Product Liability Act (ProdHaftG): An Introduction

Strict liability for defective products was introduced universally throughout the whole of the EU through the European Directive 85/374/EEC of 25.06.1985 – the EC Product Liability Directive. This directive was implemented in Germany through the Product Liability Act, which has been in force since 01.01.1990.

§ 1 of the Product Liability Act states:
“If, as a result of a product defect, a person is killed, injured or suffers damage to his health, or an item is damaged, the producer of the product shall be liable to pay compensation to the other party for the resulting damage. In the case of material damage, this rule shall only apply if an item other than the defective product is damaged and this item is normally intended for private use or consumption and has been used by the injured party primarily for this purpose.”

Under the Product Liability Act, liability shall be accepted for any death, bodily injury, damage to health or material damage caused by the defective product. However, damage to an item used for corporate, business, commercial or professional purposes, cannot be compensated under the Product Liability Act.

Example: If a producer’s brass pipe nipples are built into commercially used water pipes and the small  incorporated parts ultimately damage the water pipe as a whole, no compensation claims can be made on the basis of the Product Liability Act. As the water pipe is not an object which is normally intended for private use or consumption, the Product Liability Act does not apply.