Product Liability, an essential component of consumer protection, experienced a significant change with the introduction of the Consumer Protection Act, 2019 (“2019 Act”) in India. For the first time in Indian law, product liability was clearly defined under this extensive legislation. The 2019 Act specifies that product liability involves the duty of product manufacturers, sellers, or service providers to compensate consumers for any damages caused by faulty products or inadequate services linked to those products.
This new Act replaced the previous Consumer Protection Act of 1986, received the President’s approval, and was officially announced in the Gazette of India on August 09, 2019. Although it was passed in 2019, most of its sections, including those about product liability, came into effect on July 20, 2020. This legislative change aimed to enhance consumer protection, implement stricter rules, and introduce new measures to handle changing market trends.
Notably, the inclusion of product liability in the 2019 Act signaled a move away from the old “buyer beware” approach, moving towards a system where sellers are made accountable—aptly described as “seller beware.” This change highlights a shift in the mindset of consumer protection, focusing on proactive steps to guarantee product safety and responsibility throughout the supply chain.
Product liability: Product Liability signifies the legal responsibility borne by a creator, vendor, or service provider for distributing a defective item. Customarily, the producer must comply with all stipulations, warranties, and conditions, fulfilling the standard anticipations of buyers. Product liability can be understood through the lenses of tort law and contract law.
Within tort law, product liability might arise when a creator, vendor, or service provider fails in their duty of care towards consumers. Alternatively, strict liability could be enforced as producers are held responsible for ensuring the items they offer to consumers are in satisfactory condition. In the realm of contract law, product liability can emerge from a breach of contract or warranty by the creator, vendor, or service provider. The incorporation of product liability in the Consumer Protection Act 2019 marks a positive progression in the enhancement of consumer rights, necessitating an exploration of its diverse facets in the Indian scenario.
Evolution of product liability in India: The Evolution of Product Accountability in India In the times preceding the enactment of the Consumer Protection Act of 2019, the Consumer Protection Act of 1986 was the primary legislation safeguarding consumer interests, albeit without an explicit mention of product accountability. Despite this, individuals could pursue remedies under the Act’s clauses concerning ‘defects’ and ‘shortcomings.’ The advent of the CPA 2019, which specifically addressed product liability, signified a significant transformation in the legal domain, providing enhanced clarity and broadening the scope for consumers to seek recompense for injuries inflicted by faulty merchandise.
The structure governing product responsibility in India has progressed in tandem with various other statutes, such as the Food Safety and Standards Act of 2006, the Legal Metrology Act of 2009, and industry-specific guidelines instituted by regulatory authorities like the Bureau of Indian Standards (BIS) and the Automotive Research Association of India (ARAI). These legislative measures augment the CPA 2019 by guaranteeing the upkeep of product safety criteria across diverse sectors.
Product Responsibility as per the CPA 2019: The CPA 2019 distinctly outlines product responsibility, offering a detailed legal structure for consumers to claim recompense for harm or damages stemming from faulty goods. Chapter VI of the legislation is devoted to product responsibility cases, detailing the obligations of producers, vendors, and service providers. It enumerates specific bases on which responsibility can be determined, such as production errors, design imperfections, insufficient instructions or alerts, and violations of explicit guarantees.
The legislation also introduces the notion of ‘harm,’ encompassing physical injury, damage to assets (excluding the defective item itself), and psychological pain or emotional suffering. Notably, the Act dismisses claims related to financial or business losses.
Key Elements of Product Liability Case To commence a product liability case, certain components must be clearly demonstrated: • Injury: The individual must have experienced injury or damage due to a flawed product. • Flawed Product: The injury must be a direct consequence of a flaw within the product itself. • Accountability: The imperfection must be linked to the maker, distributor, or service provider.
The CPA 2019 specifies the distinct accountabilities for each entity participating in the distribution network: • Manufacturer Accountability: A producer is accountable for any injury resulting from design flaws, production errors, or the failure to honor warranties or provide sufficient guidance. • Service Provider Accountability: A service provider can be deemed responsible if their carelessness or non- compliance with legal norms causes injury. • Seller Accountability. Vendors might also bear responsibility if they exert significant control over the product or neglect to offer proper instructions or alerts.
Protections and Exemptions: The Consumer Protection Act of 2019 outlines multiple defenses against claims of product liability. For example, a producer of goods isn’t responsible for injuries stemming from the improper use or modification of the item by the user. Likewise, if the producer has supplied sufficient cautions or guidelines, they might not be deemed responsible for any ensuing damage. The legislation also considers exceptions for producers when the product is utilized under particular circumstances, such as in factory environments or by experts under skilled oversight.
Sanctions and Implementation: The Consumer Protection Act of 2019 enforces severe repercussions upon producers, vendors, and service entities deemed accountable for faulty goods. Consumer tribunals, alongside the Central Consumer Protection Authority (CCPA), possess the jurisdiction to mandate the withdrawal of perilous products, remunerate purchasers, and levy punitive reparations for carelessness. When it comes to deceptive marketing, the legislation stipulates incarceration and substantial monetary penalties for those at fault.
The CCPA holds a pivotal position in the application of the Act’s stipulations, ensuring the preservation of consumer entitlements and the compliance of manufacturers with safety protocols. This body is endowed with the capability to scrutinize infringements, command product retrievals, and undertake requisite measures to safeguard consumer welfare.
Possible Defences To A Product Liability Case: When diving into the concept of ‘product liability,’ it becomes evident that for a claim to hold, the complainant has to demonstrate ‘damage’ caused by a ‘faulty’ item. Thus, proving that the item is not ‘faulty’ and that no ‘damage’ occurred to the consumer through its use can serve as strong defenses in a product liability case.
Furtherrnore, Section 87 of the Act outlines the following defenses to a product liability claim: • For a claim directed at a product vendor, it can be defended by showing that at the time of the alleged damage, the item had been misused, altered, or modified. • Ifthe claim is against a product manufacturer for not providing sufficient warnings or instructions, the following defenses apply: o the item was obtained by an employer for workplace use, and the manufacturer had provided the necessary warnings or instructions to that employer; o the item was sold as a component to be used within another product, and the appropriate warnings were provided to the buyer of that component, yet the damage was caused by the end product in which that component was used; o the item was intended to be utilized or dispensed only under the supervision of specialists, and the manufacturer took reasonable steps to provide the necessary warnings or instructions to such specialists; or o the complainant was under the influence of alcohol or unauthorized prescription drugs while using the item. • Additionally, a manufacturer cannot be held liable for failing to warn about a danger that is obvious or widely recognized by the user or consumer of the item, or that the user or consumer should have known, considering the nature of the item.
Addressing a product liability claim demands prompt action, starting with a thorough internal review, expert evaluation, and followed by necessary preventive measures, including adequate disclosures and recalls if warranted.
Conclusion: The Consumer Protection Act, 2019, represents a significant stride forward in India’s consumer defense landscape, notably with its formalization of product accountability. By delineating explicit duties for producers, vendors, and service providers, the Act aims to ensure that faulty products do not evade scrutiny, and consumers have a straightforward route to claim redress for any damage incurred. This legal structure symbolizes India’s adjustment to the worldwide movements in consumer protection, acknowledging that the swift growth of technology, online shopping, and international commerce presents fresh hurdles for guaranteeing product integrity and responsibility.
The notion of product liability within the CPA 2019 also marks a shift from the conventional “buyer beware” attitude, embracing a more contemporary “seller beware” outlook, where responsibility within the supply chain is emphasized. This alteration transfers the obligation onto manufacturers, retailers, and service providers to verify that their offerings comply with safety and quality benchmarks, or else they face substantial legal consequences.
However, the effectiveness of the Act is contingent upon its implementation. While it endows consumers with power, the responsibility rests with regulatory authorities and the judiciary to ensure rigorous adherence to its clauses. The creation of the Central Consumer Protection Authority (CCPA) is a promising move towards strong enforcement. Nonetheless, ongoing oversight, public enlightenment, and swift judicial actions will be crucial to thwart consumer mistreatment and guarantee that firms remain alert in upholding product standards.
As India maneuvers through an increasingly interconnected, digital marketplace, the CPA 2019 holds the promise to protect consumers and elevate the nation’s consumer protection benchmarks to international standards. Manufacturers, vendors, and service providers must be vigilant regarding their duties under this legislation, as any oversight could result in hefty penalties. In essence, the Act not only strengthens consumer trust but also motivates businesses to uphold ethical standards, cultivating a marketplace where consumer welfare is the utmost priority.
Reference: Primary Sources 1. The Consumer Protection Act, 2019 (India). 2. Ministry of Consumer Affairs, Food and Public Distribution (India). (2019). Consumer Protection Act, 2019.
Secondary Sources 1. Dubey, B., Khattar, S., & Singh, A. (2022). Product Liability under the Consumer Protection Act, 2019: An Overview. 2. Walkowiak, V. S. (1979). Product Liability: Litigation and the Concept of Defective Goods: Reasonableness Revisited. Journal of Air Law and Commerce, 44(4). 3. Ghosh, A., & Ray, N. C. (2022). Product Liability Law in India: An Evolution. Mondaq. 4. Sethi, S., & Janardhanan, B. (2022). Product Liability under the Consumer Protection Act, 2019: Let the Manufacturer/Seller Beware! Bar and Bench. 5. Pinsent Masons. (2022). Product Liability under the Consumer Protection Act.
Source: Legal Service India