Product Liability
Product liability claims represent a significant area of tort law, intended to hold manufacturers and sellers accountable for any harm their products cause to consumers. At the core of these claims are three fundamental principles: the “neighbour” principle in tort, the concept of implied warranties in contract, and collateral warranties in contract. Each of these principles offers a different angle through which a claim can be approached, depending on the specifics of the case.
The “Neighbour” Principle in Tort
The foundation of product liability in Canadian law can be traced back to the landmark case Donoghue v. Stevenson, which established the “neighbour” principle. This principle obliges individuals to avoid acts or omissions that might reasonably be foreseen to injure their “neighbour,” a term interpreted broadly to include anyone who could be affected by their actions.
In the context of product liability, the neighbour principle has been applied to manufacturers, importers, wholesalers, distributors, retailers, assemblers, repairers, inspectors, and certifiers involved in the supply of potentially harmful products. They are expected to exercise reasonable care in their operations to avoid causing personal injury. If a product causes injury due to a lack of such care, a product liability claim can be filed against the responsible party.
Implied Warranties in Contract
Implied warranties in contracts provide another layer of protection for consumers. Under Sale of Goods legislation, implied warranties can be invoked in cases where the purchaser and seller of the product have a contractual relationship. This framework offers two key protections: an implied condition that the goods will be reasonably fit for a particular purpose and an implied condition that the goods will be of merchantable quality. These warranties are absolute; they do not require the purchaser to prove any act of negligence on the seller’s part.
However, these implied warranties are not without limitations. They can be circumvented by “disclaimer” or “exemption” clauses, where sellers can contract out of the warranties. In Ontario, however, such clauses are void in respect of consumer sales under the Sale of Goods Act.
Collateral Warranty in Contract
Finally, collateral warranty in a contract provides a pathway to product liability claims even without a direct contractual relationship between the plaintiff and defendant. If, at the time of sale, the defendant made a communication (oral or written) intended to induce the plaintiff to purchase the product, a breach of this “collateral warranty” can lead to a product liability claim.
This principle is exemplified in Leitz v. Saskatoon Drug & Stationery Company, where a distributor was held liable for the plaintiff’s injury caused by a defective product, despite the absence of privity of contract. The distributor had attached a label indicating the product’s safety, which was deemed an inducement to purchase.
Grigoras Law: Your Advocate in Product Liability Claims
At Grigoras Law, we are well-versed in the nuanced landscape of product liability claims. We understand the complexities of each principle underpinning these claims, and how best to apply them in a given case. We recognize that each case is unique, and we are committed to using our extensive knowledge and experience to ensure the most favourable outcome for you. Our team is dedicated to offering personalized legal support and robust representation for both plaintiffs alleging product liability and defendants defending against such allegations. Let us be your advocate in navigating the complexities of product liability law.
FAQ
Disclaimer: The answers provided in this FAQ section are general in nature and should not be relied upon as formal legal advice. Each individual case is unique, and a separate analysis is required to address specific context and fact situations. For comprehensive guidance tailored to your situation, we welcome you to contact our expert team.
Yes, businesses that sell products can and often do obtain product liability insurance to protect against potential lawsuits. In Canada, most manufacturers and businesses view such coverage as a standard operating cost. The insurance provides coverage for sums that the insured becomes legally obligated to pay as compensatory damages due to “bodily injury” or “property damage.” This applies only to injuries or damage that occur during the policy period and are caused by an “occurrence,” typically defined as an accident or exposure to harmful conditions.
Most product liability insurance is “occurrence-based,” meaning the policy is triggered based on when the injury or damage from negligence allegedly took place, not when the claim is made against the insured. This contrasts with “claims-made” policies often seen in professional liability errors and omissions policies, which cover according to when the claim is made, regardless of when the negligence occurred.
Additionally, most product liability insurance policies cover the “products and completed operations hazard,” which refers to bodily injury and property damage occurring away from the insured’s premises and arising out of the insured’s product or work. Exceptions to this coverage include products still in the insured’s possession or work that hasn’t been completed or abandoned.
There are also a number of exclusions to keep in mind. Some policies may exclude coverage for damage arising from the insured’s own products or work, or for property in the insured’s care, custody, or control. However, these exclusions only apply to claims for property damage, not “bodily injury” product liability cases.
“Bodily injury” coverage usually excludes claims by the insured’s employees, claims arising from the use of automobiles, watercraft or airplanes, claims resulting from hostile invasions, claims related to nuclear facilities, and pollution claims. Most “bodily injury” product liability cases, however, would still be fully covered.
It’s important to note the impact of major liability cases on insurance coverage. For example, the US faced massive product liability claims involving asbestosis in the 1970s and 1980s. Because these claims involved injuries that occurred over several years, the judiciary interpreted occurrence-based products liability insurance to allow multiple policy periods to be “stacked,” with corresponding policy limits. This created a liability fund that the insurance had not been underwritten or reserved for, leading to a mid-1980s liability insurance crisis.
This highlights the importance of not only assigning fault for product liability but also ensuring appropriate funding for such liabilities. To be truly comprehensive, Canadian legislatures need to address both of these issues in personal injury product liability legislation.
Based on Canadian law, it’s possible for you to sue for defective design if you can establish that the design of your after-market tuner was defective, which in this case means it ought to have been designed with greater safety in mind, and as a result, caused damage to your car’s transmission. However, proving defective design is often more challenging compared to other aspects of product liability, such as manufacturing defects.
There are several elements you would need to prove. First, you would need to provide expert evidence that the product could have been designed more safely. In your case, this might involve an automotive engineer who can testify that there were safer, reasonably foreseeable alternatives to the design that the manufacturer used for the after-market tuner.
Second, you must also show that the risk of damage by the defective design was reasonably foreseeable and could have been avoided when the product was manufactured. This requires demonstrating that the manufacturer should have known, with reasonable care, that the product’s design could cause damage like the one you experienced.
According to the standards stated by Canadian courts, the standard of care is “the duty to take reasonable care in the circumstances, and nothing more.” This means that if the manufacturer conformed to the standard of design safety in the industry, they could be relieved from liability. However, even if a manufacturer followed industry practice, it does not automatically absolve them from liability. They may still be found to have failed to meet the requisite standard of care if they did not take reasonable measures to prevent foreseeable harm.
The manufacturer is also only obligated to perform commercially feasible tests on its product and is entitled to use the best testing methods currently available. It’s also important to note that while a breach of statutory duty may be evidence of negligence on the manufacturer’s part, it is not determinative.
If the manufacturer is a small firm producing automobile “kits,” they might be subject to a lower standard of care, but major automobile manufacturers are expected to maintain a higher standard of care and ensure their products are “reasonably crashworthy.”
Finally, it’s important to consider the “state of the art” defence, which allows manufacturers to argue that they used the best technology available at the time of production. However, Canadian courts generally uphold a high standard of care, approximating “absolute liability,” especially when it comes to industries involving food production, processing, and handling.
Please keep in mind that you should consult with a lawyer who specializes in product liability to get a full understanding of your legal options and potential challenges in a case like this. This summary is based on general principles of law and may not fully capture the complexities of your specific situation.
Based on the principles established in product liability law, it is indeed possible for you to sue the manufacturer of the bathroom cleaner that caused your chemical burn if you believe it lacked adequate warning labels. In product liability claims, one avenue for establishing manufacturer negligence is by showing a failure to properly warn users of known or reasonably foreseeable risks associated with the use of the product.
In the case of Lambert v. Lastoplex Chemicals Co. Ltd., the Supreme Court of Canada held that the manufacturer’s duty to warn includes a requirement to specify any attendant dangers known to the manufacturer, but not necessarily to the ordinary consumer or user. A generic warning might not be sufficient in situations where the risk of injury could increase depending on the circumstances under which the product is expected to be used.
The court identified several factors in determining what constitutes a sufficient warning. This includes the nature of the product, its associated potential risks, and the foreseeable user of the product. Importantly, the court held that the manufacturer is not required to warn of dangers that would be as apparent to the consumer as to the manufacturer. However, for less apparent dangers, especially when it involves consumer products with a higher potential danger, the warnings must be more explicit.
For example, in one case it was found inadequate to label a highly corrosive substance capable of causing blindness as merely an “irritant.” The warning must not only suggest seeking medical attention if the substance enters the eye, but it should also advise immediate flushing to minimize damage. In another case, where a violent chemical reaction resulted from combining two drain cleaners, the court held that the warning was insufficiently specific about this danger, even though the warning was present in small print.
In your case, if the bathroom cleaner was indeed corrosive and there was no clear and specific warning about the possibility of chemical burns on its label, there may be grounds for a product liability claim. However, the specifics of your case, including the exact wording of the warnings, the foreseeability of the injury, and your actions, will play a crucial role in determining liability.
It’s recommended that you consult with a product liability lawyer to assess the specifics of your case. They can help identify any potential defences the manufacturer may raise, such as whether the danger was apparent or whether there were intervening factors that contributed to your injury.
Generally, a manufacturer must take certain steps, even before they later find out that their product may be defective. They are expected to do the following things:
Continuing Duty to Keep Abreast: The manufacturer should continuously stay updated on the scientific developments related to their product. This requires them to actively conduct research, monitor adverse reaction reports, review scientific literature, and use other available methods to gather relevant information.
Communicate Risks: If new risks or potentially dangerous side effects are discovered, the manufacturer must make reasonable efforts to communicate this information to the appropriate parties. In the case of prescription drugs, this would be prescribing physicians, but depending on the product, this could also include direct consumers or other intermediaries.
Adequacy of Warnings: The manufacturer must ensure that any warnings issued about the product are adequate and reasonable given the circumstances. Factors that may influence the adequacy of a warning include the nature of the product, the necessity of its use, the magnitude of increased danger to the consumer, and the likelihood of injury.
Be Forthright and Complete: The manufacturer should not discount or ignore medical evidence that shows a potential danger inherent in the use of a product, even if they find it unconvincing. They should communicate these risks in a forthright and complete manner, providing as much information as possible.
Corrective Measures: The manufacturer should also advise on possible corrective measures if a product has been found to have potential dangers, as was the case with Cominco v. Canadian General Electric Company Ltd.
Continuing Duty to Warn: Manufacturers have a continuing duty to warn of the design defect even after the product has been sold and distributed, as illustrated in Rivtow Marine Ltd. v. Washington Iron Works. This implies an ongoing obligation for the manufacturer to keep past customers informed about the risks associated with design defects.
Active Steps: The duty to warn requires manufacturers to take active steps. Depending on the size and sophistication of the manufacturer, this may require maintaining testing and inspection procedures, establishing research libraries, and participating in trade organizations, research committees, and standards associations.
Reasonable Communication: All warnings should be reasonably communicated and must clearly describe any specific dangers that arise from the ordinary use of the product. The standard of care for manufacturers of medical products is high given the intimate relationship between such products and the consumer’s body and the resulting risk created to the consumer.
Rejection of Learned Intermediary Rule Defense: If a manufacturer fails to warn an intermediary (like a doctor), it cannot escape liability on the grounds that the intermediary might not have passed on the warning to the consumer. The ultimate duty of the manufacturer is to warn the consumer adequately.
Liability: If the manufacturer fails to communicate the risks to the intermediary and as a result, the consumer suffers an injury, the manufacturer can be held liable for the injuries.
These steps serve to ensure that manufacturers adhere to their responsibility to consumers, both in terms of providing a safe product and ensuring that information about potential risks or defects is adequately communicated. This duty is ongoing and extends beyond the point of sale, reflecting the potential for new information or risks to emerge after a product has been distributed.
In product liability cases, the question of whether the government owes a private individual a duty of care is complex and primarily determined by the specifics of the case. However, based on precedent, it can generally be stated that the government doesn’t typically owe a private law duty of care in such situations.
One such case in which this principle was upheld is Attis v. Canada (Minister of Health) by the Ontario Court of Appeal. In this case, the plaintiffs, who had been implanted with silicon gel breast implants, alleged that the implants could leak when ruptured, leading to serious medical consequences. They initiated a proposed class action against Dow Canada, alleging that Health Canada was required to ensure public safety from harmful devices under the Food and Drugs Act. They claimed Health Canada was negligent for failing to test, ban, recall the implants, or warn them about the potential risks.
However, the court found that it was not “plain and obvious” that the claim disclosed a case of action, primarily because the relevant legislative and regulatory scheme did not support the plaintiffs’ contention that Health Canada owed them a private law duty of care. The class action was subsequently dismissed, and the plaintiffs’ appeal was also dismissed by the Ontario Court of Appeal.
The appellate court agreed that no private law duty of care was owed, as the case did not fit into a recognized or analogous category of proximate relationship. In terms of the alleged breach of statutory duty, the court referenced s.19 of the Food and Drugs Act, which provides immunity for the safety of medical devices and places the obligation for safety primarily on the manufacturer/distributor, not the government.
The court also stated that the regulations at the time did not require Health Canada to undertake safety testing, and based on the legislative scheme, no intention to impose a private law duty of care could be inferred. The court concluded that the government does not have a proximate relationship to a Canadian citizen when it makes decisions of a political, social, or economic nature.
Therefore, in the context of product liability claims, the precedent suggests that the government typically does not owe a private individual a duty of care. However, it is important to note that this can vary depending on the specifics of a case and the relevant jurisdiction. It’s recommended to seek legal advice from a professional who can provide guidance based on your specific circumstances.
In a product liability claim, if the plaintiff does something that is considered careless or negligent when using the product, this could potentially affect the outcome of the claim. This factor is taken into account under the defence of contributory negligence, which refers to the plaintiff’s own actions that contribute to their injury.
The principle of “no reasonable possibility of intermediate examination” by the plaintiff, as established by Lord Atkin, implies that the plaintiff’s actions are considered in such cases. In some early cases, this principle was debated, focusing on whether “probability” was actually meant instead of “possibility.”
Moreover, there have been instances where the defence of volenti non fit injuria has been used to counter a plaintiff’s claim. This Latin term means “to a willing person, injury is not done.” It is used when it can be shown that the plaintiff, by their conduct, in effect, “consented” to the risk of personal injury by their use of the product.
However, modern courts have increasingly focused on apportionment legislation and on the plaintiff’s own conduct as a contributing factor to the accident. This is based on the understanding that accidents resulting from negligence are often the result of a combination of factors, including the lack of reasonable care for their own safety on the part of the plaintiff.
In the case of Shields v. Hobbs Manufacturing Company, the Supreme Court of Canada reduced the damages claimed by a widow by 50 percent based on her husband’s contributory negligence in not conducting a prior grounding test before installing a machine, as required by law. In another case, Smith v. Inglis Ltd., the court ruled that both parties were partly responsible for an accident caused by an electrical shock from a refrigerator, as both the manufacturer and the plaintiff could have foreseen and mitigated the risks involved.
The defence of contributory negligence can also apply to cases involving an alleged failure to warn about the product’s dangers. In Meilleur v. U.N.I.-Crete Canada Ltd., the fact that the defendant had insufficiently described a product that could cause blindness as an eye “irritant” led to the plaintiff recovering only 25 percent of his damages.
It’s important to note that the defence of contributory negligence could potentially be applied to cases involving a failure to warn of subsequently discovered defects.
As product liability law has evolved, the focus has shifted towards a more equitable division of liability, taking into account both the defendants’ and plaintiffs’ common and shared responsibility to avoid accidents. It seems simpler for courts to focus on this shared responsibility rather than on outdated defences such as intermediate inspection by plaintiffs or plaintiffs’ voluntary assumption of risk. This approach helps ensure a fairer outcome when personal injuries involving products occur.
In product liability cases in Ontario, there are various types of damages available for the claimant. These are as follows:
Pain, Suffering, and Loss of Enjoyment of Life: These damages are non-pecuniary, meaning they are awarded to compensate for non-financial harm. The awards vary depending on factors such as the plaintiff’s age, severity of the injury, and how it affects their activities of daily living. The Supreme Court of Canada set a cap on these damages in 1978 which, as of 2023, is approximately $400,000, adjusted annually for inflation.
Loss of Guidance, Care, and Companionship: If a family member is injured or killed due to a faulty product, the Family Law Act allows other family members to claim damages for the loss of guidance, care, and companionship they reasonably expected to receive from the injured person. These are also non-pecuniary damages, recognizing the emotional impact on family relationships.
Loss of Income or Earning Capacity: This category addresses both past and future loss of income. For past loss of income, the court determines what the injured person would have earned from the date of injury to the date of trial if they had not been injured. The calculation of future loss of income involves multiplying the annual income loss by the injured person’s expected working years, accounting for factors such as the discount rate and expected retirement age. Loss of earning capacity is claimed when the injured party may be able to work but at a reduced level, impacting their future career advancement and earnings.
Property Damage and Economic Losses: A plaintiff can claim damages for property damage caused by the defective product. However, pure economic losses, such as loss of profits, are typically only awarded in cases involving a contract between the plaintiff and defendant or a breach of warranty, barring certain narrow exceptions.
Healthcare Expenses: All past and future healthcare costs that are a result of the negligence or breach of contract of the defendant can be claimed. These costs must be extraordinary and wouldn’t have been required but for the injury.
Housekeeping and Home Maintenance Expenses: These expenses can be awarded for losses arising from a plaintiff’s reduced efficiency in maintaining their home or completing pre-accident housekeeping duties. This includes compensation for any tasks performed by others due to the plaintiff’s inability, and future pecuniary losses due to a future inability to engage in these tasks.
Tort Dependency Claims and Pecuniary Losses of Family Members: Under section 61 of the Family Law Act, family members can claim for actual expenses incurred for the benefit of the injured or killed person, actual funeral expenses incurred, actual travel expenses incurred during treatment or recovery, the value of services for nursing, housekeeping and other services provided for the injured person, and compensation for the loss of guidance, care, and companionship.
Punitive Damages: These are damages intended to punish wrongdoers for actions that significantly deviate from ordinary standards of behaviour. They are not awarded frequently and require proof of malicious, oppressive, and high-handed misconduct that offends the court’s sense of decency.
Aggravated Damages: These are compensatory damages designed to compensate the plaintiff for any mental distress caused by the defendant’s harmful actions. They are typically awarded in instances where the defendant’s conduct has been particularly high-handed or oppressive, which increases the plaintiff’s humiliation and anxiety arising from the wrongful act.
It’s worth noting that the above types of damages reflect a broad range of potential compensation. However, the specifics of an individual case will significantly impact the types and amount of damages awarded. It is crucial to consult with a legal professional who can offer advice based on specific facts and circumstances.
