10. Product liability
This chapter discusses the law on product liability. Common law product liability is based upon the law of negligence. Beginning with the narrow ratio in Donoghue v Stevenson (1932), it further developed the concept of intermediate examination in Grant v Australian Knitting Mills (1936). The relevant statute is the Consumer Protection Act 1987 (CPA 1987), passed in response to a European Union Directive. This introduces strict liability, when a defective product causes damage. The CPA 19876 establishes a hierarchy of possible defendants beginning with the producer. Defences under the CPA 1987 include the ‘development risks’ defence to protect scientific and technical innovation. If damage relates to quality or value, the only remedy will be in contract.