Consequences Of Brexit For Product Liability
(International import from and to the UK, via the Netherlands, to Europe has an effect on 32% of the international companies-preliminary study by SME institute | editor LBW)
It will not have escaped you that the British voted for the United Kingdom (UK) to leave the European Union (EU). Many individuals and businesses are taking stock of the situation: what impact will Brexit have on me? This article discusses what implications Brexit will have for the question of who is regarded as the producer as defined in the product liability regulations laid down in book 6, title 3, part 3 of the Dutch Civil Code (article 6:185 et seq.).
From internal importer to external importer If you import a product from the UK, you are an ‘internal importer’ because you import the product from another EU Member State. As an internal importer, you are not automatically considered the producer as defined in the product liability regulations: after all, you are not the manufacturer or name giver of the product.
Any party that brings a product into the European Economic Area in order to distribute it in the context of its commercial activities (what is referred to as an ‘external importer’) is indeed regarded as the producer in the sense of these regulations. As a result of Brexit, your status will change from that of an internal importer to an external importer, therefore.
Consequences Another article on this knowledge page discussed the term ‘producer’ in article 6:187 (2) to (4) of the Dutch Civil Code. That article explained why it is important to know whether you are considered the producer or whether another party in the chain can perhaps be designated the producer. After all, it is the producer that is liable towards the injured party for any damage caused by a defect in its product (article 6:185 of the Dutch Civil Code).
If it cannot be determined who the producer is, every supplier is regarded as the producer (paragraph 4 of article 6:187 of the Dutch Civil Code). Even if the ‘external importer’ is unknown, this ensures that the injured party can easily enforce its claim within the EU against the party that supplied him with the product.
The supplier’s liability expires, however, as soon as it discloses the identity of its own supplier or the producer within a reasonable time frame. So as an internal importer, you could, if sued for product liability, escape the risk liability of article 6:185 et seq. of the Dutch Civil Code by referring the injured party to your own supplier (most likely the manufacturer) in the UK. You could ‘pass on’ liability therefore.
After Brexit, once you become an ‘external importer’ with regard to products from the UK therefore, this possibility of passing on liability no longer exists. Your customers will then be able to refer the injured party to you.
Article 6:187 (4) of the Dutch Civil Code stipulates:
‘Where the producer of a product cannot be identified, each supplier shall be treated as its producer, unless he informs the injured party within a reasonable time of the identity of the producer or of the person who supplied him with the product. Where, with respect to a product imported into the European Economic Area, its importer cannot be identified, each supplier thereof is likewise considered as a producer, unless he informs the injured person within a reasonable time of the identity of the importer in the European Economic Area or of a supplier within the European Economic Area who supplied the product to him.’
In short: as an external importer, you are ultimately responsible in the sense of the product liability regulations. The reasoning behind this is that the party that imports a product from a country outside the EU should bear the risk of damage because that party is the one that can best estimate the risks.
Conclusion As a result of Brexit, your status as an importer of products from the UK suddenly changes from that of an internal importer to an external importer, so from someone who can easily escape the risk liability of the product liability regulations by naming your supplier in the UK to someone who ultimately bears the risk liability (and to whom your customers can in fact refer).
You should take this into account in (revising) your contractual relationships with your trade partners in the UK and with your customers within the EU: in order to manage the risks that apply for you, it has become even more important therefore to contractually provide for and document the obligation to bear responsibility for damage caused by a product from the UK.