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Joint Committee on the Secondary Legislation of the European Communities debate -
Wednesday, 23 Mar 1977

Product Liability.

The nub of this draft Directive is to create a new liability for manufacturers. In non-legalistic terms, the position up to now is that anybody who wishes to claim against the manufacturer of goods has to prove that the manufacturer was negligent. The trend nowadays is in the opposite direction. Under the proposed Directive it will be mandatory on the manufacturer of defective goods to pay compensation unless he can prove to the satisfaction of everybody concerned that the product was in good shape when it left him. If the draft Directive is adopted it will bring about that very considerable change, and the consumer will have this additional protection. The consumer's position will be strengthened very considerably.

This would have very considerable and far-reaching effects on our general economic situation. Irish manufacturers, in general, are very worried about the implications for them. It is very much a matter of law reform and what is proposed would represent in our circumstances a very considerable reform of the law. We believe that the proper course of action is to ask the new Law Reform Commission to report on this. In fact the Law Reform Commission have been asked to advise on the legal aspect of the proposal. When we get from the Law Reform Commission a full exposition of the legal issues involved we will then be able to come to a much better, much wiser and more informed, decision. We are proposing that no decision should be taken on this proposal until such time as the Law Reform Commission have reported on it. Is that all right?

Yes, indeed. I wish to add however, that the problem for the Irish producer is the difficulty of getting insurance and the additional cost, in terms of insurance, of covering the very wide extension of liability which could arise. This would impinge, I think, both on the contractual liability as well as on the liability of negligence.

There have been a number of other similar situations such as workmen's compensation, where negligence did not have to be proved, but in those cases the benefits were very limited. This is different to the extent that the limit to the damages is going to be very high.

It is such a far-reaching proposal that the report of the Law Reform Commission is vital before we come to a decision on it.

Sections 1 to 5 inclusive, agreed to.
Draft Report agreed to.
Ordered: To report accordingly.
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