Product Liability: Violation of a Protected Right

Compensation can only be claimed under § 823 para. 1 of the German Civil Code if the listed protected right – body, health, property – has been damaged.

From a case law perspective, the affected item does not necessarily have to have been harmed or destroyed for damage to property to have occurred. A restriction of its intended use is sufficient. However, in principle compensation must be paid for destroying other items due to the “producer goods”: By contrast, damage on the actual defective product – a built-in motor catches fire and destroys not only the machine but also itself – will only be compensated under the most limited conditions. This is the case because otherwise the boundary between the purely contractual liability of the seller and the interesting liability in tort of the producer would
become blurred. The details here are very complex and cannot be described within the scope of this Safety Compendium.

 

Product Liability: Distribution of the burden of proof and special features

Distribution of the Burden of Proof

The success of a product liability case depends largely on the burden of production and proof. The underlying principle is that the claimant always has to prove all the foundations of his claim. Under the Product Liability Act, the injured party must prove the defect, the causal relationship between the defect and the damage and the damage itself. It is assumed that the defect was present as the product was put into circulation. The producer is excluded from liability if he can prove that the defect did not exist at the time when it was put into circulation.

Such a circumstance is conceivable particularly in a situation where a sub-product is initially free from defects, but becomes defective due to the specific way in which it is used, i. e. incorporated into the finished product. Take a scenario in which pipes that are intrinsically free from defects but are only suitable for normal pressure loads are built into a machine exposed to high pressure loads without consulting the producer. The producer shall not be liable if the pipes burst due to the high pressure.

Special features of the Product Liability Act

The Product Liability Act provides for a maximum liability payment per claim of EUR 85 million (approx. 109 million USD); a basic amount of EUR 500 (approx. 640 USD) will not be compensated. As such, the injured party shall bear a loss of EUR 500 on the material damage.

Claims under the Product Liability Act fall under the statute of limitations after three years. The limitation period begins from the day on which the plaintiff became aware, or should reasonably have become aware, of the damage, the product defect and the identity of the producer. All claims shall end ten years after the product has been put into circulation.