Product Liability: Producers and Other Responsible Persons

In accordance with § 1 para. 1 of the Product Liability Act, the producer is primarily liable. This is defined as the actual producer of the finished product, component or raw material. The producer usually has a market presence as an AG, GmbH or some other company or corporate form. As a result, the company’s liability is limited.


Assembling and mere product completion
Anyone who assembles the product from parts that other producers have pre-assembled, without any in-house manufacturing (often called an assembler), is also deemed to be the producer. In practice it can be difficult to distinguish between this sort of assembler activity and product completion, which is categorized as a typical agent activity. If a product’s safety-related properties are modified, it can always be assumed that this is the activity of a producer. A relevant pointer is whether the assembly could be achieved by a layperson with no design or technical knowledge, with simple hand movements and without any special tools. Another
relevant factor is whether the assembled product represents a stand-alone product in comparison with the subproducts.


The company that assembles table frames and glass plates into bistro tables should be regarded as a producer and not merely an agent.

By contrast, the company that only apportions and packages a finished product, such as a safety switch or servo amplifier, should not be regarded as a producer.

Liability of the quasi-producer
The quasi- producer is also liable in addition to the actual producer. In accordance with § 4 para. 1 clause 2 of the Product Liability Act, any person who, by putting his name, trademark or other distinguishing feature on the product, presents himself as its producer, shall have legal equality with the producer. This means anyone who presents himself on the market as the actual producer. This liability as quasi-producer has repercussions for mail order businesses and chain stores who have goods manufactured for them and then offer the product with their own trademark or company label. The same applies to industrial suppliers who complete their full range under their own label by purchasing commodities.


The “Produced for …” tag does not justify a status as quasi-producer because the very tag illustrates the point that someone other than the product supplier is the producer. 

It is irrelevant whether it’s the actual producer or the quasi-producer who applies the name,  trademark or any other feature of the quasi-producer to the product. And neither is it necessary for the producer to give his consent before the third party mark is applied. The definitive factor in the liability of the quasi-producer is that the product is put into circulation with the name or trademark of the quasi-producer and with his approval. 

Product Liability Act: Determining the User Circle

In this context, the circle for whom the product is ultimately intended is a key factor. If the product is only intended for a specific user circle, it can be geared towards their safety expectations.
For instance, case law has ruled that the producer cannot assume that wet concrete will only fall into the hands of those who are familiar with the risk of chemical burns from wet concrete. The producer would have to aim at the least informed consumer and so should provide warnings indicating the potential for alkaline chemical burns.

If the product is only to be supplied to a specialist firm, for example, the producer may assume that the products will only be used by specialist staff. However, the picture is quite different if the producer discovers that – despite restrictive sales channels – the product has still found its way into the hands of inexperienced end users (“product migration”).

Product's User Lifecycle

Example: The laser pointer was originally developed for commercial presentation purposes but has since found its way into the daily routine, even being regarded as a toy. Where safety expectation is concerned, the producer must consider the fact that laser beams may potentially be projected into  the human eye. As a result, he must guarantee a higher safety standard than was required for the originally intended application.

However, when certain products are specifically intended for specialists – such as a relay for  electrical engineers for example – and it is clearly stated that the product may only be installed, approved and used by specialist staff, assembly instructions need not be provided for laypeople.

Product Liability: Technical Standards and Specifications

Technical norms, standards and specifications play a role in the legitimate safety expectation from the design and manufacture of products. As a starting point, the product must comply with the current state of research and science at the time it is put into circulation. However, technical specifications and norms merely represent a  minimum standard which, if undershot, might suggest a violation of the expected level of safety. The reverse
conclusion cannot be drawn in this case: A product that complies with the technical standards may nonetheless be defective in the legal sense. Technical standards may have become obsolete or may need expanding due to continued technical developments; they may have been incomplete from the start, or the content may vary from  the current state of scientific and technical knowledge for some other reason. For this reason, in the event of damage in conjunction with a certain product, the position cannot be taken that product defects are excluded in law due to compliance with the designated technical standards. Time and time again the ruling has been that  although compliance with DIN regulations indicates that the product is free from defects, in no way does it exclude the possibility that a product may be defective.


In this context, the Federal Court of Justice (BGH) emphasizes the fact that the “latest state of scientific and technical knowledge” determines the scope of the necessary protection measures. The usual standard in the respective industry is not definitive in this case; instead, alternative technically superior designs must be used by the producer as soon as they are ready for series production and are economically acceptable to the producer.

Examples: A lifting platform may be defective, for example, if it conflicts with the applicable DIN regulations or VDE recommendations and these conflicts cannot be compensated by “more intelligent” solutions.  Neither can the defect be rectified by offering the customer a supplementary set of safety components for purchase.


European standards, such as Annex I of the EC Machinery Directive 98/37/EC, also contain legal technical specifications. If the requirements of European technology law are not met, e.g. in the design of a floor sanding machine, this must be regarded as a product defect. 


However, if a gardening implement meets the existing DIN standards for example, this indicates that it is free from defects but in no way guarantees it. A defect may arise from errors in the technical design if standards have not been implemented or if individual batches suffer from material defects.

Product Liability: Product defects

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.


Types of product defect:
The “defect” is the key term in the Product Liability Act, as the product defect is the starting point for liability.

§ 3 of the Product Liability Act defines a defect as follows:
“A product is defective when it does not provide the safety which a person is entitled to expect, taking all circumstances into account, including:

• the presentation of the product,
• the use to which it could reasonably be expected that the product would be put,
• the time when the product was put into
  circulation.”

Legitimate safety expectation
It should be noted that nobody can expect one hundred per cent safety. In practical terms it’s important to distinguish between the absolute and relative hazard from a product: Each and every product carries a certain technical hazard potential, depending on its use in a specific case. Ultimately the deciding factor is how dangerous the product is – relatively speaking – compared with other products available on the market.

In other words, absolute safety does not have to be guaranteed. The thinking behind this is that unreasonable costs ought not be imposed on a producer in terms of production. Consequently he is not forced to implement every possible precaution that is technically feasible. The safety standard with which he needs to comply is limited to what is possible and reasonable. A producer must take all due diligence measures that cost less than the total amount of damages avoided by implementing them. As a result, the producer must carefully strike a balance between the threatened damage and the required safety measures.

Example: In the case of a dishwasher, where escaping water could ruin the whole kitchen, it is reasonable to install protection against rust perforation – which is technically feasible and manageable in terms of outlay – even in the face of heavy competition from the market.

The price of the product certainly plays a role in the legitimate safety expectation: The same basic degree of safety may be expected from a cheap product, but not the same overall degree of safety that would be expected from an expensive, highly developed product.

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.

An Introduction to Product Liabilty: Terminology

For decades, the German Producer Liability Act has recognized the obligations of (industrial) producers in the field of design, production, instruction and after-sales product monitoring. In 1990, this was joined by the German Product Liability Act, which stems from a Product Liability Directive from Brussels. Today, both systems apply in parallel.

From industry’s perspective, German law essentially distinguishes between contractual and statutory liability: Contractual liability is basically only considered between contractual partners, i. e. in genuine supply relationships. This issue is not dealt with any further here, although there are many pitfalls that await in contracts in cross border business, which would make an early, judicial contractual review seem a recommended course
of action.

We generally talk of the risk from product or producer liability not when it concerns contracts and disputes between suppliers but when it concerns people who assert a claim for damages: Action is brought against a product’s producer due to personal injury or material damage that his product is supposed to have caused (whether or not this is the case is generally decided after a complex process, usually involving a variety of
specialists). The injured party makes a claim against the producer for financial compensation; compensation for non-pecuniary damages may also be involved if there has been damage to health.

Two areas of statutory liability

Statutory liability is again subdivided into two categories: Liability resulting from unlawful acts, known as liability in tort, which is based on an accusation or, in legal terms, on fault. In law, fault is re-described either as “accountability” or with the expressions of guilt: “intent” and “negligence”. If the law allows the mere presence of a certain risk to be enough to justify the producer’s liability (with no interest in the question as to whether at least negligence was involved), we talk of strict liability. This comes into effect much earlier and is
therefore particularly critical for producers.

The above-mentioned liability in tort of the producer is regulated in § 823 of the German Civil Code (BGB); strict liability for defective products comes from the Product Liability Law (ProdHaftG). Its content can only be applied if the accident or damage occurred in Germany. This is also called the “scene of crime principle”. If the accident or damage occurs in a different country, the local liability law will apply in most cases. This
may be more flexible in a particular case, but may also be stricter than German law. In any case it is an unfamiliar law; in incidents abroad such as these, legal advice must be obtained quickly so that mistakes are not made out of pure ignorance.

The section that follows will look first at strict liability from the Product Liability Act and then outline liability in tort. Although in practice both liability principles can usually be applied in parallel, there may be some important differences, particularly with regard to the scope of liability. These will be dealt with separately.

Reaction Times of Safety Functions

Block diagram of safety functions

Several boundary conditions are involved in calculating a safety distance.

Determination of the reaction time in the case of external commands
If an E-STOP pushbutton acts upon an evaluation device, its reaction time is added to the reaction time of the drive-integrated safety function. It will also be necessary to add the time needed to bring an accelerated axis to standstill:

• treac = tmulti + tPMC + tramp
• tmulti = Reaction time of the evaluation device is approx. 20 ms
• tPMC = Reaction time of the drive-integrated safety functions to external signals is 6 ms
• tramp = Ramp time to standstill depends on the moved mass, speed and other application dependent
  data

Determination of the reaction time when limit values are violated

If a monitoring circuit on a drive-integrated safety function is activated, it will be necessary to add the time needed to bring the accelerated axis to standstill. 

• treac = tPMC + tramp