What is product liability?
Product liability refers to the legal responsibility that businesses in a supply chain have for any harm caused by unsafe or defective products. The main laws covering this are the Consumer Protection Act 1987 and the General Product Safety Regulations 2005, which together require that all products sold to consumers in the UK must be safe.
Product liability rules determine who is at fault when things go wrong and what kind of compensation a consumer can claim. It covers everything from design flaws and manufacturing defects to incorrect marketing or a failure to warn about potential risks.
Who is responsible for an unsafe product?
Responsibility for product safety isn't limited to one party; it's shared across the supply chain. However, the level of responsibility varies depending on your role.
Producers
The main responsibility for product safety rests with the producer. This isn't just the manufacturer. A producer can be:
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the manufacturer of the final product or a component part
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an importer bringing the product into the UK
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a business that puts its own brand on a product made by someone else (eg an own-brander)
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any business that changes a product’s safety, for example, by servicing or reconditioning it
Producers must actively ensure their products are safe by carrying out risk assessments, providing clear warnings and instructions, and monitoring products once they're on the market.
Multiple businesses are often involved in making a single product (eg by supplying different components). In these cases, they can be held jointly liable for any harm caused by the finished product, depending on the reason for the safety failure.
Distributors and sellers
Distributors (like wholesalers) and sellers (like high street shops or online retailers) also have a role to play. While they aren't usually liable if they can identify the producer, they can be held responsible if they:
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sell a product they know (or should have known) is unsafe
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can't identify the producer of an unbranded product within a reasonable time when asked by the person who suffered harm
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affect the product’s safety themselves
What happens if a product is unsafe?
If an unsafe product causes harm, the consequences for the responsible business can be serious. These can come from two different directions: consumers making claims and official enforcement action.
Consumer compensation claims
A consumer who is injured or has their private property damaged by a defective product can make a compensation claim. Claims for property damage are only possible if the damage costs at least £275. If the claim is for less than this amount, a consumer may still be able to make a claim for negligence, but they have to prove that the seller or manufacturer was careless and that this directly caused the damage.
Generally, a consumer should first contact the business that sold them the product, providing evidence of the damage. If the person harmed didn't buy the product (eg it was a gift), they can claim directly from the manufacturer. If the dispute can't be resolved, it may go to an alternative dispute resolution (ADR) scheme or to court. If you receive a claim, our Dispute resolution service can help you communicate with the other side and work towards a solution.
It's important to be aware that there are strict time limits for making such a claim. For claims under the Consumer Protection Act 1987, a consumer generally has three years to start a claim from the date of the injury or from when they became aware of the issue (whichever is later). There is also a final deadline of 10 years from when the product was put into circulation, after which no claim can be made. For a detailed explanation of how these time limits work, read Statute of limitations.
Enforcement action
Enforcement authorities, like local Trading Standards departments, can also take action. This can range from issuing warnings and forcing a product recall to imposing heavy fines. In the most serious cases, where a business has shown a reckless disregard for safety, criminal prosecution leading to imprisonment is possible.
Can a business defend against a product liability claim?
Yes, there are several legal defences available if your business faces a product liability claim. The main ones are:
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compliance with the law - the defect was an unavoidable result of the producer having to comply with a legal requirement
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not supplied - the business didn't supply the product (eg it was stolen or a counterfeit version)
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not in the course of business - the product wasn't supplied as part of a business activity or with a view to profit (eg it was supplied by a charity)
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defect appeared later - the defect that caused the damage didn't exist when the business supplied the product
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development risks - the state of scientific and technical knowledge at the time meant the producer couldn't have been expected to discover the defect
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component parts - for a business that made a component, it can argue the defect was due to the design of the final product or the final manufacturer's instructions, not their component
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contributory negligence - the consumer’s own actions contributed to the harm they suffered. For example, they ignored clear safety warnings, failed to follow instructions, or used the product in a way it was never intended for. This may not remove liability completely, but it can reduce the amount of compensation owed
How can a business manage product liability risks?
Beyond knowing your legal defences, you can take proactive steps to protect your business.
Get the right insurance
Given the significant financial risks associated with product liability claims, it's highly recommended that businesses have appropriate insurance. Product liability insurance is designed to cover the cost of compensation claims for personal injury or property damage caused by a defective product. It can protect your business from legal fees and compensation payouts. For more information on different types of cover, read Business insurance.
Use robust legal documents
It’s vital to manage your product liability risks with clear internal processes and robust legal documents. You can set out your responsibilities and limit your liability where legally possible if you make Terms and conditions, Website terms and conditions, and/or a Sale of goods agreement.
For more information on selling goods, read Doing business with consumers. If you have questions about product liability, don't hesitate to Ask a lawyer.
