Dáil Éireann debate -
Wednesday, 23 Oct 1991

Vol. 411 No. 5

Liability for Defective Products Bill, 1991: Committee Stage.

SECTION 1.

Mr. Taylor

I move amendment No. 1:

In page 2, subsection (1), to delete line 20, and substitute the following: "(a) damage caused by death or by personal injuries, or".

I welcome the fact that in this Bill the Directive which is being implemented is given for convenience of reference in the Schedule to the Bill. This is a welcome development which I hope will be followed whenever this kind of legislation is brought before the House. All too often we have had to do tremendous research to find these documents. This precedent should be followed on all occasions.

This is a very important amendment. Something very strange has happened here. I do not know whether it is intentional. The drafting of the Bill has moved away from the wording of the Directive, although normally one is at pains to follow very exactly the wording of the Directive. The definition of the word "damage" has been changed from that contained in the Directive. It may at first sight not appear to matter but it has very serious implications, intended or otherwise.

The Bill states that "damage" means—

(a) death or personal injury, or

(b) loss of, damage to, or destruction of, any item of property other than the defective product itself.

If a defective product exploded or otherwise caused injury the Bill would provide for two categories of damage only. An injured person could get compensation for that injury and he could also be compensated for damage to any item of property. One very important category is omitted, that is, the category of consequential losses. It is an inherent and basic principle of our law, and has been for centuries, that if damage is caused a person can get compensation for injury, damage to property and consequential loss. If a car has a defective mechanism which causes it to crash, serious injury may result which may cause a man to be out of work for two years or even permanently, say in the case of loss of limbs. The consequential element, the loss of earnings, is excluded as the Bill is presented.

All will hinge on the definition of the word "damage". A person will get compensation for an injury and for any loss of property. This important category of consequential losses, including things like loss of earnings or loss of the use of an article, such as a motor car, is being specifically excluded in the wording of the Bill.

This is all the more strange when one goes back to the directive. We see that the wording of the directive has been changed. The definition of "damage" in the directive at Article 9 on page 11 of the Bill is as follows:

For the purposes of Article 1, "damage" means:

(a) damage caused by death or by personal injuries;

At first sight that might appear to be the same thing but it is very different in fact because if one adopts the wording of the directive damage caused by personal injuries would clearly include consequential losses. It seems quite clear that the intent of the directive is to include that category of damage. Damage caused by death or personal injuries includes the normal use of the word "damage" which does include consequential losses. However, because the Minister has changed the wording of the directive, he is giving an entirely artificial and limited meaning to "damage" from the position it has under ordinary law. I find that strange and I wonder is that intentional or did it work its way into the drafting of the Bill by accident.

There is another strange thing about it. If we were to adopt the Bill in its present form we would immediately be running into apparent conflict within the Bill itself. I would like to draw attention to page 3, line 19, which says:

"A word or expression that is used in this Act and is also used in the Council Directive has, unless the contrary intention appears, the meaning in this Act that it has in the Council Directive".

By that definition it is purporting to be giving a primacy of interpretation to the position in the directive which is in conflict with the definition of damage given here. In a nutshell, what it amounts to is that the definition of damages is all too limited and a meaning has been given to it that would not be in accordance with the directive, and that, I am quite sure, Deputies would not want. It is an important and very worthwhile new concept that is being brought in in the Bill. However, it seems to be limited so that one would only get compensation for the injury as a result of a bad product and for damage to other property and if one loses earnings from being put out of work for a long period, one cannot recover earnings or damages for the loss of the use of the item itself and one might have to hire another item, say, a tractor or something one used for work. I am rather puzzled about it and I hope we can correct that position.

Mr. Leyden

I want to thank Deputy Taylor for his comments on the Bill. We have incorporated the directive in the annexe to the legislation. Although Article 9 of the directive uses the same wording as that in the proposed amendment, it is felt that the terms used in the Bill — that damage means death or personal injury — is more specific than any other interpretation. In consultation with the Attorney General, we have changed the words in section 1 slightly for clarification purposes, but I am very interested in the views expressed by Deputy Taylor.

This subsection defines certain words and expressions used throughout the Bill. This is self-explanatory as the court must, in accordance with section 1 (3), construe it so as to give effect to the directive. The text is included as a Schedule to the Bill. This definition is based very closely on Article 9 of the directive. There are two elements to the damage for which the producer can be liable, damage to the person which is confined to death or personal injury — compensation for non-material damage, e.g., pain and suffering falls outside the scope of the Bill — and non-material damage, e.g. pain, suffering and anguish which shall continue to be governed by the existing law of tort. Damage to property excludes the defective product itself and property used in the commercial sphere. Damage in respect of the defective product itself is already covered in Ireland by contract law, i.e., the Sale of Goods and Supply of Services Act, 1980. That Act incorporates two important implied conditions into every contract sale: (1) that the product or goods are of merchantable quality and (2) that they are reasonably fit for the purpose for which they are intended. If a product is defective when purchased it is almost certain not to comply with at least one and in most cases both of these criteria. The present Bill does not preclude the injured person having recourse to his rights under the law of tort. This is specifically provided for in subsection (1) (d).

The EC Commission have had sight of the Bill and saw no difficulty with the wording for "damage". Though I accept the points put forward by Deputy Taylor which seem quite reasonable from the point of view that we have changed the wording slightly, it has not been changed to prevent litigation in this regard. It has not been changed to ensure that, in a sense, the litigant would be in a better position. The Attorney General saw the Bill and was satisfied with it. Indeed, he recommended the wording included in the Bill before the House. That is why at this stage, I would suggest that Deputy Taylor reconsider his amendment in light of the information and advice I have received from the Attorney General. I will bear in mind the points made by Deputy Taylor. I think consequential damage would not be excluded under Irish Law in relation to defective products. I am certainly interested in the views put forward by Deputy Taylor and maybe we could have further dialogue in relation to this matter.

Mr. McCartan

I waited to see if the Minister of State would have anything positive to say. He is clearly, as he says himself, interested in what Deputy Taylor has said but has not acknowledged that Deputy Taylor is doing quite a good service to the Government and to the House in highlighting this issue. I am always amazed on Committee Stage at the failure of anyone in the Government to admit that an error has been made. It is quite clear that what Deputy Taylor has put forward highlights a drafting error in the preparation of the legislation. He has put the case well and explained clearly the area that would be omitted by the definition of damage that was there, that is, the whole area of consequential losses arising from damage caused.

The Minister has said it is not intended that the Bill shall exclude other areas of legal remedy, namely, tort and contract rules in existing law. However, that does not go far enough. The whole intention of this leglislation is to introduce a standard of strict liability. In other words, where a defect arises and damage is caused in circumstances covered by the Bill, there is strict liability, there is no loophole where the manufacturer or the distributor can say that while an article was defective he was not negligent in any way and therefore, should, not be made answerable as the fault lies elsewhere. That has been the bane of many consumers who have sought a legal remedy for defective products. They have been simply pushed about and given the run around by various agencies, whether it be the manufacturer, producer or distributor of the goods. Quite often they have ultimately failed to get a proper or adequate remedy.

The European Commission has been deliberating on this issue since 1976 and produced a Directive in 1985. It is now forcing the Irish Government to introduce this legislation by threat of legal action under Article 169 of the Treaty of Rome. It is doing this because it wants to introduce a regime of strict liability which will avoid dancing about on the rights of consumers which has been the hallmark of the free market as we know it in Europe.

When we talk about who is entitled to compensation and in what circumstances, what amounts to damage is crucial because this lays down the parameters for when compensation can follow. It is every consumer's entitlement in those circumstances that compensation should follow on a strict liability basis, all other things being equal and covered in the legislation. If I understood the Minister correctly, he said that pain and suffering compensatory considerations were outside the scope of the Bill. That is a worrying statement and I should like the Minister to elaborate on it, if he is using it as a justification for not including in the Bill the consequential elements Deputy Taylor has addressed in his amendment. The Minister should acknowledge that the omission from the Bill of the elements highlighted by Deputy Taylor in his amendment are a serious cause of concern and agree to look at the matter between now and Report Stage. It is a matter for Deputy Taylor to decide what he does with his amendment but I would certainly regard it as a useful way of making progress in this matter.

Clearly the definition of the word "damage" in the Bill must run with the definition in the Directive. If it does not, then I can borrow this point in pursuit of an argument I want to make in relation to a later matter in the legislation. Even if it does run with the definition in the Directive it is equally an argument I want to use in the context of the definition of primary agricultural products where the Minister has slipped in the word "fisheries" in addition to what is included in the Directive. We need to talk about this point before the day is out.

Deputy Taylor has commended the scheduling of the original Directive as part of the legislation proper. As he said, this is a good way of dealing with it. It is very simple and straightforward legislation and to some degree it is an extension of the very shoddy practice which existed heretofore whereby almost every EC Directive was introduced into Irish law by way of ministerial regulation. While much the same structure was used, instead of a Bill prefacing it there was a ministerial pronouncement that he or she was bringing a Directive into Irish law. The Minister would simply sign it without any debate in this Chamber or giving us the opportunity to look at the language to see how it would fit into the judicial and legislative language of our laws.

Obviously one of the points which was not included in the information on the Bill was the addendum to the Directive that it should be introduced into domestic law by 1 July 1989, which is when this Bill should have been passed. It is a very poor reflection on both the Government and this House that we are only debating Committee Stage here today simply because the European Commission has threatened this Government with legal action before the European Court of Justice under Article 169 of the Treaty of Rome for inaction and failure to abide by the implementation deadline laid down in the Directive. I wanted to make that point because while I believe that praise should be given where it is due I equally believe that criticism should be made where it is due. Deputy Taylor has identified a very important issue in his amendment and it deserves much more consideration than the Minister has given it.

Mr. Hogan

I support Deputy Taylor's amendment which deals with a very important issue. He is seeking to ensure consistency in the implementation of European Directives in Irish law. I have often heard the Minister for Industry and Commerce say in this House that there must be consistency in regard to European legislation and that this is why he must conform as closely as possible to what is contained in a Directive. This is the perfect opportunity for the Minister to do this. There is no reason the Minister cannot conform with what is contained in this Directive which specifically states that compensation will be paid to consumers in respect of damage caused by death or by personal injuries.

With the advent of the Single Market in 1992 consumers will be able to purchase goods more easily in transborder areas. By not adopting wording which is as close as possible to the wording in the Directive the precise meaning of the word "damage" could be misinterpreted in other jurisdictions. This could cause consumers great distress and give rise to difficulties when seeking redress in other jurisdictions.

The reason we are debating this Bill today is that the Irish Government have already been found guilty by the European Court of Justice of not implementing this Directive on 26 July. The report on that case states that the Irish Government did not even inform the Commission that they were introducing legislation to conform with the Liability for Defective Products Directive. This was gross negligence on the part of the Minister for Industry and Commerce and the Government who had the audacity to turn up their noses at the Commission in respect of this Directive. This is a further indication of the anti-consumer thinking of the Minister for Industry and Commerce in relation to this matter. I do not agree with his attempts to misconstrue in whatever small way he can the common notion of redress throughout the European Community. The wording of Deputy Taylor's amendment is clearly consistent with the definition of "damage" used throughout the European Community. The fact that his wording is as close as possible to the wording used in the Directive meets with my approval, as it will eliminate the possibility of consumers experiencing difficulties in seeking compensation for damage in another jurisdiction.

Mr. Leyden

I thank the Deputies for their contributions. I want to make it clear that the change in the wording is not being made to exclude the courts from deciding on the consequential damages and losses to the person involved.

Mr. Taylor

You do not intend that to happen.

Mr. Leyden

That is not the intention.

Mr. Taylor

It may not be the intention but it may happen.

Acting Chairman (Mr. Sherlock)

Please, Deputy Taylor.

Mr. Leyden

The Bill states that the word "damage" means "death or personal injury, of..." while the directive refers to "damage caused by death or by personal injuries." We have examined that and discused it with the Attorney General. Deputy McCartan mentioned he found it frustrating on Committee Stage that we are not prepared, at times, to accept amendments. I am very anxious to accept amendments where we are satisfied they can be of benefit to the Bill. I accept that all wisdom does not exist on one side of the House even with the best advice of the Attorney General and others.

At this stage, a Cheann Comhairle, bearing in mind that I am anxious, with the consent of the House, to have all Stages passed today, I am prepared to look at the matter in the course of the day, take further advice from the Attorney General's office if necessary, and, if the House is agreeable, come back on Report Stage when this amendment would be put forward by Deputy Taylor. I suggest we move on to the next provision and that I come back later in the evening or, if we do not agree to Report Stage today at a later date, when we can have further elaboration of this section. I am suggesting this because of the views put forward by the Deputies. I did not accept this amendment initially on the advice available in my Department. It proposes to go outside the wording of the Directive, which I am not very happy about. It would be more satisfactory if we kept to the exact wording of the Directive. We received advice from the Attorney General that the wording in the Bill is more satisfactory, more specific and is closed to any other interpretation. At the end of the day the courts will rule on this legislation and the consequential losses. My information is that the Bill does not exclude what the courts would decide in relation to consequential losses resulting in death or personal injury. Surely, personal injury will result in consequential losses. It will depend on the personal injuries sustained.

I am not committed to taking Report Stage today but it can be postponed to another day. I am pepared to have a second look at this amendment from Deputy Taylor. I accept he has strong grounds for moving it in that it is contained in the Directive. I will be arguing in a few moments that we retain words in the Bill while Deputies opposite will be putting forward amendments to delete them.

Mr. Taylor

The Minister of State cannot have it both ways.

Mr. Leyden

I am being very forthright.

Mr. Taylor

The Minister of State is trying to have it both ways.

Mr. Leyden

I accept that but I am anxious to give the House an idea of what is coming later in the Bill. I am not conceding anything at this stage. When in Opposition I put forward amendments which were accepted by the then Minister, Deputy Mitchell, on the Communications Bill and others. I am of the view that there is no lessening of the authority of the Government side of the House by agreeing to well worded and well argued amendments from either side of the House. That is the case here. I assure the Deputy I will give further consideration to this matter before Report Stage — whether that is today or on another day — and I will come back to the House to argue the point further.

Mr. Taylor

I am happy that the Minister accepts my point, will examine it and come back to us on Report Stage. I want to make a number of points arising out of what the Minister said. He talked about an injured person's rights under the Sale of Goods and Supply of Services Act. I appeal to the Minister to get away from that Act when considering this Bill which is new. It brings in a whole new concept of strict liability — for want of a better term. Let us not get caught up and say we could have a claim under the Sale of Goods and Supply of Services Act.

The circumstances of a claim under the Sale of Goods and Supply of Services Act are completely different as the provisions are more restrictive. We should not hide behind the Sale of Goods and Supply of Services Act because we are breaking new ground in this Bill. Let us not run for cover to that Act under any circumstances.

I am puzzled by some of the Minister's comments. I understood him to say — perhaps I did not understand him clearly — that the concept of compensation for pain and suffering was excluded from the terms of this Bill. The Minister said that and yet he said, on the other hand, that the intention was that consequential losses should not be excluded. I beg to differ with him if he thinks pain and suffering are excluded; I do not think they are; they are included in the Bill as drafted. It would be completely unacceptable if they were excluded. The Bill as drafted includes compensation for pain and suffering because that is what personal injury is. Damage means death or personal injury. Within the ambit of the personal injury classification compensation for pain and suffering would be included. I do not know where the Minister gets the idea from that that is excluded. If that was the case it would be too much. I do not think the Minister is right about that.

The Minister went on to say there was no intention to exclude consequential losses. The fact that he concedes that point is a major step forward and I am very pleased to hear it. That may be his intention but we have to see if his intention is being put into practice in the Bill. It seems to me, in the light of what was said unintentionally, that it was not provided for. In the ordinary practice of the law for generations — I do not want to get too technical — when the word "damage" is used on its own and is not interpreted, it includes damages for personal injuries, pain and suffering, the loss of a limb or whatever, damage to property and all consequential losses. That is the standard practice.

If one did not define the word it would have the definition given to it by law. In law the word "damage" includes all those things. The Bill does not leave the word "damage" to be interpreted by law in the ordinary way. It gives it a special definition which restricts it to two specific categories, death or personal injury — compensation for the pain and suffering because of the loss of a limb or whatever — and damage caused to other property, not the item itself, but other property. If we did not have that restriction it would include the item itself — that is excluded — but other property is included.

Consequential losses are not provided for in this definition. All a court can do is look at the definition and decide if the person injured is entitled to damage. But what does damage mean? It is given a special meaning in the Bill, not the usual meaning that the word "damage" has in law, personal injury or damage to other property. Consequential losses are clearly excluded.

Deputy Hogan referred to the wording in the Directive as a small differential, it may appear small but the effect of it is very substantial. The Directive also defines the word "damage" as meaning damage caused by death or personal injuries. Damage caused by personal injury would include consequential losses. It would be very dangerous to go away from the definition of "damage" given in the Directive, which we are obliged to bring in, and introduce a narrower definition of our own.

The matter could be dealt with in either of two ways, by going back to the definition of "damage" as given in the Directive or — to cover the consequential losses item, which could be achieved — by adopting my amendment No. 4 which is related. The Minister has already signalled to us that he has to abide by the wording of the Directive where other amendments are concerned. The obligation of the House so far as the EC Directive is concerned is to bring in as a minimum what the Directive requires. There is nothing to stop the House being more generous to the consumer than the Directive requires. Some of the amendments go towards that end. It is open to the House to give what the Directive provides for, and a bit more as well. What we cannot do and what this definition is doing, is to give the consumer less than the Directive provides for. Apart from any consideration of the need to protect the interests of the consumer, I fear that here we are giving less to the consumer than the Directive requires us to do. We could find ourselves in yet more litigation on the issue as to whether we are in default on the Directive.

We have problems enough with litigation on all these sorts of things without deliberately inviting it by not complying with the wording of the Directive. I am pleased that the Minister takes the point. I hope I have not been too technical about it. I look forward to further comment on this from the Minister on Report Stage as promised.

Mr. McCartan

There was an indication earlier from the Whips that it would be good if we could deal with all Stages today. This issue is pretty fundamental. We might consider taking Report Stage another day, unless we can resolve matters later in the day. It would be better than inelegantly trying to bring in something in a hurry.

Mr. Leyden

I was interested in the points put forward by the Deputies in this area and I am prepared to listen carefully to what they have to say. The EC Directive says that the article shall be without prejudice to national provisions relating to non-material damage. That leaves all existing legislation in place. This is not a consolidation Bill which would bring forward previous legislation and make it more composite legislation. This Bill is to incorporate the Directive in Irish law. That is our clear mandate and we are sticking to it. Otherwise we would have further delays and difficulties.

The Bill supplements the existing law of tort which allows for claims for pain and suffering.

Mr. Taylor

Not on a strict liability basis.

Mr. Leyden

The EC Commission who saw the draft Bill did not have any difficulty accepting the wording. The wording put forward by Deputy Taylor is similar to the original wording in the Directive. The wording we put forward is a slight variation but it does not affect the thrust of the Bill. The Commission found no difficulty in accepting the minor alteration we put forward in consultation with our legal advisers.

Article 9 of the Directive excludes non-material damage which deals with pain and suffering and says that the article shall be without prejudice to the national provisions relating to non-material damage. At this stage we should adjourn this debate until Report Stage. I accept Deputy McCartan's point that it may be preferable to have a Report Stage on the Bill so that all in the House can be satisfied that the Bill is in line with the Directive as issued by the EC. We could have an early Report Stage with the agreement of the House and the Whips.

Acting Chairman

May I take it that Deputy Taylor is withdrawing his amendment.

Mr. Taylor

Yes, and I can reintroduce it later.

Amendment, by leave, withdrawn.

Mr. Taylor

I move amendment No. 2:

In page 2, subsection (1), line 22, to delete "other than" and substitute "including".

Amendment No. 2 deals with the definition of damage in paragraph (b) where it says damage means

(6) loss of, damage to, or destruction of, any item of property other than the defective product itself.

No doubt the Minister will say he does not have to provide for that because of the Directive and that may be so, but it would be ridiculous if a producer put out a defective product, for instance, a motor car, which self-destructs, as they used to say in a popular television programme, and it crashes into a wall and the car is wrecked and we said the damaged wall is recoverable but the car which was defective could not be claimed for under this Bill. That is the whole basis of the matter. An ordinary citizen would say that the first thing which should be recoverable is the defective item but that is the one item the Bill goes out of its way to exclude. It is the first item that should be remedied.

The Minister should not refer me to the Sale of Goods Act. I know all about it. That is different. There could be sets of circumstances where a person might not be in a position to avail of the Sale of Goods Act — different criteria have to be proved to avail of a remedy under the Sale of Goods Act. It might not be possible to establish certain facts under the Sale of Goods Act whereas it would be possible to come within the ambit of this Bill which breaks new ground and sets up new circumstances. That is the sort of category we are talking about. Why legislate so that a producer can send out a defective or perhaps dangerous product which goes wrong and a person cannot claim for it? Reason and logic rebel against it. There is no reason to exclude the item even if the Directive allows us to do so. As a matter of broad general principle the item should be included.

Mr. Leyden

The wording in the Bill in this case is the same as that contained in the Directive. We have no discretion in this matter. In any event, damage to the defective product is already covered in Irish contract law, that is, the Sale of Goods and Supply of Services Act, 1980. That Act incorporates two important conditions into every contract of sale. These are that (1) the product or goods are of merchantable quality and (2) that they are reasonably fit for the purposes for which they are intended. If a product is defective when purchased it is almost certain not to comply with at least one and, in most cases, both these criteria. In this regard I feel I am on much safer ground in opposing the amendment put down by Deputy Taylor as I am complying 100 per cent with the EC Directive. I am quite satisfied that the matter is well covered by the Sale of Goods and Supply of Services Act, 1980.

This is not a consolidation Bill as such although in Deputy Taylor's view it would be necessary to consolidate previous legislation in one Bill. It is quite clear from the Directive what is intended. In the circumstances I would recommend that Deputy Taylor, in support of his first amendment, withdraw the second amendment to ensure the legislation before the House complies 100 per cent with the wording in the Directive as approved by the European Community.

Mr. Taylor

As I said in my earlier contribution, I accept that the wording does conform with the Directive on this issue but there is nothing to stop the House, if it was minded to do so, going beyond the minima required in the Directive. The requirements of the Directive would be met if we did what they want and they would not mind for sure if we provided some additional small benefit to the consumer at the same time. That would be the intent of this amendment.

Notwithstanding my request to him not to go into the question of the Sale of Goods and Supply of Services Act, the Minister of State did go into it but let me put a situation to him. If a person buys a product which turns out to be defective and which causes damage and the person from whom he bought it is not available or amenable, has no money or the company has gone into liquidation, that person's rights under the Sale of Goods and Supply of Services Act, based on contract, would be confined to the vendor of the goods. He would have to prove negligence if he was to succeed in a claim against anybody higher up the chain were it not for the terms of the Directive and this Bill. If we were to extend the terms of the Directive by including compensation for the defective item that would meet the situation.

Let me explain what I am talking about in simple terms to the Minister of State. If a person buys an article which turns out to be defective and it destructs, as the Minister of State quite rightly said, under the Sale of Goods and Supply of Services Act they would have a claim against the person from whom they bought it. There is no problem about that provided the person or company from whom they bought it is there and amenable, but let us say that the firm or the person from whom they bought it is not amenable, has no money or has gone into liquidation, if they are to get recompense for this defective item they would have to examine the question of whether they can proceed agaist a party higher up the sale chain. They can do this provided they can prove negligence under existing law. If they can prove negligence against a person higher up the chain they would be all right but if they cannot do so and all they can prove is that the product was defective and not that there was negligence on the part of the person higher up the chain, unless that person is in a situation of strict liability they would lose out in respect of the defective item.

The purport and intent of this Bill is to introduce this new concept of strict liability without having very often the impossible requirement of having to prove negligence. Let us face it, most consumers would find it extremely difficult to prove negligence on the part of producers who have all the resources behind them. What I am saying is this: as we are very laudably introducing in this Bill this new concept of strict liability it seems in conceivable, strange and illogical that the very first item that should be included within it, the defective item itself, is the one item we single out for exclusion. One can talk about consequential losses and remoteness of damage far away from the actual causation and there is much law on that matter — but the defective item itself is at the very top of that league. Therefore, if the person from whom they bought it is gone they will not be able to avail of their rights under the Sale of Goods and Supply of Services Act and since they cannot prove negligence in that category they will not succeed unless the person is brought within the ambit of this Bill. That does not seem to be a lot to ask. I know that we are not obligated to do this under the Directive but that would be no reason not to do so if we were so minded.

Mr. O'Dea

I can see the point that Deputy Taylor is making and what he is trying to achieve. The purpose of the Bill is to introduce the concept of strict liability. It is arguable whether it will introduce that concept of strict liability as I note a certain defence is included in the list of defences which I will ask the Minister of State to consider as we have power under the Directive to seek a derogation.

Before we come to that we can anticipate what will happen in the future. The purpose of the Bill is to introduce the concept of strict liability for damage caused by defective products. Deputy Taylor is arguing that this concept of strict liability should be extended to include liability for the defect in a product as opposed to any consequent damage cause to other goods with which it was mixed. The Minister of State made the point that this matter is covered by the 1980 legislation which states that goods sold directly by a supplier to a consumer have to be of merchantable quality and have to be reasonably fit for the purposes for which they are required. Quite reasonably, Deputy Taylor made the point that if one takes an action under consumer protection legislation one does not have to establish negligence, I think, to succeed; all that one has to establish is that the product——

Mr. Taylor

That the item is defective.

Mr. O'Dea

——is not of merchantable quality or not reasonably fit for the purpose for which it is required. Deputy Taylor asked what the situation would be if the supplier has gone out of business or is no longer amenable. That is a reasonable question but I am not inclined to think, from my brief reflection on the part of Deputy Taylor's contribution that I managed to hear, that we can extend the legislation that far. One could just as easily ask if a person would have a right to bring an action, a strict liability claim, against the producer when this Bill becomes law. If the producer has gone out of business or is not amenable, should that person have a strict liability claim against the supplier? The argument in that case would be equally valid and I am sure we could think of many other situations to which we would have to extend the Bill if the logic of the amendment was accepted. I do not deny that Deputy Taylor made a reasonable point but it comes to the fact that we accept there is a no negligence liability against the immediate supplier of a defective product. However, we are seeking to extend the provisions of the Bill to a situation where the supplier has gone out of business. People go out of business, which is very unfortunate for the plaintiff, but I do not think that hardship to the plaintiff justifies extending the proposal in Deputy Taylor's amendment.

Mr. Taylor

I welcome Deputy O'Dea's contribution as far as it goes. However, the Bill puts a strict liability on producers, as defined, which includes various categories. If a producer sends out a defective product which causes injury he is liable. If the product damages other property he is also liable for that. For some reason which I do not understand — and which has not emerged from Deputy O'Dea's contribution — we are excluding the provision which should be included first, the product itself.

Mr. O'Dea

It is already covered under the 1980 legislation.

Mr. Taylor

I am talking about a case where a person is no longer amenable; if the person is amenable there is no problem, the matter is settled on a contract basis. Very frequently the person from whom one bought a defective product has gone out of business, does not have any money or is in liquidation. In those circumstances one must look elsewhere; if the product injured you or damaged other property you may recover but we are excluding the defective item. There is no logic in that. For some reason, we are taking it on ourselves to exclude the defective item, which makes no sense. Why exclude what should be the first item covered?

As far as hardship is concerned, at the end of the day maybe the producer was negligent but, regardless of whether he was, the fact remains that it was a defective product which he produced and sent out. Can anyone explain the logic in saying that if he makes a defective product which causes injury or damages other property he is liable but he is not liable for the defective product itself and does not have to replace it? Why should that limited category be excluded when in all common sense — never mind law — it should be the first item for which he is responsible. Let us not shed too many tears in relation to hardship because the producer manufactured and sent out a defective product.

Mr. Leyden

My Department have had extensive discussions with the EC Commission on the Bill. It regards the Bill as an admirable transposition of the Directive into Irish law because we have adhered, as closely as possible in most instances, to its wording.

Ireland is not purposely singling out or excluding damage to the defective product, the Directive precludes such a remedy. We cannot extend the legislation to incorporate what Deputy Taylor is seeking and this was pointed out by Deputy O'Dea. It is no great endorsement of the Bill to say that it has been in the pipeline for some time and that the Directive was debated over a long period in the EC.

Mr. McCartan

The Directive has been discussed for a long time but the Bill has not.

Mr. Leyden

The agreement and discussions took place when Deputy Taylor's Government were in power.

Mr. Hogan

The Minister can change it any time he likes.

Mr. Leyden

I am ensuring that the Directive, as drafted in the EC, will be brought into Irish law. The Bill contains the same wording as in the EC Directive and we cannot extend it. In fairness, Deputy Taylor made excellent points in relation to consumer requirements but we are covered in the Sale of Goods and Supply of Services Act, 1980, admirable legislation available to and used extensively by consumers in relation to defective products. I am not in a position to extend the terms of the Directive as agreed by the EC.

The Fine Gael-Labour Coalition of 1985 agreed to this Directive after intensive discussions and negotiations with the member states. My Department and I have responsibility to bring it into Irish law, it was brought before the House in 1989 but the general election intervened. I was very anxious to have this Bill completed before the summer recess of 1991 and I am under considerable pressure from the Commission to have it implemented without further delay. I am not prepared to accept an amendment because it would be going outside the terms of the Directive as agreed by the EC.

Mr. McCartan

I have no doubt that the Minister of State has had extensive discussions with the EC in regard to the Directive. However, I doubt that the discussions had much to do with the contents of the Bill. They were probably about what our Government were doing about the implementation of the Directive.

The intention of the Directive is to approximate the laws within the Community; it is not suggesting that there must be absolute uniformity between the laws in one state and another within the Community. The point has already been made that the Directive lays down the basic minimum which will be required of all member states to comply with this effort towards approximation. The Minister referred to 1985; in fact, the discussions began at EC level as far back as 1976 and have been ongoing since.

At EC level we have been discusssing introducing a consumers' charter of rights, and that is basically what this Directive is addressing. It is trying to ensure the best and fairest deal for the consumer recognising that you do not frighten out of the market the producer, manufacturer and distributor. They at least have the profit motive to keep them alive and the consumer has the pressure of necessity.

What we are trying to do is draw a good balance. Having adopted the concept of strict liability — it has been adopted universally throughout the EC — and having introduced it into our law in the area of consumer rights we should not be afraid of it. I welcome particularly the indication from Deputy O'Dea that he is at one with Deputy Taylor and myself as regards one of the defences, something we will talk about later. We have to look to the whole area of scientific research, the state of the art defence and the balance that has to be maintained. The important thing is not to stand back from this concept of strict liability. In general terms the insurance industry will have an input into this whole debate, in protecting the interests of the producer, the manufacturer and the distributor.

Deputy O'Dea talked about the hardship to the plaintiff. In this whole area I am thinking of the very small consumer who will save pennies and pounds or, what is usual, will go to a loan company or credit finance company to raise money to buy consumer items which are necessary for use in the home. Deputy Taylor used the instance of the motor car but in the context of this legislation I am thinking more of items such as washing machines, cookers and electrical appliances that are essential in the home. Invariably because of their poor incomes these people rely on the credit finance corporation. When the product breaks down because it is shoddy or defective and the unfortunate consumer living in the working class area brings it back to the shop, they find it has closed. The shop may have been open only for a short period of time and was operated by some cowboy who then moved out very quickly. There is no-one to whom the consumer has recourse at that stage.

The first thing that happens is the consumer receives a letter of reminder from the credit company telling him that the state of the equipment has nothing to do with them, that they have a separate contract. For the first time the unfortunate consumer realises that on the one hand he has a defective product which is worthless while on the other hand the credit finance company are demanding payment in full. What seemed to the consumer up to then to be one transaction turns out to be two, leaving them losing out on two levels.

Deputy Taylor's amendment would give the consumer at that stage a good and firm hand to pursue the distributor, manufacturer or producer. The consumer would be entitled to say: "I do not care whether you bought this product having tested the market fully or whether you claim you are negligent because it was a reputably produced item and your only act was to move it down the line". The consumer in those circumstances should be entitled to say that the issue of negligence does not arise. He should have rights under the Liability for Defective Products Bill which should state that the manufacturer or producer is strictly accountable and must ensure that the consumer is compensated. That is what we are trying to address in this legislation. The Minister is right in that the directive does not put the onus on him to allow for compensation for the defective product. Deputy Taylor has a much better case to make than the very neat and comfortable case made by the Minister of State. This is fundamental to the whole purpose of what we are trying to do in terms of providing a consumer charter, particularly for those who are less able to afford the items I mentioned. That is why I take up what Deputy O'Dea has said about the question of hardship. We might well be tilting the balance in favour of the consumer. I have no doubt that Deputy O'Dea hears about cases such as these in his constituency, and we should do something for these people in this legislation. While to us the hardship might not appear to be great, for the people affected it is great. The balance should be tipped very much in favour of the consumer.

On the technical side, the provisions of the 1980 Act applying to standards of merchantable quality have been mentioned. The legal right is there but it is based on negligence and fault, on whether, in litigation, you can point an accusing finger at the distributor, manufacturer or producer. Unfortunately in this jurisdiction there is no small claims court, no opportunity to pursue without too great a difficulty claims of this type at a reasonable cost to the consumer. It is to easy to say that the 1980 legislation applies, but all the pitfalls of fault, liability, negligence and so on have to be considered, and the onus of proving negligence rests on the shoulders of the consumer.

We should agree to Deputy Taylor's proposal. It would make our legislation better from the point of view of the consumer. I would ask the Minister to reflect on this matter again and not to simply say that this is what is in the directive and that is the end of it. In this legislation we are addressing the problems of the community. The directive is an effort towards approximation, not towards uniformity throughout the Community.

Mr. O'Dea

I will have no row with Deputy McCartan about the need for a small claims court, it is something I have been advocating within my party for quite some time, and I hope to see something of that nature in the not too distant future. On the question of hardship and tilting the balance in favour of the consumer, of course we want to tilt the balance in favour of the consumer and we are making a start in this Bill. I take the point made by Deputy McCartan about the people who endeavour to return defective goods to, to use his expression, cowboy operators only to find they have disappeared overnight. Of course I have dealt with such cases in my constituency, but they are a very small percentage of cases. I will not throw out figures of 1 or 2 per cent because I have more to do than add up the number of such cases and figure the percentage that has disappeared, but it is a tiny percentage.

On Deputy McCartan's point about the 1980 legislation, it is my impression — I could be wrong and if so I am open to correction — that you do not have to establish negligence to bring a claim under that legislation. Surely it provides a statutory right to proceed. We are talking about an action in contract, not in tort, and negligence has to do with tort. It has nothing to do with contract. My understanding is that under the 1980 Act you have to establish only that the product in question was not of merchantable quality or was fit for the purpose required. Negligence does not come into it at all.

Mr. Leyden

In response to the points made by Deputy McCartan, the draft Bill was discussed with the Commission in he first instance in May 1990, again in July and September 1990 and yet again during the first half of 1991. The Commission suggested certain changes, a number of which the Government accepted. A number of other issues raised by the Deputy in relation to consumer credit and cowboy operations are already or will be covered soon by other legislation. The point made by Deputy O'Dea, and indeed by Deputy McCartan in relation to a small claims court is being actively considered by my colleague, the Minister for Justice.

Deputy McCartan referred to the number of representations on consumer matters he gets at his advice clinics, but, strangely enough, I have not received a great number of representations on this issue. However, that does not mean that consumer problems do not exist, but that, perhaps, they are more common in urban areas. Nevertheless legislation is being introduced to ensure that consumers are protected, and it is vital that they are. I think the 1980 Act was very enlightened legislation, and it is still law.

In line with the views I expressed on Deputy Taylor's amendment it extends beyond the Directive and, unfortunately, I am not in a position to accept it.

Mr. Taylor

It goes a bit beyond the Directive.

Mr. Leyden

Even though Deputy Taylor has put forward a very well argued case for his amendment, this case was not argued by a previous Administration who agreed to the Directive and, of course, I have to comply with the agreements that were reached by the previous Government, that is, the concept of continuity of Government.

Mr. McCartan

That is a new concept.

Mr. Leyden

There is continuity because when a Government and their Minister at the time agree to a Directive, it is then obligatory on Government that follow to accept it. We cannot go back and renegotiate because there is a change of Government.

Mr. Hogan

The Government have been renegotiating for the past year and a half.

Mr. Leyden

That is the general procedure that is adopted. I have no fundamental difference with this Directive. I accept the decision made by the previous Government in this regard and it is vital that we introduce it into Irish law.

I am not accepting Deputy Taylor's amendment but I recommend that we should not divide on his amendment because we are implementing an EC Directive. We have not as much freedom to accept amendments in this case as we have when dealing with Irish legislation which does not have regard to a Directive from the EC Commission. That is why the first amendment tabled by Deputy Taylor was on far stronger grounds than his second amendment.

Question put: "That the words proposed to be deleted stand."

The Committee divided: Tá, 74; Níl, 61.

Tá

• Ahern, Bertie.
• Ahern, Dermot.
• Ahern, Michael.
• Aylward, Liam.
• Barrett, Michael.
• Brady, Gerard.
• Calleary, Seán.
• Clohessy, Peadar.
• Collins, Gerard.
• Connolly, Ger.
• Coughlan, Mary Theresa.
• Cowen, Brian.
• Cullimore, Séamus.
• Daly, Brendan.
• Davern, Noel.
• Dempsey, Noel.
• Dennehy, John.
• de Valera, Síle.
• Ellis, John.
• Fahey, Frank.
• Fahey, Jackie.
• Fitzgerald, Liam Joseph.
• Fitzpatrick, Dermot.
• Flood, Chris.
• Flynn, Pádraig.
• Gallagher, Pat the Cope.
• Geoghegan-Quinn, Máire.
• Harney, Mary.
• Haughey, Charles J.
• Hillery, Brian.
• Hilliard, Colm.
• Hyland, Liam.
• Jacob, Joe.
• Kelly, Laurence.
• Kenneally, Brendan.
• Kitt, Michael P.
• Kitt, Tom.
• Brady, Vincent.
• Brennan, Mattie.
• Brennan, Séamus.
• Briscoe, Ben.
• Browne, John (Wexford).
• Burke, Raphael P.
• Lawlor, Liam.
• Lenihan, Brian.
• Leonard, Jimmy.
• Leyden, Terry.
• Lyons, Denis.
• Martin, Micheál.
• McCreevy, Charlie.
• McDaid, Jim.
• McEllistrim, Tom.
• Molloy, Robert.
• Morley, P.J.
• Nolan, M.J.
• O'Connell, John.
• O'Dea, Willie.
• O'Donoghe, John.
• O'Hanlon, Rory.
• O'Keeffe, Ned.
• O'Leary, John.
• O'Malley, Desmond J.
• O'Toole, Martin Joe.
• Power, Seán.
• Quill, Máirín.
• Reynolds, Albert.
• Smith, Michael.
• Treacy, Noel.
• Tunney, Jim.
• Wallace, Dan.
• Wallace, Mary.
• Wilson, John P.
• Woods, Michael.
• Wyse, Pearse.

Níl

• Ahearn, Therese.
• Allen, Bernard.
• Barnes, Monica.
• Barrett, Seán.
• Barry, Peter.
• Bell, Michael.
• Boylan, Andrew.
• Bradford, Paul.
• Browne, John (Carlow-Kilkenny).
• Bruton, John.
• Byrne, Eric.
• Carey, Donal.
• Connaughton, Paul.
• Connor, John.
• Cosgrave, Michael Joe.
• Cotter, Bill.
• Currie, Austin.
• D'Arcy, Michael.
• Deenihan, Jimmy.
• Doyle, Joe.
• Dukes, Alan.
• Durkan, Bernard.
• Enright, Thomas W.
• Farrelly, John V.
• Fennell, Nuala.
• Ferris, Michael.
• Finucane, Michael.
• FitzGerald, Garret.
• Flaherty, Mary.
• Flanagan, Charles.
• Foxe, Tom.
• Gregory, Tony.
• Higgins, Jim.
• Higgins, Michael D.
• Hogan, Philip.
• Howlin, Brendan.
• Kavanagh, Liam.
• Kemmy, Jim.
• Kemmy, Enda.
• Lowry, Michael.
• McCartan, Pat.
• McCormack, Pádraic.
• McGahon, Brendan.
• Mac Giolla, Tomás.
• McGrath, Paul.
• Mitchell, Gay.
• Moynihan, Michael.
• Noonan, Michael.
• (Limerick East).
• O'Keeffe, Jim.
• O'Shea, Brian.
• O'Sullivan, Gerry.
• O'Sullivan, Toddy.
• Owen, Nora.
• Quinn, Ruairí.
• Reynolds, Gerry.
• Sheehan, Patrick J.
• Sherlock, Joe.
• Spring, Dick.
• Stagg, Emmet.
• Taylor, Mervyn.
• Taylor-Quinn, Madeleine.

Tellers: Tá, Deputies V. Brady and Clohessy; Níl, Deputies Howlin and Ferris.

Question declared carried.

Amendment declared lost.

Mr. Taylor

I move amendment No. 3:

In page 2, subsection (1), line 27, after "consumption" to insert "or for a business occupation or profession".

This amendment would extend somewhat the principle being established in this Bill, admittedly beyond the net, basic minimum requirements of the Directive, but let us be clear about one thing. There is nothing in our Constitution or in the law which says we may not provide that bit more for consumers than what we are obligated to provide under the Directive. I know that if we do the minimum required by the Directive we will satisfy the EC and the Commission that is all we are obligated to do so far as they are concerned — but if we do that it is quite open to the House, if the House is so minded, to do that, but to do that bit more as well.

One should introduce an element of logic into this overall position because we are introducing into our law an important, basic, new principle, which is a good one, that if one manufactures and puts into circulation a defective product, one carries the can for that; one is liable for that whether one is negligent or not or, more importantly, whether the injured party is in a position to prove that one was negligent, which is not necessarily the same thing. That important new principle is being established. Either it is a good principle or it is not. If it is a good principle it should be brought into force within the broad spectrum of human activity; we should not, in a niggardly fashion, be chipping away at it before we even introduce it. That is precisely what we are doing here in that we are saying a person should be liable only if the damage amounts to more than £350, if it is not the actual item itself; if it is mainly for private use. If it is a good principle we should do the big thing and bring it in properly and fully without limiting it. It would be as though, in the general law of negligence, one was to start limiting it and say: he is liable only if the item concerned is worth more than £350. In the law of negligence, would anybody dream of saying that if one is negligent and does something wrong one is liable only if one does more than £350 worth of damage or if the item was for private use? We would not dream of doing that.

The whole essence of legal principles is that they have broad application if the principle is right. Of course, if one does not accept the principle that there should be strict liability, all right. I am sure there is no way this Government would bring forward a measure providing anything on strict liability unless they were obligated to do so by the Commission. Nonetheless, in modern futuristic thinking, the principle is right, that when a person produces a defective item they are responsible for its consequences whether they were negligent or not.

When a defective product is produced and circulated and an injury or damage is caused, the injury or damage is done and one cannot get away from that fact. There is one issue only then to be determined, that is: who has to suffer for that? Is it the consumer who bought the article, who has the article, who received injury from it who must ultimately carry the can, or is it the producer who made and sent out this defective article? It has to be one or the other because the damage has been done.

The Bill sets up the principle that the person who produced the defective item is the person who is to be responsible. That would be fine were we not setting about hedging it with all these limitations and restrictions, which is precisely what we are doing. I concede that we are drawing a distinction in the Bill as the Directive allows. I know the Directive allows that but that does not mean to say that we cannot go beyond it, that it is confined to an item used by the injured person "primarily"— whatever that means — for his own private use or consumption.

What I am endeavouring to add by way of amendment is that, even if the item was used for a business, occupational or professional purpose, why exclude that? Why say that a person who produces a defective item which is used by a small businessman, who suffers as a result of that defective item, should be excluded from responsibility? We must always remember that it is a defective item about which we are talking. We are not talking about making anybody responsible for a good item because, running through the Bill, one essential provision is that we are talking about defective items.

Therefore, if a defective item is produced, manufactured and sent out and a small businessman uses it — it could be a tool, or anything else — and suffers, why should he be debarred from recovering damages for an injury he sustained or for damage to property that would be done by it? Why on earth should the person who produced that defective item escape simply because, at the other end, it happened to be used by a person running a small business? There are many items, possibly most, manufactured and produced whose producer does not know what will be their ultimate usage. They may be items capable of having a private and/or business use. The producer does not know what will be the ultimate use of, say, that particular machine, whether it will be used for a private or business purpose.

Are we then in a lottery position, that if the item turns out to be defective, if it happened to be used for private purposes when it blew, he is caught and, if it happened to be used by a small businessman, he escapes? Are we in the lottery business here? Is that what this is about? We must remember that it is purely a lottery consequence where the same item happened to go or was used. If a small businessman buys a piece of equipment and it blows on him because it is defective — always remember it is defective; it was manufactured in a defective manner and turned out to be a defective item — he is to be debarred, he could be ruined, he could be put out of business, it could destroy him, whereas if he bought the item for a private purpose he would have a perfectly good claim in exactly the same set of circumstances. Where is the sense or logic in that? It does not add up. There is no rhyme or reason to it; either the item is right or it is not.

We are introducing an important, good principle but, if we are to do it, let us do it properly. Let us be sensible about the matter. Do we say to manufacturers and producers that they had better take care and ensure that the items they are producing or manufacturing and sending out are not defective, that they are all right, but, nonetheless if the goods they send out are defective and, as a result, destroy somebody's business — to say nothing of injuring him or whatever — they have to carry the can. The mere accidental fact that it went to a person running a small business rather than, say, a person using it for leisure purposes is a relevant factor, in that he is caught in the one case and escapes in the other through that purely coincidental fact. It is the same product, yet a lottery position creeps in in that if a businessman were involved he would escape — unless negligence can be proved against him, and usually it cannot — whereas if a private person is involved, he has to pay up. There is no rhyme or reason to it.

Earlier in the same section — subsection (1) (b) (ii) — we are also opening up a can of worms by the use of the word "primarily"; "... was used by the injured person primarily for his own private use or consumption."

I do not know what that means but the matter of its interpretation could well go to the Supreme Court and we do not want that. At this early stage, in drawing up legislation, why do we not endeavour to be more precise about these things, try to foresee legal difficulties and legal arguments? One often wonders about the wide extent of litigation here. We are regarded as a litigious people. Part of the fault lies with the Legislature because we do not exercise sufficient care at the formative stage of legislation and often we leave things in too loose a format. One could foresee major court cases over the interpretation of the word "primarily". A person could use an article sometimes for business and sometimes for private purposes. It could be a car or any other equipment. We could have a battle royal in the High Court and the Supreme Court as to whether that was covered.

I do not see why the new principle being written into law by this Bill should be hedged around by confining it to private user consumption as opposed to business user consumption. There is no reason in principle why that should be so. This is a fair amendment. The Minister is not required by the Directive to accept it, but neither is it the position that if the House is minded to extend it in that way it could not do so. The EC Commission will be quite satisfied if we apply the principle to private use or consumption. If we go beyond that, it is a matter for this House to decide.

Mr. McCartan

I support this amendment. I am speaking in anticipation that the Minister will reply that he is following the Directive only. He is consistent at least in that. In regard to principles, there is a case for consistency to be argued. It seems ridiculous to suggest that a product which is capable of many uses by people in different circumstances should carry with it strict liability when it is used mainly for private consumption purposes. If used for other purposes it will not carry that liability. The terms private and public use also need to be further defined. Whatever the circumstances in which a product is used, the user is a consumer and we are endeavouring to protect consumers. The amendment proposed by Deputy Taylor should be accepted.

The Directive uses the phrase "mainly for his own private use or consumption". For some odd reason the word "mainly" has been replaced by the word "primarily" in the Bill. I will not engage in a major discussion on the difference between those terms but there certainly is a difference. "Primarily", as its Latin origin suggests, implies that it is used in the first instance. One might acquire something as a consumer in the first instance for business use but one might have a private use for it as well. The motor car is probably the best example. A person in the legal profession might buy a motor car for business use because he needs to get to the office or to court. Such use might consume only a small percentage of the day and the motor car might be used mainly for private purposes, although purchased primarily for business use. The Minister has access to legal minds and should consider that point before Report Stage. Whichever term is used will give rise to debate. There is a qualitative and substantive difference between them but my preference is for the word used in the Directive, "mainly". I was alerted to this by Deputy Taylor's amendment which forced me to look more closely at the text of the Bill and of the Directive.

I urge the Minister not to take a narrow, restrictive approach to this amendment. Our purpose is to introduce a comprehensive consumer code based on strict liability. We must recognise that whether one buys a product for private or public use one is still a consumer. Has the Minister been advised in discussions with various agencies here or in the Commission whether there is a clear definition of "private use" as opposed to "public use"? I am not sure that if one uses something for business it immediately becomes non-private. Perhaps the Minister would elaborate on the concept of private as opposed to public use in the context of this legislation. We still pursue a private existence when we are at work or business. Some form of definition of the term is necessary before I can be happy with the section as it stands.

Mr. O'Dea

I agree with much of what Deputy McCartan said in relation to the difference between "primarily" and "mainly". I did not follow the argument about something being bought primarily for use in business and then used for private purposes. The definition of "damage" relates to use. We should consider using the wording of the Directive. I prefer the expression "mainly" because I understand what is meant. I am not quite sure that I understand the reason for using an alternative word in the Bill. The intention is that the item would be used by the injured party mainly for his own use or consumption. Deputy Taylor's amendment seeks to extend that beyond the consumer into the business area.

Mr. Taylor

The businessman is also a consumer.

Mr. O'Dea

I take that point. Deputy Taylor intends to extend it to the consumer who buys something for business purposes or for use in a business. The whole tenor of the Directive is intended to extend strict liability to protect private consumers rather than people who are purchasing items for use in a business. I have no objection to that in principle. I will not fall out with the Minister if it is extended for business use. I do not know, and I do not want to know, who drafted the amendments on behalf of the Labour Party. Perhaps Deputy Taylor drafted them himself. In his subconscious mind Deputy Taylor must have seen the parliamentary draftman's point, that this was intended for protection of the private consumer. If the Deputy's amendment is accepted strict liability would then be extended to items of a type ordinarily intended for private use which were used by the injured party primarily or mainly for business use. All business use is not excluded. I am sure Deputy McCartan did not intend to imply that it was but that could be inferred from some of his earlier remarks.

A person who purchases an item which is of a type ordinarily intended for private use or consumption, if it is used by the injured party primarily for private use — that does not mean that in some instances he could not use it for non-private use — would have an action provided that the item was used primarily for private use. I would prefer to see the word "mainly" used there and that would extend the definition somewhat. However it would seem illogical that the producer of an item would be strictly liable if he were to sell an item which happened to be defective and that defective product caused damage to an item of property which was of a type ordinarily intended for private use when it was being put mainly to non-private use.

The whole tenure of the thing is to protect private consumers who buy these consumer items primarily for private consumption. As I have said, I will not fall out with the Minister if he wishes to extend the definition but it seems to be provided for by the word "primarily" being substituted for by the word "mainly". The definition would satisfy me as it would stand then.

Mr. Leyden

First I will deal strictly with the amendment put forward by Deputy Taylor. This subparagraph of section 1 (1) is taken verbatim from Article 9 of the Directive and is not subject to an interpretation which would allow its provisions to apply to property damage in the commercial sphere. Also, in the preamble to the Directive, at page 9, line 7, it specifically states that damage to property should be limited to goods for private use or consumption.

In regard to Deputy Taylor's point about litigation where it was generally felt that people were orientated towards litigation, I would respectfully suggest to him and indeed to his colleague Deputy McCartan that their own profession have recently, by advertisements, encouraged people to go on the basis of no foal, no fee and that would in some cases encourage unnecessary litigation.

Mr. Taylor

That is not new. It has been the position from time immemorial.

Mr. Leyden

Not to the extent that advertisements were appearing regularly in newspapers. That was not the case until recently.

Mr. Taylor

And whose fault is that, if not the Government's?

Mr. Leyden

I am just making the point that it encourages what I would call trivial litigation at times.

Mr. Taylor

Who, only your own Minister, encouraged the Law Society to allow advertising?

Acting Chairman (Mr. Wyse)

There will be no interruptions, please. If Deputies wish to come back in on the amendment they may do so but the Minister has a right to answer some of the queries without interruption.

Mr. Leyden

With respect to Deputy Taylor, it seems they have adopted it with great enthusiasm but I have certain reservations in that regard as have others.

Deputies McCartan and O'Dea have made their point about the wording very clearly. I am prepared to look at the question of substituting "mainly" as contained in the Directive for "primarily" as contained in the Bill and I am delighted that both Deputies have pointed this out. I will be having consultation with my Department before the Report Stage in that regard.

However, my own feeling would be that we should stick strictly to the Directive and I will be consistent in this regard because I have to bear in mind the intensive negotiations and discussions which take place at the EC. As recently as a week ago I was involved in discussions in the Department in relation to a new directive that will be coming forward in the consumer area and I appreciate how every word and section is argued very forcefully up to the level of the Council of Ministers so I would feel it only appropriate that I would adopt the proposal suggested by my colleagues, Deputies O'Dea and McCartan, and come back on Report Stage with my considered opinion. I feel at this stage that I am on very strong ground because what is being proposed is in the Directive and I am not enthusiastic about changing any word of that. I feel we should go strictly in accordance with the Directive.

In relation to the question of private and professional use I would make the point that a farmer might buy a tractor to use for farming purposes but if he uses it for transporting children to school, for instance, that would be private use. There is a clear line of demarcation and it is quite clear what is private use and what is professional use.

Mr. Taylor

If he was in the business of transporting children to school it might be different because that would be his business.

Mr. Leyden

I would regard that very much as domestic use and it may not be covered under the actual product. We could debate this at length but I am quite clear that it is appropriate to have the section as contained in the Directive and not to extend it as suggested by Deputy Taylor to include "or for a business occupation or profession". It certainly would change the philosophy behind the Directive. It is not even a question of my willingness to allow for this change. I would not be in a position to change that directive without going back to the EC Commission for further discussion and I am not prepared to do that because it would be extending the whole philosophy behind the Directive which is a limited, focused Directive.

Things have changed in the EC since 1985. This is 1991. From my experiences of a week ago, I know there is a new emphasis which I fully accept and we in Ireland are at the forefront of consumer legislation. There is far more emphasis now on consumer legislation, and rightly so.

Mr. McCartan

The Minister has raised a very important point. Under section 21 of the Directive there is a provision whereby every five years the Commission would present a report and there are other provisions within the Directive for reviews under Article 18 every five years. The provision is that the Council shall examine and if needs be revise the provisions. Could the Minister, before we resume on this debate at 4 o'clock, advise us or perhaps circulate Deputies Taylor, Hogan, O'Dea and myself with some information as to whether such reviews have taken place, whether reports have been prepared and what they say? The Minister is correct in saying that there have been developments in the EC in terms of this Directive as to how certain of its provisions have been implemented, derogated from or otherwise. The House should be advised as to whether there have been changes recommended by reviews to the Commission in the operation of the Directive.

Mr. Leyden

I will respond very quickly. Only three countries complied with the deadline set by the EC and other countries, like ourselves, are implementing or bringing forward the legislation. At this stage, therefore, it would be far too early to have reports back on the implementation of the Directive. We would have to ensure that all the countries would have the legislation brought into national law before there could be a report back to the EC on how the Act is being implemented. Without getting bogged down in that sort of detail at this stage it is vital to bring the Directive into Irish legislation before we, like other countries, can see what reviews would be necessary in this regard.

Progress reported, Committee to sit again.

Sitting suspended at 1.30 p.m. and resumed at 2.30 p.m.