C-300/95

COMMISSION v UNITED KINGDOM

OPINION OF ADVOCATE GENERAL TESAURO delivered on 23 January 1997 *

1. The subject of this Opinion is an action by a defect in his product'. Article 4 goes on brought by the Commission under to provide that 'The injured person shall be Article 169 of the Treaty against the required to prove the damage, the defect and United Kingdom for failure on the lat- the causal relationship between defect and ter's part properly to transpose Article damage', whilst Article 6(1) specifies that 'A 7(e) of Council Directive 85/374/EEC product is defective when it does not provide of 25 July 1985 on the approximation of the safety which a person is entitled to the laws, regulations and administrative expect, taking all circumstances into account, provisions of the Member States con­ including: (a) the presentation of the prod­ cerning liability for defective products 1 uct; (b) the use to which it could reasonably (the 'Directive'). be expected that the product would be put; (c) the time when the product was put into circulation.' Article 6 goes on to provide that 'A product shall not be considered defective for the sole reason that a better product is Relevant legislation and procedure subsequently put into circulation.'

On 2 July 1990 the Commission issued a rea­ soned opinion, confirming its original criti­ cisms. For its part, the United Kingdom reiterated its objections in a letter dated 3. Under Article 19, the Directive had to be 4 October 1990 replying to the reasoned implemented by 30 July 1988. The United opinion. Kingdom did so by Part I of the Consumer Protection Act 1987 ('the Act'), which came into force on 1 March 1988. 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 con­ strued accordingly'. Section 4(1 )(e), which is intended to implement Article 7(e) of the 5. In view of the United Kingdom's argu­ Directive, provides that it is a defence for the ments and of section 1(1) of the Act, under producer to show that 'that the state of sci­ which the relevant provisions are to be con­ entific and technical knowledge at the rel­ strued in accordance with the Directive, the evant time was not such that a producer of Commission considered that five of the six products of the same description as the grounds raised in the pre-litigation pro­ product in question might be expected to cedure should be abandoned. have discovered the defect if it had existed in his products while they were under his con­ trol'.

4. Taking the view that the Act did not In contrast, it took the view that the com­ properly transpose the Directive in various plaint relating to section 4(1)(e) of the Act, respects, the Commission initiated infringe­ purportedly implementing Article 7(e) of the ment proceedings against the United King­ Directive, was justified, and brought an dom under Article 169 of the Treaty by action for a declaration that it did not cor­ sending a letter before action on 26 April rectly implement that provision.

In support of its submissions, the Commis­ sion has further claimed that in the debates in the House of Lords several peers expressed doubts whether section 4(1)(e) of the Act was compatible with the Directive; 7. The Commission considers that the chief similar concerns have been raised by the consequence of the change in the system of most authoritative British learned authors. liability embodied in the Directive will be procedural: in order to prove that neither he nor another producer of similar products could have discovered the defect at the mate­ rial time, it is sufficient for the producer of a defective product to show that he was not guilty of any negligence and that he took all 9. Disagreeing with the Commission, the the standard precautions in use in the indus­ Government of the United Kingdom consid­ try in question. ers that the test laid down by the Act is not

I - 2653

OPINION OF MR TESAURO — CASE C-300/95

substantively different from that laid down the United Kingdom Government asserts — by the Directive, and denies that it was by the seventh recital in the preamble to the intended by means of the Act to adopt a sys­ Directive, which, in stating that 'a fair appor­ tem of liability based on negligence on the tionment of risk between the injured person part of the producer. 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', shows an intention on the part of the Community leg­ islator to afford the producer real, effective defences, the effectiveness of which would be In the United Kingdom's view, the Commis­ destroyed if the Commission's interpretation sion's view is based on an erroneous inter­ were to be accepted. pretation of the relevant provisions of the Directive and the Act.

In fact, the Government maintains, by laying down an objective test — that is, one that can be objectively verified — for the produc­ In contrast, the United Kingdom considers er's defence against liability, section 4(1 )(e) is that the only sensible meaning that can be worded in such a way as to be fully consis­ given to the Community provision is that tent with the Directive, and the fact that that encapsulated in section 4(1 )(e) of the Act: the provision differs linguistically from the capacity of the producer in question (or of Community provision has no bearing from producers of similar products) constitutes an this point of view. Neither can it be claimed objective, abstract notion, referring not to that, unlike the Directive, the Act introduces what the producer actually knew or did not a system of liability based on negligence: if know, but to what he could and/or should that were the case, the burden of proving have known in the light of the fund of scien­ that the producer had been negligent would tific and technical knowledge available at the lie with the injured party, whereas under material time. This is confirmed moreover — section 4(1 )(e) it is for the producer wishing

I - 2654

COMMISSION v UNITED KINGDOM

to raise a defence against liability to prove 13. In this connection, I consider that I that, in the light of the available knowledge, should first clear the ground of any doubt he was not capable of discovering the defect. about the possibility of the lack of any national case-law on the point at issue oper­ ating in any way so as to preclude or stand in the way of the institution of proceedings under Article 169.

2 — In answer to a specific question from myself on this point, Those remarks seem in fact to be suggesting the United Kingdom Government itself expressly acknowl- edged that the lack of any national case-law inconsistent that the Commission's application is inad­ with the Directive had no bearing on the admissibility of the Commission's application. missible in view of the absence of any 3 — See, for example, Case C-71/92 Commission v Spain [1993] national practice on the point at issue. ECR I-5923, paragraph 23.

I - 2655

OPINION OF MR TESAURO — CASE C-300/95

In the final analysis, what this application — as defined in the pre-litigation stage — is concerned with is not the possible ambiguity of the national implementing provision, but its irremediable inconsistency with the Com­ munity provision which it purports to The tendency which I have just described implement. Hence, it is within these limits has been stimulated moreover by the growth that the Commission's application must be 5 of industrial activity. With the ever increas­ considered. ing complexity of manufacturing processes, the risks associated with product defects multiplied and became difficult to avoid and it became clear that the system of liability founded on the producer's negligence was inappropriate to secure adequate protection for the consumer. Albeit injured by a defec­ tive product, consumers were in fact — and 15. Having said this, I consider it appropri­ too often — deprived of an effective remedy, ate, given that the Directive is before the since it proved very difficult procedurally to Court for the first time, to summarize its prove negligence on the part of the producer, essential features in order to identify the that is to say, that he had failed to take all exact interpretation of the provision at issue. appropriate steps to avoid the defect arising. It will subsequently be possible in the light of that interpretation to determine whether the national provision in question does not 4 — See to this effect the pertinent observations of Ponzanelli, La diverge substantively from the Community responsabilità civile. Profili di diritto comparato, Bologna, 1992, p. 107. provision or whether, simply on the basis of 5 — Cf. Priest, La scoperta della responsabilit-à d'impresa: una its wording, it must be inferred that it is irre­ storia critica delle origini intellettuali del moderno sistema di responsabilità civile, in Responsabilità Civile, 1985, p. 275 et mediably in conflict with the Directive. seq.

6 — The doctrine of objective or, to use the English term, strict liability originates in the United States in a concurring opin- ion of Judge Roger Traynor in Escola v Coca Cola Bottling Co., 24 Cal. 2d 453, 461 P 2 d 436 (1944) to the effect that a producer had to be held liable if, in placing a product on the 18. The type of liability outlined in the market, he knew that it would be used without inspection Commission's proposal, however, went and a defect in the product caused injury. The rationale is that the producer, unlike a member of the public, can protect beyond the system of strict liability as himself against the occurrence of risks and take out insur- ance, thus distributing the cost amongst consumers. In defin- described earlier, being one of absolute liabil­ ing the rules of civil liability, the California Supreme Court ity in that the producer could put forward accepted Judge Traynor's view in Greenman v Yuba Power Products Inc., 59 Cal 2 d 57, 377 P 2 d 897 (1963), when it no evidence in rebuttal. Article 1 of the pro­ held the defendant manufacturer strictly liable for injuries caused by a defect in a product. This principle was subse- posal provided that 'The producer of an quently taken up in § 402A of the Restatement (Second) of article shall be liable for damage caused by a Torts, which provides that the seller should be liable vis-à-vis the consumer for marketing 'unreasonably dangerous' defec- defect in the article, whether or not he tive products. The 'unreasonably dangerous' requirement was rejected, however, by the California Supreme Court in knew or could have known of the defect. Cronin v J. B. E. OUon Corp., 8 Cal. 3 d 121, 501, P 2 d 1153 (1972) on the ground that it was 'something very like' neg- The producer shall be liable even if the ligence: it was sufficient to show that the defect caused the article could not have been regarded as injury in order for the manufacturer to incur liability. It should be noted that since the publication of § 402A systems defective in the light, of the scientific and of strict liability have been adopted in most of the United States. For a summary of the subject in the vast collection of US learned writings, sec Shapo, The law of products liability, Boston — New York 1987.

9 — In this connection, it is worth pointing out that in the United States the case-law showed a propensity for absolute liability on the part of the producer, especially in the phar- maceuticals sector. However, the 'indiscriminate expansion 20. It should first be observed that, since of substantive tort liability' resulting from this case-law, as a that provision refers solely to the 'scientific result of which there was held to be liability in every case whatever the cost and the state of the art defence was and technical knowledge' at the time when rejected, brought about a crisis on the insurance market which was so serious that some economic activities could no the product was marketed, it is not con­ longer obtain insurance cover. Owing to this, there have cerned with the practices and safety stan­ recently been siens of a reversal of this trend both in the case-law and in legislation and a return to the rules of strict, dards in use in the industrial sector in which rather than absolute, liability: see Priest's observations, The current insurance crisis and modem tort law, in 96 Yale Law the producer is operating. In other words, it Journal 1589 (1987); ibid., La controrivoluzione nel diritto di has no bearing on the exclusion of the manu­ reponsabilità da prodotti negli Stati Uniti di America, in Foro italiano 1989, IV, p. 119 et seq. In the latter article, the facturer from liability that no-one in that author gives a warning to legal circles in Europe which it is well to bear in mind: 'The California Supreme Court in Brown and the new legislation of New Jersey have begun to reappraise the premisses of the rule of strict liability m the products liability sector. It will be important to see whether, in giving practical implementation to the Community Direc- 10 — This is evidenced by Article 15(b) of the Directive, which tive of 25 July 1985, adopting the standard of strict liability allows Member States to derogate from the provision on twenty-five years after it was introduced in the United development risks by introducing stricter legislative provi- Sutes, the European States will accept the original theoreti- sions. cal premisses or that system which subsequently caused a 11 — As regards the difficult gestation of this provision, see crisis in the USA or whether, on the other hand, they will Ghcstin, La directive communautaire du 2} juillet 198í sur accept the counter-revolution which has just begun' [transla- la responsabilité du fait des produits défectueux, in Dalloz, tion!. 1986, Chron., p. 135 et seq.

21. Some additional considerations need to be explored, however, in order to tie down the concept 'state of knowledge'.

22. That interpretation, which coincides with that suggested by the Commission at The progress of scientific culture does not the hearing with the aid of a number of very develop linearly in so far as new studies and pertinent examples, is the closest to the ratio new discoveries may initially be criticized legis of the Community rules: the producer and regarded as unreliable by most of the has to bear the foreseeable risks, against which he can protect himself by taking either preventive measures by stepping up experi­ mentation and research investment or mea­ 12 — For example, if a chemist or a pharmacologist has to keep up to date with the characteristics of a given substance, sures to cover himself by taking out civil similar knowledge will be required for present purposes of liability insurance against any damage caused an industrialist producing pharmaceuticals containing the same substance. by defects in the product.

I - 2659

OPINION OF MR TESAURO — CASE C-300/95

Where in the whole gamut of scientific opin­ 24. In such a situation, it would be unrealis­ ion at a particular time there is also one iso­ tic and, I would say, unreasonable to take the lated opinion (which, as the history of sci­ view that the study published in Chinese has ence shows, might become with the passage the same chances as the other of being of time opinio communis) as to the poten­ known to a European product manufacturer. tially defective and/or hazardous nature of So, I do not consider that in such a case a the product, the manufacturer is no longer producer could be held liable on the ground faced with an unforeseeable risk, since, as that at the time at which he put the product such, it is outside the scope of the rules into circulation the brilliant Asian researcher 13 imposed by the Directive. had discovered the defect in it.

25. Having thus identified the scope of the Community provision, I consider that I am unable to share the Commission's proposi­ tion that there is an irremediable conflict between it and the national provision at issue. Indeed, there is no denying that the To be plain, there exist quite major differ­ wording of section 4(1 )(e) of the Act con­ ences in point of the speed in which it gets tains an element of potential ambiguity: in so into circulation and the scale of its dissemi­ far as it refers to what might be expected of nation between a study of a researcher in a the producer, it could be interpreted more university in the United States published in broadly that it should. an international English-language interna­ tional journal and, to take an example given by the Commission, similar research carried 13 — Contrary to the Commission's submission at the hearing out by an academic in Manchuria published — which moreover contradicted what it initially said — , I therefore do not consider it enough in order to defeat the in a local scientific journal in Chinese, which defence provided for in Article 7(c) of the Directive to does not go outside the boundaries of the show that there was one person, irrespective of his country and language, who was capable of discovering the defect in region. the product.

I - 2660

COMMISSION v UNITED KINGDOM

Notwithstanding this, I do not consider that 27. In so far as the disputed provision of the the reference to the 'ability of the producer', Act is interpreted and applied by the despite its general nature, may or even must national courts in this way, the Commis­ (necessarily) authorize interpretations con­ sion's concerns that the defence in question trary to the rationale and the aims of the will be made unduly subjective, resulting in Directive. the substantial transformation of the system of liability introduced by the Directive into negligence liability, are therefore unfounded.

Secondly, the reference contained in the Act to the producer's ability to discover the defect is not sufficient to make the test which 28. I would add that neither the rule of it lays down a subjective one. That reference interpretation laid down by section 1 of the can certainly be regarded, as the United Act requiring national courts to interpret its Kingdom has argued, as a objectively verifi­ provisions in conformity with the Directive able and assessable parameter, which is in no nor the similar interpretative obligations of way influenced by consideration of the general scope imposed on the British courts actual subjective knowledge of the producer by the European Communities Act 1972 and or by his organizational and economic constantly stressed by the case-law of the requirements. By virtue of that parameter, it House of Lords 14 seem to me to be irrel­ must therefore be proved, in order to evant as the Commission claims. exclude liability on the part of the producer, that it was impossible, in the light of the most advanced scientific and technical 14 — On this point, it is scarcely necessary to point out that the knowledge objectively and reasonably Court has consistently held that the national courts are obtainable and available, to consider that-the obliged in any event to interpret domestic legislation con- sistently with the Directive: sec Case C-106/89 Marleasing product was defective. [1990] ECR I-4135, paragraph 8.

I - 2661

OPINION OF MR TESAURO — CASE C-300/95

(1) dismiss the application ;

(2) order the Commission to pay the costs .

15 — See in particular Case C-382/92 Commission v United Kingdom [1994] ECR I-2435, paragraph 36, and Joined Cases C-132/91, C-138/91 and C-139/91 Kutsikas and Oth- ers [1992] ECR I-6577, paragraph 39.

I - 2662