Product Liability under Consumer Protection Act, 1986 & 2019

Product liability is a legal concept that holds manufacturers, sellers, distributors, and others in the supply chain accountable for any injuries caused by defective or unsafe products. Under Indian law, the evolution from the Consumer Protection Act, 1986 to the Consumer Protection Act, 2019 significantly strengthened the provisions related to product liability, making the 2019 Act more aligned with global standards on consumer rights and safety.

Product Liability under the Consumer Protection Act, 1986

The Consumer Protection Act, 1986 was a seminal law in establishing consumer rights in India, but it did not have explicit provisions labeled as “product liability.” Instead, it addressed the broader concepts of “defects” and “deficiencies” and provided for compensation based on these allegations. The 1986 Act enabled consumers to file complaints regarding defects in goods or deficiencies in services, which indirectly covered issues that would fall under product liability.

Defects and deficiencies were the key terms used, where:

• A “defect” referred to any fault, imperfection, or shortcoming in the quality, quantity, potency, purity, or standard which is required to be maintained by or under any law for the time being in force or under any contract, express or implied.
• A “deficiency” meant any fault, imperfection, shortcoming, or inadequacy in the quality, nature, and manner of performance required to be maintained by or under any law for the time being in force or has been undertaken to be performed by a person in pursuance of a contract or otherwise concerning any service.

Consumers could seek redressal through the district, state, or national consumer disputes redressal commissions, depending on the value of the goods or services involved.

Enhancements in the Consumer Protection Act, 2019

The Consumer Protection Act, 2019, introduced explicit provisions for product liability, significantly expanding the framework within which consumers can claim compensation for harm caused by products.

Major components of Product Liability under the 2019 Act include:

1. Who can be sued: The Act broadens the range of parties that can be held liable for harm, including product manufacturers, product service providers, and sellers.
2. Product Manufacturer Liability: A product manufacturer is liable in a product liability action if:
   1. The product contains a manufacturing defect.
   1. The product is defective in design.
   1. There is a deviation from manufacturing specifications.
   1. The product does not conform to the express warranty.
   1. The product fails to contain adequate instructions for correct use or warnings regarding improper or incorrect use.
3. Product Service Provider Liability: A product service provider is liable in a product liability action, if:
   1. The service provided was faulty or imperfect.
   1. The provider was reckless or negligent.
4. Seller Liability: A seller can be held liable if they have exercised substantial control over the product’s design, testing, or instructions/warnings, sold the product while knowing about the defect, or failed to exercise due diligence in assembling or maintaining the product.
5. Defenses Available: The Act also outlines several defenses available to product sellers and manufacturers, such as that the product was misused, altered, or was compliant with existing mandatory regulations when it entered the marketplace.

The introduction of explicit product liability provisions in the 2019 Act provides a robust framework for addressing consumer grievances related to defective products more effectively. It allows for clearer assignation of responsibility and ensures that manufacturers, service providers, and sellers maintain high safety standards. This proactive approach to consumer protection reflects a significant shift from the more reactive approach under the 1986 Act.

Product Liability Case Laws

Product liability case laws help shape the understanding and enforcement of product liability provisions under the law. These cases illustrate how courts interpret regulations concerning defective products causing harm to consumers. I will outline a few significant case laws primarily related to product liability, under both international and Indian contexts, to showcase how such legal principles have developed and are applied:

International Case Laws

1. Donoghue v. Stevenson (1932) – UK
   1. This landmark case established the modern concept of negligence, laying down the general principles where a manufacturer owes a duty of care to the consumer. In this case, Mrs. Donoghue fell ill after consuming a ginger beer that contained the remains of a decomposed snail. She successfully sued the manufacturer, although she had not bought the drink herself.
2. Liebeck v. McDonald’s Restaurants (1994) – USA
   1. Popularly known as the “McDonald’s coffee case,” this lawsuit involved Stella Liebeck, who suffered third-degree burns from hot coffee purchased from McDonald’s, leading to an initially awarded sum of $2.86 million by the jury (later reduced on appeal). This case is a pivotal example of product liability concerning the temperature at which food and beverages are served.

Indian Case Laws

1. Jacob Mathew v. State of Punjab & Anr (2005)
   1. This landmark judgment by the Supreme Court of India differentiates between negligence and accidents, providing significant insights into standards for accountability, particularly in medical profession cases. Though not directly about manufactured goods, it lays foundational concepts applicable in product liability scenarios.
2. Indian Medical Association vs V.P. Shantha & Ors (1995)
   1. In this case, the Supreme Court opined that the services provided by medical professionals fall under the scope of the Consumer Protection Act making them liable under the act. This was a significant judgment, widening the ambit of the term ‘service’ to include professional services, thus implying implications for liability cases.