For a number of years now an interesting issue has been simmering about whether a business entity has a strict cause of action for damage to its commercial property because of the combined effect of Section 41 of the Consumer Protection Act 1987 and “safety regulations” introduced pursuant to part II of that Act.
Section 41 certainly transposes any obligation imposed by such a safety regulation into an actionable duty owed to “any person” who may be affected by a contravention, but there has been a healthy debate about how all the different legal strands involved correctly fit together – both for consumers and non-consumers.
The very recent decision in Wilson v Beko 2019 provides some answers at first instance relevant to the position of consumers, but will only fuel efforts on the part of businesses to reach for a strict liability in regard to unsafe products; specifically electrical products that are unsafe when judged against the Electrical Equipment (Safety) Regulations 1994.
The case involved an attempt to assert a strict liability against the UK distributor of white goods manufactured in Turkey. Mr John Wilson purchased a Beko fridge freezer in 2005. The model in question was subject to a product recall in 2011 following a death in 2010. There was a further death in 2014. On 9 August 2016, John Wilson died during a house fire and his wife and other members of his family suffered serious injury during the incident.
The inquest into Mr Wilson’s death found that the fire was caused by a faulty component in the Beko fridge freezer. The claimants, which included Mr Wilson’s representatives, claimed damages for personal injury and property damage arising from the fire. Beko admitted in its defence that it is “likely on the balance of probabilities” that the fire started in the fridge freezer.
The case had to succeed, if at all by reference to the 1987 statute, under the combination of Section 41 and the 1994 Regulations. This was because the claim was out of time under part I of the Act. The claimants failed in the attempt to show that Section 41, in conjunction with the relevant safety regulations, gave rise to any cause of action in favour of consumers that was independent of and beyond the conventional cause of action under part 1 of the Act. The Court found that part I of the Consumer Protection Act 1987, together with the European Directive that it implemented, provided a comprehensive and exclusive regime in regard to any liabilities within the scope of the Directive. Since the Directive was concerned with establishing what were to be the strict rights of consumers on a uniform equal basis across the EU, it was not open to find any form of such strict liability other than that provided for expressly by the Directive; which meant no strict liability other than as per part I of the Act. So, the door is closed on any alternative basis of strict liability in favour of consumers.
However, when dealing with that “harmonisation principle”, on several occasions in his judgment the judge was careful to state that claims in regard to loss and damage to commercial property were wholly outside the scope of the Directive, so that there was nothing within his findings that of themselves would preclude a similar claim by a business where an unsafe electrical product caused damage to commercial property. At first sight this may seem a little curious in that the consumer does not have a wider or more extensive remedy by reference to s 41(1) of the Consumer Protection Act 1987 and safety regulations and yet a business might well.
It is important to state that this is really just the next round in the debate as to the position in regard to businesses sustaining damage to their commercial property. The Wilson v Beko case definitely advances the debate in favour of the business claimant seeking to assert this form of strict liability.
However, it is more a case of the Judge very deliberately leaving open the possibility of such a strict liability for a commercial claimant, whilst confidently closing it for the consumer.
There still needs to be a decision specifically concerned with such a commercial claim before we have truly definitive answers on every prerequisite for a successful commercial claim on the same basis. But in the meantime commercial claimants will certainly be encouraged in their white goods and other electrical equipment recovery cases. Those fixed with duties under Section 41(1) can probably expect to see an increase in commercial claimants seeking to take advantage of this route to recovery.
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