November 14th, 2011

Continental European Legislative and Judicial Trends: The Norwegian Product Liability Act

Posted at 1:00 AM ET

David Lewin, Managing Director

Introduction

Product Liability Under Norwegian Law

Several laws, including non-statutory law, govern Norwegian product liability and apply to all businesses producing or selling a product. According to these laws, Norwegian businesses are responsible for ensuring that their products are safe and do not pose a hazard to consumers. Moreover, businesses may be held liable for any damage and/or harm caused by their products.

Under Norwegian law, product liability claims typically fall into three categories: negligence, strict liability and contractual. Negligence claims against manufacturers are based on customary norms derived from court rulings and legal theory. Strict liability under the Product Liability Act (produktansvarsloven) focuses on the product and the damage it causes, rather than the negligent behavior of the manufacturer. Finally, product liability may be based on the breach of contractual obligations under the Norwegian Purchase Act (kjøpsloven). An example would be a defective product that does not possess contractually promised properties. Those who submit product liability claims may choose among these three systems. The use of one in a claim does not preclude use of the others.

Legislative Development of Product Liability in Norway

The Norwegian Product Liability Act, which deals with strict liability, became effective on December 23, 1988, but the legislative work was commenced by Royal Decree (kongelig resolusjon) of March 21, 1975. The enactment of the Product Liability Act was initially postponed pending the outcome of parallel, similar legislative work by the European Union (EU), which resulted in the adoption of the Product Liability Directive of July 25, 1985. The Norwegian Ministry of Law subsequently incorporated the Product Liability Directive into the Norwegian Product Liability Act, so the two are in agreement with each other.

The Product Liability Act and Key Provisions

Range of Application of the Product Liability Act

Section 1-1 of the Norwegian Product Liability Act applies to the liability of a producer for damage caused by a product made or supplied for sale as part of its profession, business or equivalent activity.

Section 1-3 of the Product Liability Act includes not only the manufacturer in its definition of “producer,” but also the person importing a product for sale or distribution in the course of its business. Therefore, the term “producer” in the Product Liability Act encompasses manufacturers, importers, suppliers and sellers, among others, ensuring that nearly everyone in the chain of distribution may be held responsible.

Based on Section 1-2 of the Product Liability Act and also Article 2 of the EU Product Liability Directive, the term “products” includes goods and movables, whether a natural product or industrial product, raw material or finished product, part product or main product, as well as products incorporated into other movables or real property. The term “products” includes electricity as well.

Causation and Proof

As a general rule, the claimant has the burden of proof and must establish the factual basis for its claim under the three systems of liability: negligence, or fault-based liability; strict liability under the Product Liability Act; or contractually-based liability under the Norwegian Purchase Act.

If a claimant presents evidence that the court considers prima facie proof of a fact relating to any of the conditions for liability, then the producer has the burden of submitting evidence to rebut the presumption. With respect to claims based on the Product Liability Act, the producer must refute claims in accordance with Section 1-3.

Under Section 2-1 of the Product Liability Act, the manufacturer must compensate for damages that its product causes if it is found that the product does not have the safety that a user or the public may reasonably expect - it has a safety deficiency (sikkerhetsmangel). In this case, the user must prove that the product has caused the damage in question and that this damage must be the result of the safety deficiency.

Remedies and Damages Recoverable

Liability damages under the Product Liability Act are awarded as monetary compensation, aimed to restore users to their position prior to any damage. Damages recoverable under the Product Liability Act include personal injury claims relating to bodily injuries and mental harm. Damage to property is also recoverable, provided that the property is meant for private use or consumption and was used by the claimant mainly for private purposes or consumption.

Additionally, Section 3-5 of the Product Liability Act provides compensation for pain and suffering (non-material damages) if the damage is caused intentionally or is the result of gross negligence.

Defenses

According to Section 2-2 of the Product Liability Act, the producer is free from liability if it can demonstrate: (1) that it did not supply the product for sale as part of its activities; (2) the safety deficiency did not exist at the time when the product was supplied for sale and that there was no obligation to avert the damage or to minimize it afterwards; or (3) the reason for the safety deficiency was that the product satisfied peremptory rules issued by a public authority.

Limitation of Liability

Article 16 of the EU Product Liability Directive allows for the option of limiting a producer’s liability for damage resulting from death or personal injury caused by identical items with the same defect (serial damages), and this limit may not be less than EUR 70 million. Norwegian legislators have decided not to exercise this option. However, the acts on tort law in Norway provide a general rule that allows damages to be reduced if it is just and fair with regard to the economic circumstances of the wrongdoer.

Trends and Updates

In recent years, there have been no major new trends or developments in product liability law in Norway other than the provisions allowing for group claims under the Civil Dispute Act.

Inherent Risks Users May Have Accepted

The Norwegian Supreme Court ruled that products with inherent risks may be regarded as accepted by the user at the time of purchase. On January 26, 2004, the Supreme Court ruled that a user did not have a claim for compensation after being exposed to allergenic dental care products. The Supreme Court emphasized the necessity and usefulness of the product, and further, that the user knew about the risks.

Damages Caused by a Product Do Not by Themselves Lead to Liability

In a decision by the Appellate Court on September 14, 2010, an insurance company that paid compensation to a policyholder after a fire in a laundry machine sought recourse against the importer of the machine. The importer was acquitted because the insurance company failed to prove beyond the balance of probabilities that the fire was de facto caused by a safety deficiency. The decision highlighted that damages caused by a product do not by themselves lead to liability under the Product Liability Act. Further, the decision illustrates that product users have an uphill climb if they do not have secure evidence for the case at hand.

Click here to register to receive e-mail updates >>

AddThis Feed Button
Bookmark and Share


Related Posts