Legal claims against UK importers of EU products to increase post Brexit

It’s not just tariffs that UK importers have to prepare for from 1 January 2021.  They will also be taking on new liabilities for defective products imported from the EU which cause personal injury or damage to private property.

Currently, it’s the EU manufacturer (or the EU business which first imports the product from outside the EU) who is responsible for these claims.  Unless the UK importer has a contract with the injured individual, it will not be directly liable unless its branding is on the product.

From 1 January 2021 that is all going change.  Amendments made by Brexit legislation to the Consumer Protection Act 1987 will make the UK business which first imports the product from the EU liable.  Now, for example, if a boiler imported into the UK from a French manufacturer explodes and causes injury, it is likely to be the UK importer which finds themselves being sued, rather than the French manufacturer.  This is a huge change after 30 years of the EU manufacturer having primary liability for these claims.

UK importers will need to adapt to the increased possibility of being sued from 1 January 2021.  They should revisit their insurance arrangements to make sure these claims are covered.  They should also put in place clear contractual arrangements with their EU suppliers to ensure losses can be recovered and help is provided to defend legal claims.

In another big shift in legal responsibility, UK importers will also be taking on additional regulatory responsibility for the safety of products imported from the EU. The General Product Safety Regulations 2005 set out a regulatory regime imposing a series of statutory obligations on those who produce and distribute many types of products, enforceable by criminal sanctions.

Currently, the EU manufacturer takes on the largest responsibility under the Regulations.  They have a duty to ensure only safe products are placed on the UK market.  They also need to keep themselves informed of risks with the products, warn consumers if risks are discovered and keep a record of complaints.  In serious cases, they will need to notify the appropriate regulator and take suitable remedial action to deal with risks, including a product recall where necessary.

UK importers do have regulatory responsibilities as well, but these are currently less extensive and include not supplying products they know to be unsafe and participating in monitoring the safety of products on the market.

From 1 January 2021, UK importers will take on the manufacturers’ legal responsibilities unless a UK Representative is appointed by the EU manufacturer to carry out these duties.   Given that it can be a criminal offence not to comply with these statutory responsibilities, UK importers need to take this very seriously.

The Regulations do, however, allow UK importers to rely on information supplied by another, such as the EU manufacturer, to avoid committing a criminal offence.  The importer would need to show that it was reasonable to rely on the information received, the steps taken to verify the information and whether there was any reason to disbelieve the information. We would expect UK importers to work much more closely with EU manufacturers post Brexit to ensure compliance with their regulatory obligations.

Changes to product safety rules from 1 January 2021 will impose additional practical obligations onto UK importers from the EU (unless the EU manufacturer appoints a UK  Representative):

1. UK importers will have to provide their name and address and any product code when supplying products so that customers have this information if the product turns out to be unsafe.
2. UK importers will also have to provide consumers with information about the risks of using the product and how those risks can be mitigated. In most cases the manufacturer will already supply this information with the product but it will now be the UK importer who is liable if the information is missing.

Equally, UK businesses exporting products to the EU are going to find the same happening in the EU in reverse.  EU importers are now going to be directly liable in their home courts if a UK exported product turns out to be unsafe and causes personal injury or damage to private property.  UK exporters should expect their EU customers to seek contractual protection that claims will be covered and assistance provided for defending legal claims.

Practical steps all UK importers should be taking

1. Assess the range of products you are importing from the EU and identify those which might cause personal injury or damage to property if they are defective.
2. Speak with your insurance broke to check you have adequate cover and legal expense insurance in case you are sued for an unsafe product you have distributed in the UK.
3. Review the contractual terms you have in place with your EU manufacturer or EU supplier and make sure that they will cover any compensation you are required to pay for unsafe products and that they will help you deal with any claims.
4. Check with your EU manufacturer whether they have or will be appointing a UK Representative for dealing with the UK Regulator with responsibility for the safety of the products you import.

Clarkslegal’s team of product liability lawyers is here to help if you have any concerns about products you are importing into the UK.