Product Liability Concept Under Consumer Protection Act 2019
Corporate India Blog - Product Liability Under Consumer Protection Act 2019
Today in our quick read blog (No. 05/2020-21), we continue to present an outlook on the Consumer Protection Act, 2019 (‘Act’ or ‘Act 2019’) which has come into force from July 20, 2020 (except the sections yet to be notified) thereby repealing the erstwhile Consumer Protection Act 1986. Our quick blog will feature this Act in phased manner for next few days.
We have covered some portions of this Act in our previous blogs and today our emphasis is on the newly introduced concept of “product liability” under this Act:
Product Liability: It means “the responsibility of a product manufacturer or product seller, of any product or service, to compensate for any harm caused to a consumer by such defective product manufactured or sold or by deficiency in services relating thereto”.
This provision was very much the need of hour amidst the rising unscrupulous practices of producing low quality products or production without express check points of safety and instructions for use. Very often, we have witnessed products using similar or identical design, name, packaging pattern/styles, logo, colors, etc. for boosting their sales upon the credibility of trusted brands existing in market without providing the required quality for such products. For service providers too, unwarranted commitments, false hopes or misleading assurances for their services has become so routine in nature that they never bothered to take consumers seriously for deficiency in their services or negligence in performing them. This went unchecked mostly under the previous law due to lack of statutory provisions, except in certain leading cases like Coca-Cola India Limited vs Dr. Amarjit Singh (Aug 9, 2011), wherein National Consumer Dispute Redressal Commission ordered Coca-Cola to pay 2 lakh for its deficiency in services and committing unfair trade practice. Thus, it will be interesting to witness surge of consumer movement now in India. Consumer movement can be linked with the breakthrough judgment in Carlill v. Carbolic Smoke Ball Company 1893 (1) Q.B. 256 in which manufacturers' liability for minimum quality standard for product was established for the first time, leading to consumer movement in Britain after World War-II. This was followed by consumer movement in the United States of America when the New York Court of Appeal in Donald C. MacPherson v. Buick Motor Company 217 N.Y. 382, 111 N.E. 1050, ordered a car manufacturer to compensate its customer who suffered injury due to collapse of wheels due to defect in car. Thereafter, it was a matter of time that such awareness movements picked up pace and gradually India adopted its Consumer Protection Act, 1986 in the aftermath of such movements.
With the Act 2019, product liability has gained the statutory backing it lacked. However, its important to note that product liability must be established by consumers through “harm” caused to them. Thus, consumers must be equally cautious as they will carry the onus to prove any product liability action. If they do not become aware about their responsibility towards product liability claims, the inclusion of this concept shall be rendered futile in long run. Harm in relation to product liability has also been defined under the Act as an inclusive definition to include any damage to any property (other than damage to product or damage caused due to breach of warranty or commercial or economic loss, etc.) or personal injury, illness or death; or mental agony or emotional distress because of damage to property or personal injury, illness or death. Here again, the consumers are bestowed with responsibility to prove the nature of harm caused to them. Undoubtedly the definition of harm is quite broad, but the exemption provided against this phrase have equally been left open ended, thereby giving scope to litigations.
In cases where product liability is involved, consumers shall be entitled to claim compensation as “product liability action” before the respective forum under this Act upon grounds of defect or deficiency. The strict part is that the product manufacturer, unless covered under the exemptions laid in Section 87, shall be held liable in product liability action, even when he is able to show cause that he did not act negligently or fraudulently. Therefore, the Act emphasizes on the need for product manufacturers to be more precise in what they produce Besides that, a product seller (not being product manufacturer) shall also be liable for product liability action, unless he specifically proves his ground of defense. Be that as it may, the provisions for product liability action only provides for compensation to consumers suffering harm, which means that the provisions which appear so sharp in books, cannot be trusted to also have real teeth for its execution in practical world.
With product liability becoming reality now, the old standing rule of “Caveat Emptor” meaning “let the buyer be aware” changes to “Caveat Venditor” meaning “let the seller be aware”.
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