Key elements of product liability

Product liability refers to liability for damages caused by a product to a person or property used for private purposes. Product liability does not cover damage caused to the product itself. In the context of product liability, a product refers to a movable object, and not, for example, to a service.

According to the Product Liability Act, compensation must be paid for damage caused by the product not being as safe as expected. When assessing safety, account shall be taken of the time at which the product was put into circulation, the foreseeable use of the product, the marketing and instructions for use of the product and other factors.

It is for the injured party to prove the damage, the inadequate safety level of the product and the causal link between the inadequate safety level and the damage. An action for compensation must be brought within three years of the date on which the claimant became aware, or should have been aware, of the occurrence of the damage, of the inadequate safety level of the product and of the liability for compensation.

Product liability is strict liability independent of fault. Thus, the company may be liable for compensation even if it has not acted negligently.

According to the Product Liability Act, the manufacturer, importer, issuer and marketer are liable for damages. The marketer’s liability requires that it has marketed the product that caused the damage as its own or that the product bears the marketer’s name, trademark or other distinctive symbol.

Companies involved in the product distribution chain may seek to agree on their division of responsibilities in product liability matters by mutual agreement. However, the injured party’s right to compensation under the Product Liability Act cannot be restricted.