Kingdom implemented the Directive, it did so by way of the CPA, which came into force on 15 May 1987, but with effect from 1 March 1988. There have been few decisions under the CPA. I have been referred only to two – one unreported in the Court of Appeal, Iman Abouzaid v Mothercare (UK) Ltd 21 December 2000 [‘the Cosytoes case’] and one a decision of Ian Kennedy J, which has been reported (Richardson v LRC Products Ltd [2000] Lloyds (Med) 280 [‘Richardson’]: I shall refer to them both. However in neither case was there the need nor the opportunity for the kind of detailed consideration of the CPA, and in particular of all the issues raised by Articles 6 and 7(e) of the Directive (respectively sections 3 and 4(1)(e) of the CPA), that there has been in this case. Apart from the evidence and its analysis, and from the separate consideration of the lead cases, I have had the great benefit of detailed submissions in writing, and some ten days of exegesis and argument orally in opening and closing by leading counsel, just on the law, including authorities and academic writings from France, Germany, Spain, Portugal, Sweden, Denmark, Belgium, Italy, Holland, Australia and the United States, as well as the United Kingdom and the European Court. In the light of the concession in this case that blood is a product within the Directive, and the nature of the issues for determination and the possible consequent knock-on effect of this judgment, (subject always to any appeal to higher courts in this country or on reference to Europe), I note without surprise that Professor Stapleton, probably the most eminent and certainly the most prolific of the common law writers on the topic of product liability, refers to the fact that this case is pending in her introduction to the recent volume in the Butterworths Common Law Series The Law of Product Liability edited by Professor Howells [‘Butterworths Product Liability’].
The most authoritative consideration of the CPA has of course been in the case of Commission v UK, to which I have referred in paragraph 2 above, and that was consideration in principle, not by reference to the facts of any case, and directed specifically to Article 7(e) (and Section 4(1)(e)). As I have set out in paragraph 2, the Commission contended that the Section did not properly or lawfully reflect the Article as it should. As will be seen below, it adopts different wording from the Article, and this may result from the United Kingdom’s Government’s own unilateral declaration that it made at the time of the adoption of the Directive, namely:
“this provision should be interpreted in the sense that the producer shall not be liable if he proves that, given the state of scientific knowledge at the time the product was put into circulation, no producer of a product of that kind could have been expected to have perceived that it was defective in its design.”
This falls to be compared with the text of the Article, which I have set out in paragraph 16 above. Section 4(e) of the CPA as enacted is as follows (I underline the significant differences from the Article):
“In any civil proceedings … against any person … in respect of a defect in a product it shall be a defence for him to show …
(e) that the state of scientific and technical knowledge at the relevant time was not such that a producer of products of the same description as the product in question might be expected to have discovered the defect if it had existed in his products while they were under his control.”
Whatever the content of a unilateral declaration may be, a Community Government is obliged in law to enact the Directive, and the Commission contended before the European Court that the UK Government had not done so. The European Court concluded that, notwithstanding that there was a difference of wording, it could not be satisfied that it was intended by the United Kingdom to interpret its statute differently from the Directive, nor was the United Kingdom entitled to do so. At 490h, paragraph 25, the Advocate General (Tesauro) stated in his Opinion:
“I consider that I am unable to share the Commission’s proposition that there is an irremediable conflict between it and the national provision at issue. Indeed, there is no denying that the wording of Section 4(1)(e) of the [CPA] contains an element of potential ambiguity: insofar as it refers to what might be expected of the producer, it could be interpreted more broadly than it should. Notwithstanding this, I do not consider that the reference to the ‘ability of the producer’ despite its general nature, may or even must (necessarily) authorise interpretations contrary to the rationale and the aims of the Directive.”
After its own analysis of Article 7(e), the European Court concluded, at 495g – 496d, paragraphs 32-39:
“32. The Commission takes the view that inasmuch as s4(1)(e) of the [CPA] refers to what may be expected of a producer of products of the same description as the product in question, its wording clearly conflicts with Article 7(e) of the Directive in that it permits account to be taken of the subjective knowledge of a producer taking reasonable care, having regard to the standard precautions taken in the industrial sector in question.
33. That argument must be rejected insofar as it selectively stresses particular terms used in s4(1)(e) without demonstrating that the general legal context of the provision at issue fails effectively to secure full application of the Directive. Taking that context into account, the Commission has failed to make out its claim that the result intended by Article 7(e) of the Directive would clearly not be achieved in the domestic legal order.
34. First s4(1)(e) … places the burden of proof on the producer wishing to rely on the defence, as Article 7 of the Directive requires.
35. Second s4(1)(e) places no restriction on the state and degree of scientific and technical knowledge at the material time which is to be taken into account.
36. Third, its wording as such does not suggest, as the Commission alleges, that the availability of the defence depends on the subjective knowledge of a producer taking reasonable care in the light of the standard precautions taken in the industrial sector in question.
37. Fourth, the court has consistently held that the scope of national laws … must be assessed in the light of the interpretation given to them by national courts … Yet in this case the Commission has not referred in support of its application to any national judicial decision, which, in its view, interprets the domestic provision at issue inconsistent with the Directive.
38. Lastly there is nothing in the material produced to the Court to suggest that the United Kingdom, if called upon to interpret s4(1)(e), would not do so in the light of the wording and the purpose of the Directive, so as to achieve the result which it has in view and thereby comply with the third paragraph of Article 189 of the Treaty … Moreover s(1)(1) of the [CPA] expressly imposes such an obligation on the national courts.
39. It follows that the Commission has failed to make out its allegation, that, having regard to its general legal context and especially s1(1) of the Act, s4(1)(e) clearly conflicts with Article 7(e) of the Directive. As a result the application must be dismissed.”
Although the UK Government has not amended Section 4(1)(e) of the CPA so as to bring it in line with the wording of the Directive, there is thus binding authority of the European Court that it must be so construed. Hence, although I shall in certain respects require to consider sections of the CPA, when dealing with the issues raised before me of causation and/or quantum of loss, to which I shall refer, the major discussions in this case, and all the areas of most live dispute, have concentrated entirely upon the wording of Article 6 and 7(e) of the Directive, and not upon the equivalent sections of the CPA, to which I shall make little or no further reference.
In those circumstances there is no need for me to set out in full Section 3 of the CPA which implements Article 6, although it may be worth pointing out that the words in Article 6(1)(a) ‘the presentation of the product’ are helpfully expanded and clarified in the CPA in the following way “the manner in which, and purposes for which, the product has been marketed, its getup, the use of any mark in relation to the product and any instructions for, or warnings with respect to, doing or refraining from doing anything with or in relation to the product” (s3(2)(a); and that the words with which s3(2) ends are perhaps a cogent way of expressing Article 6.2 which I have set out above, and in particular the reference in the Article to “a better product [being] subsequently put into circulation” namely:
“Nothing in this section shall require a defect to be inferred from the fact alone that the safety of a product which is supplied after that time is greater than the safety of the product in question.”
I shall set out below, when they fall for consideration, the two other sections of the CPA to which reference was made in the course of the trial, with respect to the issue which I have described as causation and/or quantification of loss, namely Sections 2(1) and 5(1).
THE SIX ISSUES
This raises the question of whether the Defendants are liable to the Claimants, without consideration of the history of testing. The Claimants allege that, upon the basis of a proper construction of the Directive and the agreed factual common ground, the blood was defective under Article 6 and the Defendants have no escape within Article 7(e), without need for further consideration of the facts [Issue I]. This was described in the course of the hearing as the ‘Forrester case’ or the ‘Brown short case’ (which descriptions derogate from the role of Mr Brooke QC for the Claimants who ably married together all the Claimants’ arguments).
Factual case: Legitimate Expectation [Issue II]. Whether or not I find the Defendants so liable, for the reasons I have set out above, I must proceed to resolve the factual questions which the Claimants assert to be unnecessary – the ‘Brown case’. The Claimants assert, if they need to, that, in the light of the factual history relied upon by the Defendants, the blood was defective within Article 6. I shall also make sufficient findings to resolve any factual issues under Article 7(e), as to which see paragraph 28 below.
I must then resolve the issue of the nature and measure of damages under Article 6 in the event that the Defendants were found liable (and in any event, for the reasons given above):
on the basis of my conclusions on Issue I [Issue IIIa]
on the basis of my conclusions on Issue II [Issue IIIb]
I must decide whether the Defendants escape any such liability under Article 7(e):
in the light of my conclusions on the construction of Article 7(e) on Issue I [Issue IVa] and/or
in the light of my conclusions on Issue II [Issue IVb]
I shall turn then to the six lead cases. Subject always to the outcome of Issue I, I may have made, in my consideration in respect of Issue II, findings as to the date when tests could legitimately have been expected to be implemented which might mean that, depending upon their date of infection, only certain Claimants succeed, i.e., those infected after such and such a date, while others do not. That apart, I have heard a good deal of evidence about Hepatitis C and its prognosis and consequences generally, and in addition all the evidence relating to the individual circumstances of the six lead Claimants (two of whom, as previously discussed, will in any event receive compensation in accordance with my conclusions on quantum, by virtue of the 90% concession agreement).
I shall, again even if I shall have found that some or all of the Claimants fail (apart from those covered by the concession):
make findings on the generic issues raised relating to quantum arising out of and by reference to the particular circumstances of the six lead Claimants, including such matters as recoverability or otherwise of damages in respect of alleged social or insurance or employment stigma resulting from their Hepatitis condition, past or present. (Issue V)
assess damages, in the case of five of the lead Claimants by way of provisional damages, on the basis of what have now, after considerable discussion and argument, become agreed triggers for any potential future entitlement to additional damages pursuant to Section 32A of the Supreme Court Act 1981, and in the case of one of them, Mr W, at his request, final damages. (Issue VI)
ARTICLE 6
The Common Ground
I turn then to consideration of Article 6. There is a foundation of common ground:
Article 6 defines ‘defective’, and hence a defect. A harmful characteristic in a product, which has led to injury or damage, may or may not be a defect as so defined, and thus within the meaning of the Directive. It is common ground that the liability is ‘defect-based’ and not ‘fault-based’, i.e., that a producer’s liability is irrespective of fault (Recitals 2, 6).
The purpose of the Directive is to achieve a higher and consistent level of consumer protection throughout the Community and render recovery of compensation easier, and uncomplicated by the need for proof of negligence.
Both these propositions are expressed by Christopher Newdick in two published articles, first in the Law Quarterly Review [1987] 103 LQR 288:
“Liability for defective products is no longer to be dependent on fault, but rather on the mere fact of defectiveness. The broad reasons of policy for the change continue to be articulated by the injuries suffered by the thalidomide children. By the attention it devotes to consideration of the alleged fault of the defendant, the law of Negligence is unable to consider the interests of the person for whom the action has been brought.”
and also in the Cambridge Law Journal [1988] CLJ 47(3) at 455 where, before going on to deal with Article 7(e) as a possible exception, he states:
“The … Directive introduces a new regime of strict product liability to the Member States of the Community. Those injured by products may recover by showing that the product is ‘defective’, i.e., that it ‘does not provide the safety which a person is entitled to expect …’ The advantage of this approach for the individual is that liability turns on the existence of a defect alone. Unlike the law of Negligence, no question of foresight of the danger, or of the precautions taken to avoid it, arises for consideration. Strict product liability depends on the condition of the product, not the fault of its maker or supplier.”
The onus of proof is upon the Claimants to prove the product to be defective.
The question to be resolved is the safety or the degree or level of safety or safeness which persons generally are entitled to expect. The test is not that of an absolute level of safety, nor an absolute liability for any injury caused by the harmful characteristic.
In the assessment of that question the expectation is that of persons generally, or the public at large.
The safety is not what is actually expected by the public at large, but what they are entitled to expect. At one stage Mr Forrester QC contended that the process was to discover what the expectation was, and then see if it was legitimate; but, not least for the reasons set out in the next following sub-paragraph, he no longer actively pursued that contention. The common ground is that the question is what the legitimate expectation is of persons generally, i.e., what is legitimately to be expected, arrived at objectively. ‘Legitimate expectation’, rather than ‘entitled expectation’ appeared to all of us to be a more happy formulation (and is analogous to the formulation in other languages in which the Directive is published); the use of that expression is not intended to import any administrative law concepts.
The Court decides what the public is entitled to expect: Dr Harald Bartl in Produkthaftung nach neuem EG-Recht described the Judge (as translated from the German) as ‘an informed representative of the public at large’. Mr Brown QC did not like this, and preferred to suggest simply that the Judge is determining what level of safety the public is entitled to expect, but I do not consider the two descriptions inconsistent. Such objectively assessed legitimate expectation may accord with actual expectation; but it may be more than the public actually expects, thus imposing a higher standard of safety, or it may be less than the public actually expects. Alternatively the public may have no actual expectation – e.g., in relation to a new product – the word coined in argument for such an imaginary product was a ‘scrid’.
There are some products, which have harmful characteristics in whole or in part, about which no complaint can be made. The examples that were used of products which have obviously dangerous characteristics by virtue of their very nature or intended use, were, on the one hand knives, guns and poisons and on the other hand alcohol, tobacco, perhaps foie gras. The existence of such products was recognised in an exchange of Question and Answer by Mrs Flesch MEP to the European Commission, answered by Viscount Davignon on behalf of the Commission in June 1980. The question read in material part as follows:
“This provision ought apparently to be interpreted in the sense that nobody can legitimately expect from a product which by its very nature carries a risk and which has been presented as such (instructions for use, labelling, publicity, etc.) a degree of safety which this product does not and cannot possess, with the result that this product would not therefore be defective within the meaning of the future directive.”
The answer was:
“The Commission agreed with the Honourable Member that nobody can expect from a product a degree of safety from risks which are, because of its particular nature, inherent in that product and generally known, e.g., the risk of damage to health caused by alcoholic beverages. Such a product is not defective within the meaning of … the … Directive.”
This does not of course amount to an exemption for such a product from the Article, but simply an explanation of how the Article operates. Such obvious danger or risk of injury is, not very felicitously, described by a Danish writer, Borge Dahl, as ‘system’ damage. Professor Howells in Butterworths Product Liability at 1.19 refers to this as a description of:
“The risks which are inherent within a product which it is nevertheless considered justifiable to market. Examples include the risk of being cut by a sharp knife and the risk of illness associated with such otherwise pleasure giving products [as] alcohol and tobacco … The emphasis on the autonomy of the individual and his free choice to expose himself to risks has generally relieved the producer of … liability. However this free choice must be an informed choice and so there has been a need to define which types of system damage users can be expected to be aware of from their general life experience (i.e., that knives can be sharp) and those that they have to be warned about (i.e., risks associated with drinking and smoking).”
Drugs with advertised side-effects may fall within this category. The Defendants point out that, with other such products also, the known dangerous characteristics need not be the desired ones – e.g., carcinogenicity in tobacco.
Article 6.2 means that such test must be applied as at the date when the product is put into circulation, i.e., tested against the safety then to be expected. It is apparent that a product may be compared with other products said to be safer, but will not be condemned simply because another safer product is subsequently put into circulation.
There is also important factual common ground. It has, as set out in paragraph 8 above, been known, at least since the 1970s, by blood producers and the medical profession, primarily blood specialists, hepatologists and epidemiologists, that there was a problem of infection by Hep C (formerly NANBH) in transfused blood, and that a percentage of such blood – in the United Kingdom thought to be between 1% and 3% – was infected with NANBH/Hep C. The Claimants say that such knowledge by the medical profession and blood producers is on the one hand irrelevant to Article 6, and to the public’s expectation, and legitimate expectation, and on the other rules out the producers from the protection of Article 7(e). The Defendants say that such risks so known, which they allege to be impossible to avoid or prevent, affect the legitimate expectation of the public, such as to exclude Article 6, and, because they were unavoidable, qualify them, if necessary, for Article 7(e).
The Differences Between the Parties
Having set out what is common ground, I now summarise briefly the difference between the two parties, some of which is already apparent from my setting in context of the factual common ground:
As to Article 6, the Claimants assert that, with the need for proof of negligence eliminated, consideration of the conduct of the producer, or of a reasonable or legitimately expectable producer, is inadmissible or irrelevant. Therefore questions of avoidability cannot and do not arise: what the Defendants could or should have done differently: whether there were any steps or precautions reasonably available: whether it was impossible to take any steps by way of prevention or avoidance, or impracticable or economically unreasonable. Such are not ‘circumstances’ falling to be considered within Article 6. Insofar as the risk was known to blood producers and the medical profession, it was not known to the public at large (save for those few patients who might ask their doctor, or read the occasional article about blood in a newspaper) and no risk that any percentage of transfused blood would be infected was accepted by them.
The Defendants assert that the risk was known to those who mattered, namely the medical profession, through whom blood was supplied. Avoiding the risk was impossible and unattainable, and it is not and cannot be legitimate to expect the unattainable. Avoidability or unavoidability is a circumstance to be taken into account within Article 6. The public did not and/or was not entitled to expect 100% clean blood. The most they could legitimately expect was that all legitimately expectable (reasonably available) precautions – or in this case tests – had been taken or carried out. The Claimants must therefore prove that they were legitimately entitled to expect more, and/or must disprove the unavoidability of the harmful characteristic. There would need to be an investigation as to whether it was impossible to avoid the risk and/or whether the producers had taken all legitimately expectable steps. Insofar as there was thus an investigation analogous to, or involving similar facts to, an investigation into negligence, it was not an investigation of negligence by the individual producer and was necessary and, because it was not an investigation of fault, permissible. If, notwithstanding the known and unavoidable risk, the blood was nevertheless defective within Article 6, then it is all the more necessary to construe Article 7(e) so as to avail those who could not, in the then state of scientific and technical knowledge, identify the defect in a particular product so as to prevent its supply.
The Claimants respond that Article 7(e) does not apply to risks which are known before the supply of the product, whether or not the defect can be identified in the particular product; and there are a number of other issues between the parties in respect of Article 7(e) to which I shall return later.
All Circumstances
Article 6 must then be considered against the background of this summary of the issues. In the establishment of the level of safety, Article 6 provides that the Court (on behalf of the public at large) takes into account all circumstances, including:
Presentation, i.e., the way in which the product is presented, e.g., warnings and price. As set out above, the expanded wording of s3(2)(a) of the CPA is helpful.
The use to which the product could reasonably be expected to be put, e.g.:
If the product is not a familiar or usual one, such as a scrid, it will be necessary to find out what its expected or foreseeable use is.
If it is expected and required to be dangerous in respect of its expected use, e.g., a gun, then complaint cannot be made of that dangerousness; but complaint could still be made of a different dangerousness, such as if it exploded on the trigger being pulled.
If it is not expected to be dangerous in respect of its expected use, but the use to which it is put is unexpected, then it may not be defective.
The time when the product is circulated, for example when the product is out of date or stale.
The question arises as to the status of the circumstances enumerated in Article 6. Are they exclusive? Neither side, rightly, now suggests that they are. Indeed Mr Forrester QC, who had, at an interlocutory hearing, seemingly run a contention to that effect, no longer pursued this, and indeed suggested that some circumstances not specifically mentioned in the Article, such as the circumstances of the supply of the product, may be relevant. That the circumstances are not exclusive obviously seems right. Are they then unlimited? There are various possibilities:
that they are to be construed eiusdem generis. This is asserted by Professor Taschner, the leading European expert on the Directive, in his 1990 book Produkthaftungsgesetz und EG-Produkthaftungsrichtlinie, at page 297; but, despite diligent research, the Claimants’ team was unable to find any support for the proposition that such a rule of construction could be exemplified in European law.
that they are to be construed as the most significant examples of the circumstances. There was some support for this proposition, both by way of some exemplars in European legislation – from which it could be suggested that European draftsmen had considered that the matters actually set out as examples were the ones most worthy of mention – and also by reference to the French language version of Article 6, which used the word, before the list of the circumstances, ‘notamment’, and the German, which used ‘insbesondere’, both of which I take to mean ‘in particular’ or ‘especially’ – although other language versions use phraseology more similar to the English ‘including’.
that they are to be construed as unlimited. Even Mr Underhill QC, I think, did not so contend, but accepted that the circumstances would have to be ‘relevant’ circumstances. Mr Forrester QC of course submits that circumstances which are inconsistent with the purpose of the Directive would not be ‘relevant’. He also refers to Professor Rolland of Halle University, who, in his 1990 book Produkthaftungsrecht at 131 cites Professor Taschner in concluding (translated from the German) that, in relation to the Article 6 circumstances, “only such considerations are relevant which do not alter the meaning of the safety expectations of the public at large, which are assessed on the basis of objective criteria, but not the subjective necessities of the producer, and also not those of the user of the product”.
The dispute therefore is as to what further, if anything, falls to be considered within ‘all circumstances’. There is no dispute between the parties, as set out in paragraph 31(i) and (ii) above, that consideration of the fault of the producer is excluded; but does consideration of ‘all circumstances’ include consideration of the conduct to be expected from the producer, the level of safety to be expected from a producer of that product? The parties agree that the starting point is the particular product with the harmful characteristic, and if its inherent nature and intended use (e.g., poison) are dangerous, then there may not need to be any further consideration, provided that the injury resulted from that known danger. However, if the product was not intended to be dangerous, that is the harmful characteristic was not intended, by virtue of the intended use of the product, then there must be consideration of whether it was safe and the level of safety to be legitimately expected. At this stage, the Defendants assert that part of the investigation consists of what steps could have been taken by a producer to avoid that harmful characteristic. The Defendants assert that conduct is to be considered not by reference to identifying the individual producer’s negligence, but by identifying and specifying the safety precautions that the public would or could reasonably expect from a producer of the product. The exercise is referred to as a balancing act; the more difficult it is to make safe, and the more beneficial the product, the less is expected and vice versa, an issue being whether a producer has complied with the safety precautions reasonably to be expected. This is contended by the Defendants to be appropriately analogous to the ‘risk/utility’ consideration familiar from United States law, particularly as summarised in the US Second Restatement on Torts (1965). However:
the Claimants point out that, although the Advocate General in Commission v UK at 488b para 17 records that the Commission’s original proposal in 1976 drew its inspiration from the US model, it is clear from the travaux preparatoires that when submissions were made that a United States style formulation should be adopted, it was not: the rejected suggestions including (from a body called UNICE in 1980) that “the fact that a product conforms with generally accepted standards should be prima facie evidence that the product is not defective” and, from the American Chamber of Commerce in Belgium in the same year, that the proposed Article “should be amended to include specific language concerning unavoidably unsafe but useful products … In drafting this amendment regard should be paid to the wording of Comment K to Section 402a of [the Second Restatement]”.
although the concept of ‘unavoidably unsafe’ has meant that producers have been found not liable in many states of the United States in respect of infected blood (see e.g., Brody v Overlook Hospital 317 A 2d 392 (1974) [subsequently affirmed by the Supreme Court of New Jersey]), the US Second Restatement has led to, or allowed for, a result, at least in Illinois, whereby there was strict liability imposed on the supplier of blood unavoidably infected with Hepatitis (Cunningham v McNeal Memorial Hospital 47 Ill. 2d 443 Supreme Court of Illinois): which decision was dealt with statutorily, as a matter of public policy, by the giving of immunity to blood banks – a so-called ‘blood-shield statute’, passed in most states of the United States.
the Defendants themselves accept that the risk/utility model adopted in the United States cannot be applied in its entirety, because of the express exclusion, so far as the Directive is concerned, of any question of liability for negligence. Nevertheless the Defendants assert that there is a ‘basket’ of considerations: the likelihood of injury resulting and the seriousness of it if it results, the cost and the quality of the product, the efficacy of the product (with and without safety precautions), none of which would necessarily be contentious from the Claimants’ point of view. For if it were to be asserted by a producer that a product was very cheap, and thus might have been expected to have been less safe, that might, on the Claimants’ case, be part of the presentation, if it were simply a question of an alleged lowering of expectations by virtue of the cheapness; while on the Defendants’ case the questions would arise in their own right as to what could have been practicable (or not) by way of safety precautions, and/or then perhaps as to the cost of such precautions, and perhaps the effect on the profitability of a producer. What would, on any basis, be contentious would be the further contents of the Defendants’ basket, namely the avoidability or unavoidability of the danger, and the availability or unavailability of alternatives.
The contentions proceed as follows:
The Defendants assert that, in looking at the product, it is essential to consider, in deciding what level of safety could reasonably have been expected, what more if anything could have been done: what precautions or tests could be used/should have been used/were available to be used/can legitimately be expected to have been used. If, the Defendants contend, the producer did not use obviously available safety processes or precautions, then that itself must be a factor to be taken into account against him, just as it would be in his favour if all available safety precautions were adopted. They accept that the investigation of what level of safety the public is entitled to expect may involve consideration of factual issues which would also be relevant in a negligence enquiry, but they say that this would be a matter of overlap rather than duplication, and inevitable and acceptable.
The Claimants however assert that, given that it is common ground that the Article imposes liability irrespective of fault, the exercise of considering what could or should have been done by the producer is an impermissible and irrelevant exercise, which lets questions of fault back in by the back door. They say that the consideration of what safety precautions should have been expected to have been adopted simply amounts to the introduction of a standard of legitimate expectability, rather than a standard of reasonableness, against which the conduct of a producer must be set: while the Defendants may be asserting that they accept that the consideration of the conduct of the individual producer is not relevant, nevertheless by the very consideration of what steps could legitimately have been expected to have been taken (against which what did occur inevitably has to be set) the same result is achieved. The Claimants contend that any consideration of the method or processes of production, including the safety precautions taken or not taken, is irrelevant. They assert that it is necessary only to look at the product itself (including comparison with similar or identical products on the market), which would involve its expected or intended use, without considering what more could have been done (and how easy or difficult or cheap or expensive it would have been to have done it). The safeness even of a scrid must be considered by reference to examination of such a product and its intended or foreseeable use, not its method of manufacture.
The Defendants counter that it would be impossible to carry out any comparative exercise without understanding what steps were taken, and why certain steps could or could not have been taken. If such comparison is with a later and safer product, the producer would then rely on Article 6.2, to assert that the greater safety offered by a subsequent model was not to be held against him, pursuant to Article 6.2: to which a claimant could inevitably seek to respond that, although the safer product was five years later, the producer could have taken the same steps five years earlier.
Non-Standard Products
In any event, however, the Claimants make a separate case in relation to the blood products here in issue: namely that they are what is called in the United States ‘rogue products’ or ‘lemons’, and in Germany ‘Ausreisser’ – escapees or ‘off the road’ products. These are products which are isolated or rare specimens which are different from the other products of a similar series, different from the products as intended or desired by the producer. In the course of Mr Forrester QC’s submissions, other more attractive or suitable descriptions were canvassed, and I have firmly settled on what I clearly prefer, namely the ‘non-standard’ product. Thus a standard product is one which is and performs as the producer intends. A non-standard product is one which is different, obviously because it is deficient or inferior in terms of safety, from the standard product: and where it is the harmful characteristic or characteristics present in the non-standard product, but not in the standard product, which has or have caused the material injury or damage. Some Community jurisdictions in implementing the Directive have specifically provided that there will be liability for ‘non-standard’ products, i.e., that such will automatically be defective within Article 6: Italy and Spain have done so by express legislation, and Dr Weber, in Produkthaftung im Belgischen Recht 1988 at 219-20, considers that that is now the position in Belgium also as a result of the implementation of the Directive.
Were the infected bags of blood in this case non-standard products? The Claimants say yes – 99 out of 100 are safe and uninfected as intended. The Defendants say no – all blood, derived as it is from a natural raw material, albeit then processed, is inherently risky. But the Claimants assert that persons generally are entitled to expect that all blood and blood products used for medical treatment are safe, and that they will not receive the unsafe 1 in 100. The Claimants say that this will only not be the case if the public does know and expect that blood, like cigarettes or alcohol, is or may be defective, not because the public’s expectation is limited to an expectation that legitimately expectable safety precautions will have been taken.
In a jurisdiction where, unlike Spain and Italy, and perhaps Belgium, no legislative distinction has been drawn between standard and non-standard products, the distinction, even if I were to conclude that the blood bags in this case are non-standard products, would not be absolute. Non-standard products would not be automatically defective. A product may be unsafe because it differs from the standard product, or because the standard product itself is unsafe, or at risk of being unsafe. It may however be easier to prove defectiveness if the product differs from the standard product.
Boxes
United States tort law has developed a difference between manufacturing defects, design defects and instruction defects, (the last category being irrelevant for our purposes). This was worked through in case law, though it did not appear in the Second Restatement, published in 1965, but it has been expressly incorporated into the Third Restatement, published in 1998 (section 2(a)(b)(c): Categories of Product Defects). There is almost a separate jurisprudence for manufacturing defects as opposed to design defects. A manufacturing defect is defined as being “when the product departs from its intended design even though all possible care was exercised in the preparation and marketing of the product” and a design defect as “when the foreseeable risks of harm imposed by the product could have been reduced or avoided by the adoption of a reasonable alternative design by the seller or other distributor, or a predecessor in the commercial chain of distribution, and the omission of the alternative design renders the product not reasonably safe.” The Claimants say that, in terms of that dichotomy, the infected blood here is a manufacturing defect – an error in production has led to a one-off. The Defendants say that, if a defect at all, it is a design defect, because the process as designed leads inevitably to the occasional failure as a result of an inherent defect in the raw material. In this context, so far as the academics are concerned, the Claimants appear to have the better of it. Professor Sole Feliu in his book El Concepto de Defecto del Producto en la Responsabilidad Civil del Fabricante (1997) at page 525, when addressing the question of whether blood with hepatitis is to be considered a design or manufacturing defect, following the view of American Professors Phillips and Pryor (Products Liability (1993) Vol 1 at 392), concludes (as translated from the Spanish) “since the defects occur only occasionally and since there is no design whatsoever, and since the blood as such is processed and used for the transfusion, these are rather manufacturing defects”. Professor Howells (loc. cit. at 1.14) considers that “manufacturing defects are caused by an error in the production process or by the use of defective raw materials”. However, notwithstanding that there was some use of these American terms in the travaux preparatoires, there is no place for them in the Directive. After some discussion in the course of the hearing, I am satisfied, and indeed neither Counsel contended to the contrary, that no assistance can be gained from what Mr Underhill QC called the ‘boxing’, or categorisation, of defects in this regard for the purpose of construction of the Directive, or the determination of any of the issues before me, for the following reasons among others:
As referred to above, there are no such boxes or categories in the Directive, unlike the Third Restatement.
In order to define whether the defects are manufacturing or design defects, in most cases it would be inevitable that there would require to be consideration of the precise processes adopted in production, which both sides accept to be inappropriate.
Consequently, whatever may be the position in US jurisprudence, Article 6 directs consideration of whether the product is defective, and as to what legitimate expectation is as to the safeness of the product. Whether it is appropriate to define the one infected bag of blood in one hundred as a manufacturing defect, or as an inevitable result of a chosen design process which cannot guarantee uniformity of product, the issue is still the same, namely whether the safety was provided which the public was entitled to expect in respect of that product.
The significance to my mind only arose at all in our discussions because, by virtue of the fact that many European experts in product liability, both academics and practitioners, have been steeped in the US jurisprudence, ‘rogue products’, or rather what I now call ‘non-standard products’, have been almost automatically defined by them as manufacturing defects. Given that there is a dispute between the parties in this case as to what is meant by a manufacturing defect, it seems to me sensible to concentrate simply on the concept of a standard or non-standard product. As will appear, this does appear to me to make easier the understanding of those few European decisions which there have been arising out of the Directive. In the criminal field, the UK courts have responded stringently to manufacturing errors: this appears clearly from the House of Lords decision in Smedleys Ltd v Breed [1974] AC 839, where, notwithstanding non-negligent quality control, there was strict liability at criminal law where a caterpillar identical in colour, size, density and weight to the peas in a tin survived the process in one out of three million tins: but that too would be a non-standard product.
If the distinction is between a standard and non-standard product, the critique of a non-standard product will be the same, namely by virtue of its difference from a standard product, whether it is treated as a one-off manufacturing defect or as a design defect resulting from a way in which the producer’s system was designed, which led to all the producer’s product being subject to the same risk. The approach to whether non-standard and standard products are defective may however be different, primarily because non-standard products fall to be compared principally with the standard product, while standard products, if compared at all, will be compared with other products on the market.
The Status of the Defendants
One final point with which I should deal is the fact that the Defendants are required to produce the product, in this case blood, pursuant to the obligations of the NBTS, and thus, it is said, had no alternative but to supply it to hospitals and patients, as a service to society. The Defendants submit that this is a factor to be taken into account in the ‘basket’, not least because, unlike commercial producers, they have no option to withdraw it from the market rather than incur liabilities. Quite apart from the Claimants’ overall objection to the basket if it brings in a concept anything close to a risk/utility test, the Claimants contend that, if Article 7(d) does not apply (“that the defect is due to compliance of the product with mandatory regulations issued by the public authorities”), as it is not suggested to do, then there is no automatic reason why the public’s expectation of safety should be lowered, unless such product is known to be defective, or at risk of being defective. Further there is, in any event, no necessary reason why a public authority or a non-profit making organisation should be in any different position if the product is unsafe (which proposition accords with the Opinion of the Advocate General (Colomer) in Henning Veedfald v Arhus Amstkommune [the ‘Danish Kidney Case’] Case C-203/99 at para 27, which has not yet been considered by the European Court). There is of course no ‘blood-shield’ statute in the UK.
Travaux Preparatoires
There is nothing much to assist in the travaux preparatoires, save for:
The rejection of the express US approach and risk-utility analysis (see paragraph 35 above)
The fact that the strength of the contentions in support of a defence of state of the art, and of protection for producers in the context of inevitable risks, was directed first to the introduction into the drafts, and then the expansion and exposition, of Article 7(e). It might well be said that if those lobbying for extra protection for the producer had considered that there was already substantial protection under Article 6 itself (which is not mentioned in this context in the documents in evidence) they might not have needed to fight so hard to introduce and retain Article 7(e). This probably inadmissible approach is better expressed simply as the fact that in the documents before me (and that in itself is an important caveat) there is no discussion of whether the availability (or not) or adoption (or not) of safety precautions by a producer is relevant, or a circumstance, in the context of Article 6 (nor of course is such listed at any time among the circumstances which are set out in the Article, notamment or otherwise).
Court Decisions
I turn to consider the few court decisions in Europe in which the Directive, or these issues under the Directive, have been considered or touched upon. As indicated above, these have not been many, notwithstanding the fact that the Directive and implementing legislation within the Community countries (save in France, which delayed its implementation, although its own local laws were and remained in some respects more stringent) have been in force for ten to fifteen years. Leaving aside any English decisions, to which the ordinary rules of precedent would apply, so far as relevant, I would of course pay particular attention to any European decisions, not because they are binding upon me, but because not only does respect have to be paid, on the usual principles of comity, to reasoned decisions of competent foreign courts considering the same or similar issues, whatever the nature of the legislation, but particularly so where Community courts are applying the Directive. In such a case, even though Community courts are entitled to come to different views, particularly on the facts, by reference to national and local conditions, and even though the European Court can resolve and give a final opinion upon issues where different views have been taken in different Community countries on the same legislation, nevertheless harmony is desirable, particularly where it can be said that an autonomous or Community approach or meaning is required. (See most recently the Advocate General’s Opinion in the Danish Kidney Case at paragraph 30.)
UK. On the Article 6 issues which I have to decide, Richardson is unclear. Ian Kennedy J concluded in relation to a condom, the teat end of which became detached during sexual intercourse, resulting in the pregnancy of the claimant, that “naturally enough the users’ expectation is that a condom will not fail”. But he does not then appear to have gone on to consider the actual question, being whether they were entitled so to expect. He appears to have concluded that he could not identify a harmful characteristic, either occurring in the factory (Article 7(b)) or at all. Whether that resulted from too much concentration during the trial by both parties on the method of manufacture, or whether there was an implicit finding that the fracture was caused by misuse by the claimants, is not clear, but in any event he concluded, without consideration of the issue of legitimate expectation, that the claimants’ claim failed. In the Cosytoes Case, the claimant was successful, where an elastic strap for attaching a buckle to a baby’s sleeping bag sprang back, causing the buckle to hit the baby’s brother in the eye. So far as concerns the claim under the CPA, and hence for our purposes under Article 6, the claim succeeded. Chadwick LJ at paragraph 44 emphasised that fault of the producer is irrelevant:
“It is irrelevant whether the hazard which causes the damage has come, or ought reasonably to have come, to the attention of the producer before the accident occurs. To hold otherwise is to my mind to seek to reintroduce concepts familiar in the concept of a claim in negligence at common law into a statutory regime which has been enacted in order to give effect to the … Directive.”
But he does not appear to address in terms whether the conduct of any producer would be relevant. Pill LJ left the position unclear at paragraph 27 when he concluded “Members of the public were entitled to expect better from the appellant”: but Chadwick LJ at para 45 does address himself towards the level of safety to be expected “in relation to child care products”. In neither of these two cases, however, does it appear that there was any or any full argument on the points now in issue.
Germany. In what has been called the ‘German Bottle Case’ the Bundesgerichtshof, (BGH), the German Federal Supreme Court, gave judgment on 9 May 1995, allowing an appeal by a Claimant injured as a result of an exploding mineral water bottle, resulting from a very fine hairline crack, not discovered notwithstanding what was found to be a technical and supervisory procedure in the Defendant’s factory in accordance with the very latest state of technology (including seven different inspections). Although the BGH dealt at some length with the questions under Article 7(e), to which I shall refer below, it had no difficulty, after what was obviously detailed consideration, in concluding that the harmful characteristic was a defect within Article 6 (or the German statute implementing it). The BGH concluded (translated from the German):
“The Court of Appeal [was] correct in law to assume that pursuant to [Article 6] a product is defective if it does not guarantee the degree of safety which may be expected when taking all circumstances into account. The Court of Appeal also [assumed] correctly that a consumer expects a mineral water bottle to have no obvious or even microscopic damage which might lead it to explode. The fact that it is not technically possible to detect and repair such defects in the bottle does not alter the consumer’s expectations.”
The Defendants accept that the crack in that case was plainly a manufacturing defect, capable of being described, as the BGH expressly did, as a rogue product (‘Ausreisser’) and do not contend that the decision of the BGH was wrong. They submit however that this logic does not apply to a bag of blood, which they submit to share the same characteristics as all blood, namely in that all blood bears – or bore – the 1% risk of being infected. (The BGH also rejected the producer’s arguments under Article 7(e), to which I shall return.)
Holland. The County Court of Amsterdam (not an appellate court) gave a judgment on 3 February 1999 in the case of Scholten v The Foundation Sanquin of Blood Supply. In this case the claimant received blood infected with HIV, after the introduction of HIV screening tests in that country, because of the (infinitesimal) risk in that case from blood which had been so screened but must have been given by a donor who had only just contracted HIV, such that his infection could not be detected by a test during what has been called ‘the window period’. The Court appears to have looked at the facts in that case with some care. The claimant was pointing out that the Foundation’s leaflet suggested that the chance of being infected with HIV was so small that one should consider that one would not be infected. The defendants pointed out that the media had paid a great deal of attention to the fact that blood products always carried a risk of transmitting infections, and the defendants contended that (paragraph 6 as translated from the Dutch):
“the Foundation carefully carried out investigations of the blood and followed the correct and relevant Guidance, so that one is not able to expect a greater safety of the blood product than that which can be offered by the proper compliance with the relevant regulations.”
The Court concluded, in finding for the claimant in respect of Article 6 (or the Dutch implementing equivalent), as follows:
“The Court agreed with Scholten that, taking into account the vital importance of blood products and that in principle there is no alternative, the general public expects and is entitled to expect that blood products in the Netherlands have been 100% HIV free for some time. The fact that there is a small chance that HIV could be transmitted via a blood transfusion, which the Foundation estimates at one in a million, is in the opinion of the Court not general knowledge. It cannot therefore be said that the public does not or cannot be expected to have this expectation. The fact that the Foundation acted in accordance with the relevant Guidance, and that the use of an HIV-1 RNA test at the time could not have detected the HIV virus does not have any bearing on this.”
The Defendants contend that this decision of the County Court of Amsterdam, which is obviously not in any way binding upon me, was wrong: but further or in the alternative they contend that the decision which the Court then went on to make which resulted in Scholten’s claim failing by reference to Article 7(e) (to which I shall return below) was right.
France. There are no decisions directly under the Directive in France, first because in any event the Directive was not implemented until 1998, and secondly because, as referred to above, the French national laws of product liability are in some respects more favourable to claimants. In those circumstances, although I have been referred to decisions severally in the Conseil d’Etat (1995), the Lyon Administrative Court of Appeal (1997) and the Cour de Cassation (1998) (in the last of which the Court said that they were interpreting the relevant articles of the Code Civil in the light of the Directive), in which claimants succeeded in product liability claims in respect of infected blood, it is not helpful to consider them in any detail.
Academic Literature
As I have indicated above, my attention has been drawn to a large number of learned and perceptive academic writings, much of which has been relevant to the issue before me, but upon which of course I must make up my own mind. I shall summarise what seem to me to be the most relevant:
Professor Henderson (of Boston University), writing of the US law in the Columbia Law Review (1973) Vol 73 at 1531ff, doubts in US terms the role for a judge in adjudicating design decisions. However this seems to me not inconsistent with – and may support – the conclusion that the only question should be whether the product – as designed – is unsafe, given its use and presentation and the injuries that have occurred – and not whether any other design could have been adopted to improve the safeness of the product.
Simon Whittaker (now of St John’s College, Oxford) in the early days of consideration of the Directive, and before the CPA, raised, in an article in (1985) 5 Yearbook of European Law 233ff, the question as to whether safety standards arise for consideration within Article 6, and concludes that they perhaps do; but he rewrites the Directive to represent that it is asking whether the product was ‘reasonably safe’, rather than using the words of legitimate expectation. It is in that context that he considers that it may “look as though there is no practical difference between liability in the tort of negligence and liability under the Directive” (at 246). He postulates the possibility, at 257, of evidence of compliance with safety standards being “admissible but not conclusive” under Article 6, while asserting that such “would not avail the Defendant of a defence under Article 7(e)”. On that basis, it seems to me illogical if the escape route provided should be narrower than that which it is suggested may be a main defence: for a producer would not need reliance on Article 7(e) if he had already succeeded on Article 6. I return to this further below.
Christopher Newdick, to whom I have referred above, of the University of Reading, appears to support the Claimants’ case in articles in 1987 (103 LQR 288) and 1988 (CLJ 47 (31) 455); in the former at 296-7 where he concludes:
“To excuse all … production defects … on the ground that they were undiscoverable would be to emaciate the potential of the Directive. In this respect there may be sufficient grounds for strict liability to be applied in the absence of cogent reasons of policy to the contrary.”
and in the latter at 455 in the passage which I have already quoted in paragraph 31 above.
Professor Stoppa of Rome University appears to do so also, in an article on the CPA in Legal Studies 1992 Vol 12 page 210, where he states at 212 (following Professor Alistair Clark of Strathclyde University, at page 168 of his book Product Liability (1989)): “the solution most consistent with the spirit of the Directive would seem to suggest that all products which are unsafe because of a flaw in the production process be considered defective, unless there exist statutory provisions to the contrary.” Stoppa however appears to suggest that the position may be different in relation to what he is encouraged by US jurisprudence to consider as a design defect (pp 213-217). Thus he writes:
“In relation to sophisticated or innovative design cases, it could be argued that actual consumer expectations, which could be non-existent, are not at issue, in that the Act refers to the safety which persons generally are ‘entitled’ to expect. But what are persons generally entitled to expect? It would probably be a fair assumption to say that consumers are entitled to expect, generally speaking, that all products be designed carefully and intelligently in the light of all foreseeable circumstances, with a view to manufacturing a product which is as safe as possible. Yet the questionability of such a standard, or of a similar worded one, is self-evident …
Indeed, it is submitted, a dual approach might also prove a workable solution under the [CPA]. In many design defect simple cases, as where the failure of the product [ensues] from its normal and intended use, the consumer expectations test seems to be an appropriate test. A product which causes injury when put to its core uses clearly disappoints consumer expectations, and liability should be imposed accordingly. On the other hand, in more complex cases, where a consumer expectations test is but a semantic veneer concealing each court’s own subjective assessment, a more structured balancing process of some kind seems necessary. In these cases, a risk-utility analysis would seem to be permitted by the wording of the [CPA], according to which, for the purpose of determining what ordinary consumers are entitled to expect, ‘all the circumstances’ should be taken into account.”
Christopher Hodges of Cameron McKenna, in his book Product Liability: European Laws and Practice [1993] does not appear to support Professor Stoppa’s approach in relation to design defects. At 3.019 he states: “Strict liability is likely to have a significant impact on design defect claims. A claimant no longer has the difficult task of proving faulty conduct by a manufacturer … The emphasis of the Directive is shifted to a judgment about the safety to be expected of the product itself … Liability is now imposed if something is unacceptably dangerous without it being anyone’s fault”. His subsequent paragraph at 3.023 appears not to contradict this, but simply to amount to advice to manufacturers and designers with a view to avoiding a defective design.
Professor Stapleton, to whom I have referred above, now of Australian National University, asserts that the Directive does not in practice achieve strict liability. She said so in her book Product Liability (1994) at 236: “Despite the ‘strict liability’ rhetoric in its Preamble the Directive rarely imposes more than a negligence regime on manufacturers. The origin of this surprising and not obvious result is worth pursuing in detail because of the widespread assumption in business and the legal profession that the Directive imposes strict liability on manufacturers” and again at 271-272. At the passage at page 236, she refers to the view of the then Lord of Appeal, Lord Griffiths (in extra-judicial capacity), together with two members of the staff of the Law Commission, prior to the implementation of the Directive in the UK by the CPA, in an article in the Tulane Law Review, Vol 62 at 353ff. The latter there opine (at 382) that “some element of balancing is necessary to any proper analysis of the concept of a defective product”, recite the various elements which American Courts include in the risk-utility analysis (including (footnote 122) “the manufacturer’s ability to eliminate the unsafe character of the product without impairing its usefulness or making it too expensive to maintain its utility”) and conclude that “it does not seem likely that English judges would overtly adopt [a risk-utility analysis], albeit they would as an educated response to the facts of a particular case undertake a balancing exercise of an analogous kind”. Professor Stapleton simply concludes at 236 of her book, by reference to Lord Griffiths’ suggestion, “in other words the core of the ‘defect’ enquiry will substantially parallel the issue which underlies the negligence standard … Practitioner handbooks fleshing out the standard in the Directive will therefore look remarkably like current handbooks on the substance of the duty in negligence. The only really important question to which manufacturers will need an answer concerns the strictness of the behavioural standard”.
Such a handbook in German however, by Count von Westphalen of Bielefeld University, Produkthaftungshandbuch (1990) at paragraphs 23-24 states as follows, in relation to the German implementation of Article 6 (as translated from the German):
“Since product liability … is liability irrespective of fault … the criterion of Zumutbarkeit [translated as reasonableness and by Mr Forrester QC as ‘what the producer could be expected to do’] is irrelevant. In contrast to product liability in tort … , the producer cannot rely on the fact that he could not be expected to produce a safe alternative construction, possible according to the state of science and technology. The same applies if the producer wanted to rely on the fact that the market did not accept a more expensive but safer product, or that his competitors do not respect the required, higher safety standard either. In extreme cases, the producer must stop producing the insufficiently safe product. This makes it clear that the cost-benefit analysis plays no role in determining defectiveness of a product.”
Summary
I summarise the position:
The first question of law which I have to resolve in the light of my construction of Article 6 and 7(e) is whether I need to consider and determine the issues raised by the evidence, which I have in fact heard over more than twenty days (including consideration of documents), from the Claimants and the Defendants, at the Defendants’ instance, on the ‘Brown Case’; namely as to whether in fact the Defendants did everything that could be legitimately expected of them (what might be called their ‘Zumutbarkeit’ evidence). If I consider that I do not in law need to do so, then I resolve the question of defectiveness without such evidence (‘the Forrester Case’). If I conclude that in law the evidence is admissible (but, as it happens, in any event, for the reason set out in paragraph 24 above, of possible appeals or references) then I must proceed to decide whether the Claimants have shown that the Defendants failed to do what was legitimately expected of them (the Brown Case). If I find that the product was defective on the Forrester case, the defect is, on any basis, infection by Hepatitis C. If however I find it defective on the Brown Case, on the basis that the Defendants failed to test or screen early enough, then the Claimants would say the defect is the same, but the Defendants would then say that the defect is the ‘unscreenedness’ of the blood. This dispute as to the precise description of the defect is only relevant for the purposes of the issues of causation and/or quantification of loss, to which I come below, and I shall return to it and resolve it only in that context.
The onus of proof on Article 6 is on the Claimants. The Defendants submit that if the Claimants were right about Article 6, because ‘unavoidability’ would not then assist them to avoid liability, Article 7(e) should certainly then be so construed as to exclude them from liability: and conversely if Article 7(e) is too limited to enable them to be exonerated, all the more should Article 6 be construed in their favour. I turn therefore to consider Article 7(e) before I reach my conclusions.
ARTICLE 7(e)
I repeat, for the sake of convenience at this stage, Article 7(e):
“The producer shall not be liable as a result of this Directive if he proves … that 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.”
This defence, for such it is, being an escape clause for the producer, the onus being upon the producer, has been called by the Claimants (as it is in most academic literature) the development risks defence, which is how it was usually described during the working through of the Directive, as is apparent from the travaux preparatoires; and by the Defendants the ‘discoverability’ defence, both because that concept is certainly an express and significant part of the Defence, whatever it relates to, as will be seen, but also because it aids, as the Defendants see it, their construction of the Article. I propose, neutrally, simply to call it the ‘Article 7(e) defence’. Once again there is a great deal of common ground, not least because in relation to this Article there is in certain respects binding authority and guidance from the European Court (Commission v UK).
Such common ground is as follows:
The state of scientific and technical knowledge referred to is the most advanced available (to any one, not simply to the producer in question), but it must be ‘accessible’. In response to a more extreme position being taken by the Commission, the Advocate General answered as follows, in his Opinion in Commission v UK at paragraphs 22-24, which, although not expressly approved in the judgment of the European Court, is taken to be the state of the law:
“22. Where in the whole gamut of scientific opinion at a particular time there is also one isolated opinion (which, as the history of science shows, might become, with the passage of time, opinio communis) as to the potentially defective and/or hazardous nature of the product, the manufacturer is no longer faced with an unforeseeable risk, since, as such, it is outside the scope of the rules imposed by the directive.
23. The aspect which I have just been discussing is closely linked with the question of the availability of scientific and technical knowledge, in the sense of the accessibility of the sum of knowledge at a given time to interested persons. It is undeniable that the circulation of information is affected by objective factors, such as, for example, its place of origin, the language in which it is given and the circulation of the journals in which it is published. To be plain, there exist quite major differences in point of the speed in which it gets into circulation and the scale of its dissemination between a study of a researcher in a university in the United States published in an international English-language journal and, to take an example given by the Commission, similar research carried out by an academic in Manchuria published in the local scientific journal in Chinese which does not go outside the boundaries of the region.
24. In such a situation, it would be unrealistic, I would say unreasonable, to take the view that the study published in Chinese has the same chances as the other of being known to a European product manufacturer. So, I do not consider that in such a case a producer could be held liable on the ground that at the time at which he put the product into circulation the brilliant Asian researcher had discovered the defect in it. More generally, the ‘state of knowledge’ must be construed so as to include all data in the information circuit of the scientific community as a whole, bearing in mind, however, on the basis of a reasonableness test the actual opportunities for the information to circulate.”
It is not entirely clear what in practice is meant by the ‘Manchuria exception’. I put to Counsel, in the course of argument, that if in fact the product in question were a product for which Manchuria was renowned, perhaps yoghurt or fabric, then Manchuria itself would be a bad example: if however it were a product of particularly high technology then it might well be wholly unlikely that Manchuria would have thought something up. It seems to me that the right approach is to look at ‘accessibility’ and to regard as Manchuria perhaps an unpublished document or unpublished research not available to the general public, retained within the laboratory or research department of a particular company. Fortunately the issue does not arise in this case.
The Article is not concerned with the conduct or knowledge of individual producers. As the Court made clear at paragraph 29:
“The producer of a defective product must prove that the objective state of scientific and technical knowledge, including the most advanced level of such knowledge, at the time when the product was put into circulation, was not such as to enable the existence of a defect to be discovered.”
It is clear from the passage which I have already quoted, in paragraph 20 above, in paragraph 36 of the Court’s judgment that: “the availability of the defence [does not depend] on the subjective knowledge of a producer taking reasonable care in the light of the standard precautions taken in the industrial sector in question.”
The relevant time to assess the state of such scientific and technical knowledge is the time when the product was put into circulation.
Whether or not the defect for the purposes of Article 6 should be defined as ‘unscreenedness’ as discussed in paragraph 46(i) above, there is no dispute that the defect for the purposes of Article 7(e) is its infection by Hepatitis C (and of course the Claimants rely on this, when this dispute becomes relevant, as a further argument, based on consistency in the construction of the Directive, why the Defendants’ such definition of defect in Article 6 is wrong).
….
CONCLUSIONS ON ARTICLE 6
I do not consider it to be arguable that the consumer had an actual expectation that blood being supplied to him was not 100% clean, nor do I conclude that he had knowledge that it was, or was likely to be, infected with Hepatitis C. It is not seriously argued by the Defendants, notwithstanding some few newspaper cuttings which were referred to, that there was any public understanding or acceptance of the infection of transfused blood by Hepatitis C. Doctors and surgeons knew, but did not tell their patients unless asked, and were very rarely asked. It was certainly, in my judgment, not known and accepted by society that there was such a risk, which was thus not sozialadäquat (socially acceptable), as Professor Taschner and Count von Westphalen would describe such risks: Taschner/Riesch Produkthaftungsgesetz und EG Produkthaftungsrichtlinie [(2nd Ed.) at 291] and von Westphalen loc. cit. at 27. Thus blood was not, in my judgment, the kind of product referred to in the Flesch/Davenant Question and Answer in the European Parliament i.e., “… a product which by its very nature carries a risk and which has been presented as such (instructions for use, labelling, publicity, etc.)”, “… risks which are … inherent in [a] product and generally known”: nor as referred to by Professor Howells (loc. cit.) at 1.17 as being risks which “consumers can be taken to have chosen to expose themselves to in order to benefit from the product”.
I do not consider that the legitimate expectation of the public at large is that legitimately expectable tests will have been carried out or precautions adopted. Their legitimate expectation is as to the safeness of the product (or not). The Court will act as what Dr Bartl called the appointed representative of the public at large, but in my judgment it is impossible to inject into the consumer’s legitimate expectation matters which would not by any stretch of the imagination be in his actual expectation. He will assume perhaps that there are tests, but his expectations will be as to the safeness of the blood. In my judgment it is as inappropriate to propose that the public should not ‘expect the unattainable’ – in the sense of tests or precautions which are impossible – at least unless it is informed as to what is unattainable or impossible, as it is to reformulate the expectation as one that the producer will not have been negligent or will have taken all reasonable steps.
In this context I turn to consider what is intended to be included within ‘all circumstances’ in Article 6. I am satisfied that this means all relevant circumstances. It is quite plain to me that (albeit that Professor Stapleton has been pessimistic about its success) the Directive was intended to eliminate proof of fault or negligence. I am satisfied that this was not simply a legal consequence, but that it was also intended to make it easier for claimants to prove their case, such that not only would a consumer not have to prove that the producer did not take reasonable steps, or all reasonable steps, to comply with his duty of care, but also that the producer did not take all legitimately expectable steps either. In this regard I note paragraph 16 of the Advocate General’s Opinion in Commission v UK at 487 where, in setting out the background to the Directive, he pointed out that:
“Albeit injured by a defective product, consumers were in fact and too often deprived of an effective remedy, since it proved very difficult procedurally to prove negligence on the part of the producer, that is to say, that he failed to take all appropriate steps to avoid the defect arising.”
The European Court in its judgment perhaps refers implicitly to this when it states at paragraph 24:
“In order for a producer to incur liability for defective products under Article 4 of the Directive, the victim must prove the damage, the defect and the causal relationship between defect and damage, but not that the producer was at fault.”
It seems to me clear that, even without the full panoply of allegations of negligence, the adoption of tests of avoidability or of legitimately expectable safety precautions must inevitably involve a substantial investigation. What safety precautions or tests were available or reasonably available? Were they tests that would have been excessively expensive? Tests which would have been more expensive than justified the extra safety achieved? Are economic or political circumstances or restrictions to be taken into account in legitimate expectability? Once it is asserted that it is legitimately expectable that a certain safety precaution should have been taken, then the producer must surely be able to explain why such was not possible or why he did not do it; in which case it will then be explored as to whether such tests would or could have been carried out, or were or would have been too expensive or impracticable to carry out. If risk and benefit should be considered, then it might be said that, the more beneficial the product, the lower the tolerable level of safety; but this could not be arrived at without consideration as to whether, beneficial or not, there would have nevertheless been a safer way of setting about production or design. As Mr Brown QC pointed out, even if an alleged impracticability is put forward by a producer, it would still be possible to go back further, and see why it was impracticable, and whether earlier or different research and expenditure could not have resolved the problem.
Mr Underhill QC submitted that he accepted that liability was irrespective of fault and that investigation of negligence was inappropriate, and that that was not the exercise he submitted the Court was involved in. No criticisms were being made of the Defendants on the basis that they were negligent. The investigation that was being carried out was not as it would have been in a negligence action, as to what steps actually taken by these Defendants were negligent, so that their individual acts and omissions were not being investigated. However, many of Mr Underhill QC’s submissions were indistinguishable from those that he would have made had a breach of a duty of care – albeit one with a high standard of care, so that breach of it might not carry any stigma or criticism – been alleged against him. Did the Defendants act reasonably in doing, or not doing, may often have been carefully replaced by ‘can it be legitimately expected that …?’: but often the language of reasonableness – or Zumutbarkeit – crept in. I quote from his closing submissions:
“The exercise necessarily involves concepts such as proportionality and reasonableness which are encountered in the law of negligence, and in particular in relation to the standard of care in a duty-situation. But it remains a fundamentally different exercise, addressed to a different question. The Claimant does not have to be concerned with the producer’s conduct at all. He does not have to adduce, or rebut, evidence about how the process or choice which led to the product having the characteristic complaint. He has only to persuade the court that a product with that characteristic fell below the level of safety that persons generally are entitled to expect as the Community standard. English law traditionally distinguishes between different degrees of reasonableness (typically characterised as ‘ordinary reasonableness’ and ‘Wednesbury reasonableness’). Such distinction should not be pressed too far in the exercise of judgment required by the Directive. But it will be entirely legitimate for a Court in deciding the correct standard in a given case to recognise that views may legitimately differ as to exactly where the line is to be drawn and there may be a range of reasonable responses (both as to substance and as to the timing of the introduction of any safety feature).”
Even from this carefully argued passage it can in my judgment be seen that there is no sufficient distinction between what Mr Underhill QC accepts is impermissible and what he is inviting the Court to do. As Mr Brown QC pointed out, certain of Mr Underhill QC’s formulations differ hardly at all from that enunciated by Lord Reid as being the issue in negligence in Morris v West Hartlepool Steam Navigation Co Ltd [1956] AC 552 at 574, namely:
“It is the duty of an employer, in considering whether some precaution should be taken against a foreseeable risk, to weigh, on the one hand, the magnitude of the risk, the likelihood of an accident happening and the possible seriousness of the consequences if an accident does happen, and, on the other hand, the difficulty and expense and any other disadvantage of taking the precaution.”
What is more, I have the inestimable advantage of not addressing this hypothetically, for the proof is in the pudding. In the twenty days or so evidence that I have heard, it is clear to me that I am being invited to conclude what the legitimately expectable [reasonable] producer would have been legitimately expected to do [should have done] in relation to the safety of blood between 1988 and 1991: then I am being invited to set against what happened (no surrogate tests and no screening until September 1991) the legitimately expected scenario, albeit that would be the same, as the Defendants would assert, or would be different and earlier, as the Claimants would assert. As was inevitable, the carefully constructed distinctions occasionally blurred in the course of a long trial and lengthy submissions, such that for example Mr Underhill QC would perfectly understandably submit (Day 7, page 105 of the transcript): “I think it would be unusual to have a situation in which you held that everything we had done was reasonable, but nevertheless the public was entitled to expect a different outcome”. Having heard the evidence of Zumutbarkeit over some twenty days, I pay tribute to the fact that both parties were careful never to address head on the issue of negligence, the Claimants noteworthily eschewing any such suggestion, and I am well aware that the investigation would have been wider and longer if it had expressly been based in negligence.
As will be clear when I consider Issue II below, it is by no means easy to settle on a test for what is to be legitimately expected in the way of safety precautions, or extra or alternative safety precautions, assuming that to be appropriate. Must they be taken if they are available, or reasonably available, or not if there are two ‘schools of thought’, or only if as Mr Underhill QC put it, it was “plainly the right thing for a blood transfusion service to do”? It has been quite clear to me that the Claimants have had, on the trial of the facts before me, to prove, on the Brown Case, that the Defendants ought to have acted differently from the way they did: not on a day by day, or month by month basis, assessing their individual conduct, but simply on the basis that tests ought to have been introduced differently and earlier. I am satisfied that Mr Forrester QC was right to refer to Senator Huey Long’s duck: namely ‘If it looks like fault, and it quacks like fault then [to all intents and purposes] it is fault.’
I conclude therefore that avoidability is not one of the circumstances to be taken into account within Article 6. I am satisfied that it is not a relevant circumstance, because it is outwith the purpose of the Directive, and indeed that, had it been intended that it would be included as a derogation from, or at any rate a palliation of, its purpose, then it would certainly have been mentioned; for it would have been an important circumstance, and I am clear that, irrespective of the absence of any word such as notamment in the English language version of the Directive, it was intended that the most significant circumstances were those listed.
This brings me to a consideration of Article 7(e) in the context of consideration of Article 6. Article 7(e) provides a very restricted escape route, and producers are, as emphasised in Commission v UK, unable to take advantage of it, unless they come within its very restricted conditions, whereby a producer who has taken all possible precautions (certainly all legitimately expectable precautions, if the terms of Article 6, as construed by Mr Underhill QC, are to be cross-referred) remains liable unless that producer can show that ‘the state of scientific and technical knowledge [anywhere and anyone’s in the world, provided reasonably accessible] was not such as to enable the existence of the defect to be discovered’. The significance seems to be as follows. Article 7(e) is the escape route (if available at all) for the producer who has done all he could reasonably be expected to do (and more); and yet that route is emphatically very restricted, because of the purpose and effect of the Directive (see particularly paragraphs 26, 36 and 38 of the European Court’s judgment). This must suggest a similarly restricted view of Article 6, indeed one that is even more restricted, given the availability of the (restricted) Article 7(e) escape route. If that were not the case, then if the Article 7(e) defence were excluded, an option permitted (and indeed taken up, in the case of Luxembourg and Finland) for those Member States who wish to delete this “exonerating circumstance” as “unduly restricting the protection of the consumer” (Recital 16 and Article 15), then, on the Defendants’ case, an even less restrictive ‘exonerating circumstance’, and one available even in the case of risks known to the producer, would remain in Article 6; and indeed one where the onus does not even rest on the Defendant, but firmly on the Claimant.
Further, in my judgment, the infected bags of blood were non-standard products. I have already recorded that it does not seem to me to matter whether they would be categorised in US tort law as manufacturing or design defects. They were in any event different from the norm which the producer intended for use by the public:
I do not accept that all the blood products were equally defective because all of them carried the risk. That is a very philosophical approach. It is one which would, as Mr Forrester QC pointed out, be equally apt to a situation in which one tyre in one million was defective because of an inherent occasional blip in the strength of the rubber’s raw material. The answer is that the test relates to the use of the blood bag. For, and as a result of, the intended use, 99 out of 100 bags would cause no injury and would not be infected, unlike the one hundredth.
Even in the case of standard products such as drugs, side-effects are to my mind only capable of being ‘socially acceptable’ if they are made known. Mr Underhill QC submitted in his Closing Submissions that blood products:
“are drugs; they are given only by doctors; they are given typically in life-or-death situations; they are a natural product derived from the blood of another person and known therefore inevitably to carry the risk of transmitting pathogenic agents from the donor. The known risk of the presence of a virus in a BP does not represent a falling below intended manufacturing or production standards: it is inherent in the nature of the product.”
But I am satisfied, as I have stated above, that the problem was not known to the consumer. However, in any event, I do not accept that the consumer expected, or was entitled to expect, that his bag of blood was defective even if (which I have concluded was not the case) he had any knowledge of any problem. I do not consider, as Mr Forrester QC put it, that he was expecting or entitled to expect a form of Russian roulette. That would only arise if, contrary to my conclusion, the public took that as socially acceptable (sozialadäquat). For such knowledge and acceptance there would need to be at the very least publicity and probably express warnings, and even that might not, in the light of the no-waiver provision in Article 12 set out above, be sufficient.
Accordingly I am quite clear that the infected blood products in this case were non-standard products (whether on the basis of being manufacturing or design defects does not appear to me to matter). Where, as here, there is a harmful characteristic in a non-standard product, a decision that it is defective is likely to be straightforward, and I can make my decision accordingly. However the consequence of my conclusion is that ‘avoidability’ is also not in the basket of circumstances, even in respect of a harmful characteristic in a standard product. So I shall set out what I consider to be the structure for consideration under Article 6. It must be emphasised that safety and intended, or foreseeable, use are the lynchpins: and, leading on from these, what legitimate expectations there are of safety in relation to foreseeable use:
I see no difficulty, on that basis, in an analysis which is akin to contract or warranty. Recital 6 (“… the defectiveness of the product should be determined by reference not to its fitness for use but to the lack of the safety which the public at large are entitled to expect”) does not in my judgment counter-indicate an approach analogous to contract, but is concerned to emphasise that it is safety which is paramount.
In the circumstances, there may in a simple case be a straightforward answer to the Article 6 question, and the facts may be sufficiently clear. But an expert may be needed (and they were instructed in Richardson, Cosytoes and the German Bottle Case). For Article 6 purposes, the function of such expert would be, in my judgment, to describe the composition or construction of the product and its effect and consequence in use: not to consider what could or should have been done, whether in respect of its design or manufacture, to avoid the problem (that may be relevant in relation to Article 7(e), if that arises).
In the following analysis I ignore questions that may obviously arise, either by way of ‘exoneration’ in respect of other heads of Article 7 or in respect of misuse or contributory negligence (Article 8, set out in paragraph 16 above).
The first step must be to identify the harmful characteristic which caused the injury (Article 4). In order to establish that there is a defect in Article 6, the next step will be to conclude whether the product is standard or non-standard. This will be done (in the absence of admission by the producer) most easily by comparing the offending product with other products of the same type or series produced by that producer. If the respect in which it differs from the series includes the harmful characteristic, then it is, for the purpose of Article 6, non-standard. If it does not differ, or if the respect in which it differs does not include the harmful characteristic, but all the other products, albeit different, share the harmful characteristic, then it is to be treated as a standard product.
Non-standard Products
The circumstances specified in Article 6 may obviously be relevant – the product may be a second – as well as the circumstances of the supply. But it seems to me that the primary issue in relation to a non-standard product may be whether the public at large accepted the non-standard nature of the product – i.e., they accept that a proportion of the products is defective (as I have concluded they do not in this case). That, as discussed, is not of course the end of it, because the question is of legitimate expectation, and the Court may conclude that the expectation of the public is too high or too low. But manifestly questions such as warnings and presentations will be in the forefront. However I conclude that the following are not relevant:
Avoidability of the harmful characteristic – i. e. impossibility or unavoidability in relation to precautionary measures.
The impracticality, cost or difficulty of taking such measures.
The benefit to society or utility of the product: (except in the context of whether – with full information and proper knowledge – the public does and ought to accept the risk).
Lord Griffiths et al. in their 1988 article appear to accept (at 382) that an overt approach by English judges to consider these latter factors would not be likely, but I do not conclude that they enter into the exercise at all. This is obviously a tough decision for any common lawyer to make. But I am entirely clear that this was the purpose of the Directive, and that without the exclusion of such matters (subject only to the limited defence of Article 7(e)) it would not only be toothless but pointless.
The submissions of Mr Underhill QC threw up an anomaly. As part of his submission that unavoidability is material, he contended that there may be a situation in which a claimant might wish to suggest that a harmful product, supplied with a warning, could yet have been manufactured or designed in other ways in order to avoid the harmful characteristic of which the warning was given. Mr Forrester QC eschews this opportunity on behalf of consumers. It seems to me that is right. The issue of avoidability is as immaterial at the instance of the consumer as it is of the producer (though of course the consumer could always put forward an alternative claim in negligence if he wished to shoulder the burden both of proof and evidential investigation). The problem is most unlikely to arise in any event in relation to a non-standard product, where the other, standard, products will in any event be pointed to, and the warning would itself have to point out the risk of deviation from the norm. However in relation to a standard product, the problem may again not arise if there is an alternative product without the defect, with which the product with the warning can then be compared, and the question of acceptance of the risk or legitimate expectation of safety can be assessed, once again without going into any questions of avoidability. However, even where no such comparability is available, it seems to me clear that, whether or not there could have been some other way of manufacturing or designing the product, the social acceptability of the actual product, as it in fact was, must be tested against the background of the warnings that were in fact given. Warnings can never in any event amount to a waiver, because of Article 12.
Standard Products
If a standard product is unsafe, it is likely to be so as a result of alleged error in design, or at any rate as a result of an allegedly flawed system. The harmful characteristic must be identified, if necessary with the assistance of experts. The question of presentation/time/circumstances of supply/social acceptability etc. will arise as above. The sole question will be safety for the foreseeable use. If there are any comparable products on the market, then it will obviously be relevant to compare the offending product with those other products, so as to identify, compare and contrast the relevant features. There will obviously need to be a full understanding of how the product works – particularly if it is a new product, such as a scrid, so as to assess its safety for such use. Price is obviously a significant factor in legitimate expectation, and may well be material in the comparative process. But again it seems to me there is no room in the basket for:
what the producer could have done differently:
whether the producer could or could not have done the same as the others did.
Once again there are areas of anomaly. The first is the same as I have discussed in respect of non-standard products, where the claimant might have wished to allege unavoidability. The second area arises out of Article 6.2, which I repeat for convenience:
“A product shall not be considered defective for the sole reason that a better product is subsequently put into circulation.”
In the comparative process, the claimant may point to a product which is safer, but which the producer shows to be produced five years later. Particularly if no other contemporary product had these features, this is likely to be capable of being established, and insofar as such product has improved safety features which have only evolved later in time, they should be ignored, as a result of Article 6.2. The claimant might however want to allege that the later safety features could have been developed earlier by the producer. That would obviously amount to the claimant running the evidence of ‘should have done’, to which the producer would no doubt respond ‘could not have done’. This would however once again go to the issue of avoidability, which I have concluded to be outside the ambit of Article 6, and so once again if the claimant really wanted to do so he could run the point, but only in negligence.
I can accept that resolution of the problem of the defective standard product will be more complex than in the case of a non-standard product. This trial has been in respect of what I am satisfied to be a non-standard product, and I see, after a three month hearing, no difficulty in eliminating evidence of avoidability from Article 6. It may be that, if I am right in my analysis, and if it is followed in other cases, problems may arise in the consideration of a standard product on such basis, but I do not consider any such problems will be insurmountable if safety, use and the identified circumstances are kept in the forefront of consideration. Negligence, fault and the conduct of the producer or designer can be left to the (limited) ambit of Article 7(e), to which I now turn.
CONCLUSIONS ON ARTICLE 7(e)
As to construction:
I note (without resolving the question) the force of the argument that the defect in Article 7(b) falls to be construed as the defect in the particular product; but I do not consider that to be determinative of the construction of Article 7(e), and indeed I am firmly of the view that such is not the case in Article 7(e).
The analysis of Article 7(e), with the guidance of Commission v UK, seems to me to be entirely clear. If there is a known risk, i.e., the existence of the defect is known or should have been known in the light of non-Manchurianly accessible information, then the producer continues to produce and supply at his own risk. It would, in my judgment, be inconsistent with the purpose of the Directive if a producer, in the case of a known risk, continues to supply products simply because, and despite the fact that, he is unable to identify in which if any of his products that defect will occur or recur, or, more relevantly in a case such as this, where the producer is obliged to supply, continues to supply without accepting the responsibility for any injuries resulting, by insurance or otherwise.
The existence of the defect is in my judgment clearly generic. Once the existence of the defect is known, then there is then the risk of that defect materialising in any particular product.
The purpose of the Directive, from which Article 7(e) should obviously not derogate more than is necessary (see Recital 16) is to prevent injury, and facilitate compensation for injury. The Defendants submit that this means that Article 7(e) must be construed so as to give the opportunity to the producer to do all he can in order to avoid injury: thus concentrating on what can be done in relation to the particular product. The Claimants submit that this will rather be achieved by imposing obligation in respect of a known risk irrespective of the chances of finding the defect in the particular product, and I agree.
The purpose of Article 7(e) was plainly not to discourage innovation, and to exclude development risks from the Directive, and it succeeds in its objective, subject to the very considerable restrictions that are clarified by Commission v UK: namely that the risk ceases to be a development risk and becomes a known risk not if and when the producer in question (or, as the CPA inappropriately sought to enact in Section 4(1)(e) “a producer of products of the same description as the product in question”) had the requisite knowledge, but if and when such knowledge were accessible anywhere in the world outside Manchuria. Hence it protects the producer in respect of the unknown (inconnu). But the consequence of acceptance of the Defendants’ submissions would be that protection would also be given in respect of the known.
The effect is, it seems to me, not, as the BGH has been interpreted as concluding (or perhaps as it did conclude, but if it did then I would respectfully differ) that non-standard products are incapable of coming within Article 7(e). Non-standard products may qualify once – i.e. if the problem which leads to an occasional defective product is (unlike the present case) not known: this may perhaps be more unusual than in relation to a problem with a standard product, but does not seem to me to be an impossible scenario. However once the problem is known by virtue of accessible information, then the non-standard product can no longer qualify for protection under Article 7(e).
THE RESULT IN LAW ON ISSUE I
Unknown risks are unlikely to qualify by way of defence within Article 6. They may however qualify for Article 7(e). Known risks do not qualify within Article 7(e), even if unavoidable in the particular product. They may qualify within Article 6 if fully known and socially acceptable.
The blood products in this case were non-standard products, and were unsafe by virtue of the harmful characteristics which they had and which the standard products did not have.
They were not ipso facto defective (an expression used from time to time by the Claimants) but were defective because I am satisfied that the public at large was entitled to expect that the blood transfused to them would be free from infection. There were no warnings and no material publicity, certainly none officially initiated by or for the benefit of the Defendants, and the knowledge of the medical profession, not materially or at all shared with the consumer, is of no relevance. It is not material to consider whether any steps or any further steps could have been taken to avoid or palliate the risk that the blood would be infected.
I am satisfied that my conclusions, if not all of my reasoning, are consistent with the decision of the BGH, and with the views of the majority if not all of the academic writers. Insofar as they are inconsistent with the views of Professor Stapleton as to the effect of the Directive, I rather consider that I have confounded her pessimism than disappointed her expectations.
The Consequence
In those circumstances the Claimants recover against the Defendants because their claim succeeds within Article 4, the blood bags being concluded to be defective within Article 6, and Article 7(e) does not avail.
But I must, as set out above, proceed in any event to consider the Zumutbarkeit or avoidability arguments (Issue II), which I have found to be immaterial and unnecessary. The main issue is whether the public at large would legitimately expect that different steps would have been taken by way of safety precautions and in particular that:
the anti-Hep C assay would be introduced earlier than it was and/or as early as January 1990, as the Claimants assert.
surrogate tests would be introduced in the UK by March 1988 and would continue until at least April 1991: continuing alongside the assay if and insofar as the assay were itself introduced prior to that date.
In the light of my construction of Article 7(e), and the conclusion that the risk of Hepatitis C infection was known, the Article 7(e) defence does not arise. However I must on a similar basis also nevertheless address Article 7(e), and decide, in the light of the same evidence, Issue IV, namely whether the Defendants can prove that they would not have been enabled to discover the existence of the infection in the particular product by virtue of the scientific and technical knowledge at the time, i.e. the assay, as the Claimants would assert as from 1 December 1989 (when Japan had introduced it), or surrogate testing as from 1 March 1988.
Commission of the European Communities v United Kingdom
[1997] EUECJ C-300/95
In order for a producer to incur liability for defective products under Directive 85/374, the victim does not have to prove that the producer was at fault; however, in accordance with the principle of fair apportionment of risk between the injured person and the producer set forth in the seventh recital in the preamble to the directive, the producer has a defence if he can prove certain facts exonerating him from liability, including `that 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’. Whilst the producer has to prove that the objective state of scientific and technical knowledge, including the most advanced level of such knowledge, without any restriction as to the industrial sector concerned, was not such as to enable the existence of the defect to be discovered, in order for the relevant knowledge to be successfully pleaded as against the producer, that knowledge must have been accessible at the time when the product in question was put into circulation.
A national implementing provision to the effect that the producer has a defence if he can prove that the state of such knowledge was `not such that a producer of products of the same description as the product in question might be expected to have discovered the defect if it had existed in his products while they were under his control’ is not manifestly contrary to that Community rule. The argument that such national provision permits account to be taken of the subjective knowledge of a producer taking reasonable care, having regard to the standard precautions taken in the industrial sector in question, selectively stresses particular terms used in the provision without demonstrating that the general legal context of the provision at issue fails effectively to secure full application of the directive.
In Case C-300/95,
Commission of the European Communities, represented by Peter Oliver, of its Legal Service, acting as Agent, and Mark Mildred, Solicitor, with an address for service in Luxembourg at the office of Carlos Gómez de la Cruz, of its Legal Service, Wagner Centre, Kirchberg,
applicant,
v
United Kingdom of Great Britain and Northern Ireland, represented by John E. Collins, of the Treasury Solicitor’s Department, acting as Agent, and K. Paul E. Lasok QC, with an address for service in Luxembourg at the British Embassy, 14 Boulevard Roosevelt,
defendant,
APPLICATION for a declaration that, by failing to take all the measures necessary to implement Council Directive 85/374/EEC of 25 July 1985 on the approximation of the laws, regulations and administrative provisions of the Member States concerning liability for defective products (OJ 1985 L 210, p. 29), in particular Article 7(e) thereof, the United Kingdom has failed to fulfil its obligations under that directive and under the EC Treaty,
THE COURT
(Fifth Chamber),
composed of: J.C. Moitinho de Almeida, President of the Chamber, C. Gulmann, D.A.O. Edward, J.-P. Puissochet and M. Wathelet (Rapporteur), Judges,
Advocate General: G. Tesauro,
Registrar: H.A. Rühl, Principal Administrator,
having regard to the Report for the Hearing,
after hearing oral argument from the parties at the hearing on 7 November 1996,
after hearing the Opinion of the Advocate General at the sitting on 23 January 1997,
gives the following
Judgment
1 By application lodged at the Court Registry on 20 September 1995, the Commission of the European Communities brought an action under Article 169 of the EC Treaty for a declaration that, by failing to take all the measures necessary to implement Council Directive 85/374/EEC of 25 July 1985 on the approximation of the laws, regulations and administrative provisions of the Member States concerning liability for defective products (OJ 1985 L 210, p. 29; `the Directive’), in particular Article 7(e) thereof, the United Kingdom has failed to fulfil its obligations under that directive and under the EC Treaty.
2 The object of the Directive is to bring about approximation of the laws of the Member States concerning liability for defective products, divergences in which may `distort competition and affect the movement of goods within the common market and entail a differing degree of protection of the consumer against damage caused by a defective product to his health or property’ (first recital in the preamble).
3 According to Article 1 of the Directive, the producer shall be liable for damage caused by a defect in his product.
4 Article 4 provides that the injured person shall be required to prove the damage, the defect and the causal relationship between defect and damage.
5 However, Article 7 sets out a number of defences enabling the producer to avoid liability. The seventh recital in the preamble to the Directive states in this connection that `a fair apportionment of risk between the injured person and the producer implies that the producer should be able to free himself from liability if he furnishes proof as to the existence of certain exonerating circumstances’.
6 Accordingly,
`The producer shall not be liable as a result of this Directive if he proves:
…
(e) that 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;
…’.
7 Under Article 19 of the Directive, Member States were required to take the measures necessary to comply with it by no later than 30 July 1988. The United Kingdom implemented the Directive by means of Part I of the Consumer Protection Act 1987 (`the Act’), which came into force on 1 March 1988.
8 Section 1(1) of the Act is worded as follows:
`This Part shall have effect for the purpose of making such provision as is necessary to comply with the product liability Directive and shall be construed accordingly.’
9 Section 4(1)(e), which purports to implement Article 7(e) of the Directive, provides as follows:
`In any civil proceedings by virtue of this Part against any person … in respect of a defect in a product it shall be a defence for him to show
…
(e) that the state of scientific and technical knowledge at the relevant time was not such that a producer of products of the same description as the product in question might be expected to have discovered the defect if it had existed in his products while they were under his control’.
10 The Commission took the view that the Act did not properly transpose the Directive and, on 26 April 1989, sent the United Kingdom Government a letter of formal notice in accordance with the procedure laid down by Article 169 of the Treaty, requesting it to submit its observations on six complaints listed therein within a period of two months.
11 By letter dated 19 July 1989, the United Kingdom denied the Commission’s allegations. Although it accepted that the wording of the Act was different from that of the Directive, it argued that under Article 189 of the EEC Treaty Member States were entitled to choose appropriate wording when implementing a directive, provided that the intended result of the directive was achieved.
12 On 2 July 1990, the Commission addressed a reasoned opinion to the United Kingdom pursuant to Article 169 of the Treaty. It accepted the right of a Member State to choose its own wording to implement a directive, provided that the national rules achieved the intended result. Nevertheless, it maintained its position with respect to all but one of the six complaints set out its letter of formal notice.
13 By letter of 4 October 1990, the United Kingdom reiterated its view that the Directive was correctly implemented by the Act.
14 The United Kingdom’s arguments persuaded the Commission that four of its remaining complaints should be abandoned, particularly in view of the rule in section 1(1) of the Act under which the relevant provisions were to be construed in conformity with the Directive.
15 However, considering that the wording of section 4(1)(e) was unambiguous and would have to be interpreted contra legem by the courts in the United Kingdom in order to conform to the Directive, the Commission decided to seek a ruling from the Court on the compatibility of section 4(1)(e) of the Act with Article 7(e) of the Directive.
16 In its application, the Commission argues that the United Kingdom legislature has broadened the defence under Article 7(e) of the Directive to a considerable degree and converted the strict liability imposed by Article 1 of the Directive into mere liability for negligence.
17 The Commission submits that the test in Article 7(e) of the Directive is objective in that it refers to a state of knowledge, and not to the capacity of the producer of the product in question, or to that of another producer of a product of the same description, to discover the defect. However, by its use of the words `a producer of products of the same description as the product in question [who] might be expected to have discovered the defect’, section 4(1)(e) of the Act presupposes a subjective assessment based on the behaviour of a reasonable producer. It is easier for the producer of a defective product to demonstrate, under section 4(1)(e), that neither he nor a producer of similar products could have identified the defect at the material time, provided that the standard precautions in the particular industry were taken and there was no negligence, than to show, under Article 7(e), that the state of scientific and technical knowledge was such that no-one would have been able to discover the defect.
18 The Commission adds that, whilst section 1(1) of the Act constitutes a most helpful indication to British courts, it cannot suffice to render lawful language which clearly on its face runs counter to the wording of the Directive and could be construed consistently with the Directly only by interpreting it contra legem.
19 The United Kingdom Government does not challenge the Commission’s interpretation of Article 7(e) of the Directive as setting out an `objective’ and not a `subjective’ test. It considers, however, that section 4(1)(e) of the Act sets out the same test as Article 7(e) of the Directive and does not provide for liability founded on negligence.
20 The Government submits that, in so far as Article 7(e) can be interpreted in the abstract in a factual vacuum, it lays down an `objective’ test in the sense that the `state of scientific and technical knowledge’ mentioned therein does not refer to what the producer in question actually knows or does not know, but to the state of knowledge which producers of the class of the producer in question, understood in a generic sense, may objectively be expected to have. This is precisely the meaning of section 4(1)(e) of the Act.
21 The United Kingdom Government points out that, in any event, courts in the United Kingdom are required to interpret section 4(1)(e) consistently with Article 7(e) by virtue of section 1(1) of the Act or the general principle that legislation implementing Community law should be construed so as to accord therewith.
22 It argues that, in view of section 1(1) of the Act and the absence of any decision of a national court on the meaning of section 4(1)(e), the Commission is not in a position to say that it is incompatible with Article 7(e). It could succeed in its argument only if could show conclusively that section 4(1)(e) is completely incapable of bearing the same legal meaning as Article 7(e).
23 In order to determine whether the national implementing provision at issue is clearly contrary to Article 7(e) as the Commission argues, the scope of the Community provision which it purports to implement must first be considered.
24 In order for a producer to incur liability for defective products under Article 4 of the Directive, the victim must prove the damage, the defect and the causal relationship between defect and damage, but not that the producer was at fault. However, in accordance with the principle of fair apportionment of risk between the injured person and the producer set forth in the seventh recital in the preamble to the Directive, Article 7 provides that the producer has a defence if he can prove certain facts exonerating him from liability, including `that 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’ (Article 7(e)).
25 Several observations can be made as to the wording of Article 7(e) of the Directive.
26 First, as the Advocate General rightly observes in paragraph 20 of his Opinion, since that provision refers to `scientific and technical knowledge at the time when [the producer] put the product into circulation’, Article 7(e) is not specifically directed at the practices and safety standards in use in the industrial sector in which the producer is operating, but, unreservedly, at the state of scientific and technical knowledge, including the most advanced level of such knowledge, at the time when the product in question was put into circulation.
27 Second, the clause providing for the defence in question does not contemplate the state of knowledge of which the producer in question actually or subjectively was or could have been apprised, but the objective state of scientific and technical knowledge of which the producer is presumed to have been informed.
28 However, it is implicit in the wording of Article 7(e) that the relevant scientific and technical knowledge must have been accessible at the time when the product in question was put into circulation.
29 It follows that, in order to have a defence under Article 7(e) of the Directive, the producer of a defective product must prove that the objective state of scientific and technical knowledge, including the most advanced level of such knowledge, at the time when the product in question was put into circulation was not such as to enable the existence of the defect to be discovered. Further, in order for the relevant scientific and technical knowledge to be successfully pleaded as against the producer, that knowledge must have been accessible at the time when the product in question was put into circulation. On this last point, Article 7(e) of the Directive, contrary to what the Commission seems to consider, raises difficulties of interpretation which, in the event of litigation, the national courts will have to resolve, having recourse, if necessary, to Article 177 of the EC Treaty.
30 For the present, it is the heads of claim raised by the Commission in support of its application that have to be considered.
31 In proceedings brought under Article 169 of the Treaty the Commission is required to prove the alleged infringement. The Commission must provide the Court with the information necessary for it to determine whether the infringement is made out and may not rely on any presumption (see, in particular, Case C-62/89 Commission v France [1990] ECR I-925, paragraph 37).
32 The Commission takes the view that inasmuch as section 4(1)(e) of the Act refers to what may be expected of a producer of products of the same description as the product in question, its wording clearly conflicts with Article 7(e) of the Directive in that it permits account to be taken of the subjective knowledge of a producer taking reasonable care, having regard to the standard precautions taken in the industrial sector in question.
33 That argument must be rejected in so far as it selectively stresses particular terms used in section 4(1)(e) without demonstrating that the general legal context of the provision at issue fails effectively to secure full application of the Directive. Taking that context into account, the Commission has failed to make out its claim that the result intended by Article 7(e) of the Directive would clearly not be achieved in the domestic legal order.
34 First, section 4(1)(e) of the Act places the burden of proof on the producer wishing to rely on the defence, as Article 7 of the Directive requires.
35 Second, section 4(1)(e) places no restriction on the state and degree of scientific and technical knowledge at the material time which is to be taken into account.
36 Third, its wording as such does not suggest, as the Commission alleges, that the availability of the defence depends on the subjective knowledge of a producer taking reasonable care, having regard to the standard precautions taken in the industrial sector in question.
37 Fourth, the Court has consistently held that the scope of national laws, regulations or administrative provisions must be assessed in the light of the interpretation given to them by national courts (see, in particular, Case C-382/92 Commission v United Kingdom [1994] ECR I-2435, paragraph 36). Yet in this case the Commission has not referred in support of its application to any national judicial decision which, in its view, interprets the domestic provision at issue inconsistently with the Directive.
38 Lastly, there is nothing in the material produced to the Court to suggest that the courts in the United Kingdom, if called upon to interpret section 4(1)(e), would not do so in the light of the wording and the purpose of the Directive so as to achieve the result which it has in view and thereby comply with the third paragraph of Article 189 of the Treaty (see, in particular, Case C-91/92 Faccini Dori v Recreb [1994] ECR I-3325, paragraph 26). Moreover, section 1(1) of the Act expressly imposes such an obligation on the national courts.
39 It follows that the Commission has failed to make out its allegation that, having regard to its general legal context, especially section 1(1) of the Act, section 4(1)(e) clearly conflicts with Article 7(e) of the Directive. As a result, the application must be dismissed.
Costs
40 Under Article 69(2) of the Rules of Procedure, the unsuccessful party is to be ordered to pay the costs. Since the Commission has been unsuccessful, it must be ordered to pay the costs.
On those grounds,
THE COURT
(Fifth Chamber)
hereby:
1. Dismisses the application;
2. Orders the Commission to pay the costs.