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Dáil Éireann díospóireacht -
Wednesday, 30 Oct 1991

Vol. 411 No. 7

Liability for Defective Products Bill, 1991: Report and Final Stages.

I move amendment No. 1:

In page 2, to delete line 20, and substitute the following:

"(a) damage caused by death or by personal injuries, or".

I am disappointed that I do not see an amendment in the name of the Minister on this matter because the Minister of State, Deputy Leyden, who took the Bill on Committee Stage, indicated that he would look favourably on this amendment. In a nutshell, the position is that the Minister in putting forward the Bill has altered the wording of the Directive which has come from the EC and has altered it seriously adversely against the interests of consumers. Under the terms of the Directive, consumers were supposed to be able to get compensation arising from personal injuries or from death caused by a defective product. For that reason I just cannot understand, and cannot imagine, why the Minister and the Government have altered the wording of the Directive. They have altered it to the extent that rights given in the Directive are taken from the consumer by reason of the altered wording in the Bill. That is totally inexplicable and unacceptable.

Article 9 of the Directive gives a definition of the word "damage". The first thing I might say is that I do not think any definition of the word "damage" was necessary in the Bill because the word "damage" is a well established notion in the laws of this country; judges have interpreted it down the years. It is already very well defined in judicial decision. Any judge of any court will know immediately what may be the extent of damage an injured person can claim. But if it is decided that it is necessary to include a definition of the word "damage", I just do not understand why the definition given in the Directive is not used because the definition given in Article 9 reads:

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

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

But the definition of "damage" in the definitions section of the Bill says:

"damage" means—

(a) death or personal injury, or—

It excludes damage caused by personal injury. What is the difference between the two is the question which may be posed. Very substantial differences could arise. For example, if a person was injured by a defective product, was out of work for, say, six months or a year as a result of that injury, quite clearly — under the terms of the Directive — that person should be compensated and be entitled to be compensated for the loss of their earnings because that would be damage caused by personal injury. If one looks at the wording of the Directive clearly that would be included in that it says "damage" means damage caused by death or by personal injuries. Just to take one category, loss of earnings is something the Directive envisages an injured person would be entitled to; that could be a very substantial amount of money for a person who received a serious injury. But the definition inserted in the Bill restricts that completely and confines damage either to death or personal injury, that is to say, there the person would be compensated for the actual injury but not for its consequences, not for loss of earnings and not for consequential losses or damages.

There have been many instances in this House of legislation having been introduced following on EC Directives. When we in the House have endeavoured to secure improvements on that position, or even slight alterations thereto, the one identical response always forthcoming from the Government side, from the Minister concerned, from whatever Department may be involved is; that is the wording of the Directive; much as I would love to change it we are bound by the wording of the Directive; we must follow the wording of the Directive; that is the way it comes from the bosses of Brussels; we cannot change it, not to the right, not to the left. Yet here we find a blatant, obvious classic example where, on a matter of importance so far as consumers are concerned, the wording of the Directive has been altered.

If it were merely a matter of academic interest one might say all right, it is just a matter of verbiage, it is of no practical consequence, but that does not apply here. Here it is a very different matter. Here it is a very real difference. People will suffer and consumers lose as a result of this cutback on the rights the Directive intends to give consumers. There was no explanation of this forthcoming on the last occasion we discussed this matter. Indeed, I cannot see how there can be any explanation. Consumers are entitled to have the wording of the Directive followed; they are entitled to the rights conferred on them in the Directive.

What is the point in giving this "out" on such an important matter to producers, for the most part large manufacturers, most of them not even operating within the country at all? Why is the Minister extending himself to give unnecessary, uncalled-for protection to producers and manufacturers as against the interests of consumers? Is the Minister anti-consumer? One must pose that question. Why has the Minister gone out of his way to take the very unusual step of varying the wording of a directive that could mean substantial losses to consumers when the only benefit that will accrue therefrom will be to the benefit of producers and manufacturers?

One would not approve of it but could understand it if the taxpayers' position was involved, if it were something the taxpayer could not afford, would not be able to bear or whatever. One would not sympathise with that position but one could understand it. The only parties that will gain from this very strange variation in the wording of the directive are the large producers and manufacturers. One must ask why. I do not understand it for the life of me because I contend that consumers' interests should be paramount. The EC went to great lengths to provide the very limited protections given under the provisions of this Bill, and they are limited, as became all too apparent as we discussed this matter on Committee Stage, but even those limited provisions are being further cut by the Minister's alteration in the wording of the Directive.

It cannot be accepted and the House should not accept it.

In the course of the Committee Stage debate the Minister for Trade and Marketing, Deputy Leyden, promised Deputy Taylor he would give further consideration to this amendment and return to it on Report Stage.

Having consulted with the office of the Attorney General on the matter we have established that, although the wording of Article 9 (a) of the Directive, at first sight, seems to be an attractive reason for accepting this amendment, it is the result to be achieved under Article 9, rather than its exact drafting, which is mandatory on the State. The correct way to translate Article 9 (a) into domestic Irish law is by means of the definition of "damage" in section 1 (1) of the Bill. This accords with the approach in the definition of "damage" in section 21 of the Civil Liability Act, 1961 which is the principal statute governing civil liability in this country, and reads as follows:

"damage" includes loss of property, loss of life and personal injury.

Taken in conjunction with section 2 (1) of the Bill which provides that—

The producer shall be liable in damages in tort for damage caused wholly or partly by a defect in his product.

that is sufficient to make applicable the domestic Irish rules concerning the assessment of damages, including pain and suffering, consequential loss, etc., subject only to the limits expressly imposed by the Directive which are reproduced in the Bill. In fact, the definition of "damage" in the Bill would have this meaning even if section 2 (1) were not there, or were drafted differently. At all events, section 2 (1) explicitly meets the point raised by Deputy Taylor in proposing his amendment.

For the same reasons it is unnecessary to reproduce in the Bill the last sentence of Article 9 of the Directive. Indeed, it would be positively undesirable to do so as the effect would be to emphasise one domestic Irish rule concerning the assessment and scope of damages to the exclusion of others which would be equally applicable, subject only to the limitations imposed by the Directive, thereby running the risk of causing confusion and uncertainty where none should exist.

I hope that neither Deputy Taylor nor I will take the absolute position that because something is in the directive I must adhere 100 per cent to it or to the counter proposition he is putting forward. We have a Directive which has to fit into a European convention and into an Irish situation. We are meeting the Deputy's considerations and the fears being expressed are therefore groundless.

The Deputy is under a slight misapprehension. There is no question of adversely affecting the consumer. The whole desire in this Bill is to enhance consumer protection. We are trying to devise the best possible legislation and we are prepared to listen to solid views and put them in place to improve legislation if we can. When the protective clauses in this Bill are combined with existing legislation, the position of the consumer is undoubtedly enhanced. By no stretch of the imagination could there be an adverse effect on the consumer's position.

I welcome the Minister of State to the debate. I supported this amendment on Committee Stage and I continue my support on Report Stage. Having regard to what the Minister of State has said in talking down the amendment, I must make some comment on the absence of the Minister of State, Deputy Leyden. The amendment was specifically withdrawn by Deputy Taylor on the undertaking by Deputy Leyden to consult with the Attorney General and to look at the matter afresh. I appreciate that this has been done, but with the change of Minister for the debate we are being asked to abandon entirely the position taken by Government in promoting this Bill on Committee Stage. That position was repeated again and again by the Minister of State, Deputy Leyden, and it prompted me to withdraw a later amendment because there was agreement in the House that we would pursue the wording of the Directive and that alone. The Minister of State indicated that his preference was as far as possible to uphold and transfer the wording of the Directive into the Bill. I withdrew amendment No. 6 on Committee Stage on that understanding. It related to fisheries and the Minister was firm in his view.

I have tabled amendment No. 3 today and while it might seem at first glance to be pedantic, it argues that the word "mainly" should be deleted and the word "primarily" inserted. I will clarify my position when we reach that amendment, but it is based on the way the Directive is worded. The Committee Stage debate last week progressed on lines promoted by the Government but now the Minister of State seeks to abandon that line of approach and asks us to look not at the wording but at the objective of the article. I do not necessarily disagree but I am somewhat confused. Has another man been put in to bat because there is a different line of thinking in the Attorney General's Office?

I am disappointed that the Minister who took the Bill on Second Stage and Committee Stage is not here for Report Stage. This is no reflection on the Minister who is here. Two weeks ago at the Whips meeting we were advised that there was an urgency about this legislation, that the Committee Stage would be taken last Wednesday and the Report Stage today. Deputy Leyden was consulted as late as last Thursday about Report Stage today. There would not have been any difficulty in deferring Report Stage to another day to enable the same Minister to be here for all three Stages. When the Government order business they should seek continuity not just in thought and argument but in terms of the personnel available. I understand that things can happen at the eleventh hour which can make this difficult but it is a little annoying that having adopted certain positions in a good debate only a week ago we are being asked by different personnel to abandon those positions and go a different way.

My argument in favour of this amendment is that we should stick with the Directive because that is the better approach. If there is no doubt in the mind of the Government as to the construction of the legislation as it stands and if what Deputy Taylor is proposing does not advance the matter, why not err on the side of adopting what is in the Directive? It will not take away from the legislation and it will satisfy an opponent. I have no doubt that Deputy Taylor will be able to express better than I some of the doubts and reservations. Litigation is the art of making argument and there is no doubt that legal energies will be consumed following the passage of this legislation by people trying to draw inference and importance from the fact that there is a different definition of "damage" in the Bill from that contained in the Directive and in 1961 Act. Would it not have been better to achieve consistency between the Bill and the Directive and then argue that this is complementary to the 1961 Act? Deputy Taylor's proposal is eminently sensible and I am confused by the Government's point of view, despite the fact that it has been so ably put by the Minister of State, Deputy Smith.

I would remind my colleagues that on Report Stage second contributions are not permitted, except by the mover of an amendment.

I seek your advice on whether it is possible for me to refer to a matter which was brought to my attention during the weekend. In view of the fact that we are discussing a Bill which deals with liability for defective products——

We dealt with the Taoiseach earlier on in that regard, a defective product.

A constituent of mine bought a defective and dangerous baby's pram. This model is imported into Ireland by a company in Cork. The Director of Consumer Affairs and Fair Trade in an article in the Evening Herald of 12 July last referred to this defective product. It appears we have no legislation which can prevent this importer from importing this product. I understand that there is legislation in England governing such matters. Would it be possible for me to raise this issue before this debate concludes this evening?

Acting Chairman

It might be possible for you to raise it later, but I do not see what relevance it has to this amendment.

It may not be relevant to this amendment but it is relevant to the Bill and to this debate. I want to know if it would be possible for me to raise this issue during the course of this debate.

Acting Chairman

I will endeavour to get that information for the Deputy.

I support what my colleagues have said on the need to analyse the section to which this amendment refers. This issue was well analysed and discussed on Committee Stage by the Minister of State, Deputy Leyden, who indicated he wanted the wording in the legislation to be as close as possible to the wording of the Directive. I respectfully suggest to the Minister of State, Deputy Smith, that he has not given one iota of new information on this subject to the House today and has not put forward any good reason he cannot accept the wording proposed in the amendment.

The reason I support the wording proposed by Deputy Taylor in his amendment is that the need for consistency between the legislation of member states will become more obvious after the completion of the Single Market. If the wording of this legislation is not consistent with the wording in the Directive put forward by the European Commission I can see considerable difficulties arising in the future in the interpretation of the word "damage".

The Minister has not explained why we should change the wording in the Directive to meet the Irish situation. Our legislation on civil liability goes back to 1961. The wording in that legislation and the wording proposed by the Minister in this legislation are somewhat in conflict——

The Minister has yet to convince me of that. By accepting the wording proposed by Deputy Taylor in his amendment we would be safeguarding in a more pronounced way Irish consumers who wished to take a case under this Bill for damages arising from a defective product imported from another member state. I am well aware that consumers have tremendous difficulties in gaining access to their rights in other jurisdictions in relation to such matters as taxation and insurance purely because of the different interpretations of tax law and insurance law in other jurisdictions. We are trying to harmonise the laws in these areas under EC Directives before 1992. Now that we have an opportunity of complying with what other member states, with the exception of Luxembourg, have already agreed to, why can we not adopt wording which is as close as possible to the wording in the Directive so that there will be no prospect of inconsistency in subsequent decisions which might be made in this jurisdiction or any other jurisdiction?

I wish I could accept the Minister's assurance that the objective of the Directive is being met in the wording of the Bill. If I could in all sincerity and honesty accept that that has been done I would have no hesitation in withdrawing the amendment. However, I am afraid that that is simply not the position. I would ask the Members of the House and the Minister to look closely at this amendment.

The Minister referred to section 2 (1), a very good provision and if that was all there was in the section it would be all right. If section 2 (1) stood alone it would be 100 per cent satisfactory in my book and I would be very happy with it. Section 2 (1) states that: "The producer shall be liable in damages in tort for damage caused wholly or partly by a defect in his product". That wording is perfect but the trouble is that the Minister has not left the section at that. The crucial word is "damage", which does not have the normal meaning in law of the word "damage", because the Minister has chosen to interpret this word in section 1. He has chosen not to give it its normal meaning but rather to give it a special meaning, a restricted meaning. He has gone out of his way unnecessarily to do that.

One does not read section 2 (1) on its own because when one comes to the key word "damage" one has to ask what damage is for the purposes of the Bill and the Minister has gone out of his way to define the word "damage". He has given it a restricted definition which is at variance with the wording in the Directive. It will be no good for lawyers, if they have time to absent themselves from all the inquiries and court cases which are going on at present, to go into a court and start talking about what may be the objective of the Directive. The court will only be concerned about the wording of the Bill and will look at it closely.

I have no hesitation in saying that if I was a lawyer acting on behalf of a producer or manufacturer and some hapless plaintiff who had bought a seriously dangerous and defective product which had caused them a major injury, put them out of work for a year and caused all manner of consequential losses, come in to see me seeking damages for all of those things, I would say to a court — I think I would have a fair good chance of success —"this plaintiff is claiming damage and the damage he is entitled to is laid down in the Liability for Defective Products Act and it is limited". The court will only be able to allow him for damage which is referred to in the Bill and only two categories are permitted. The first category is death or personal injury — if he breaks his leg he can get damage of, say, a few thousand pounds for pain and suffering — and the second category is damage to an item of property other than the defective product. I will refer to that when we are dealing with my next amendment. Those are the only categories of "damage" that the person will be entitled to claim. The normal use of the word "damage" is taken away from him.

If the Minister had put in the Bill that the definition of the word "damage" would be the same as in the Civil Liability Act that would have been acceptable. If the Minister had left it without restricting the definition of the word "damage" to what is contained in section 2 (1) that, too, would have been acceptable but he has put in the restricted definition. Any court must say that this is a special new remedy in respect of damages and the Bill defines the categories. One can claim for a broken leg and for damage to other property. Loss of earnings is a consequential matter. Loss of use of a destroyed article is a consequential matter and loss of the article is specifically excluded. One can claim only for those two categories. Why should that be so when the Directive does not intend that to be and when it defies all logic and commonsense? Why should the consumer have those basic innate rights of compensation taken away from him in respect of a defective product? If he is out of work for six months why should he not be entitled to compensation? The matter seems clear; it seems to be an unanswerable argument in a court.

Let us go further and say it is arguable. When we are at the stage of forming legislation why should we pass legislation that falls into the category of being arguable? Surely, this is the place to put it beyond yea or nay. We should avoid the necessity of argument, such as those referred to by Deputy McCartan, of going to the High Court on cases stated or to the Supreme Court and so on. Why is it that so many cases end up in the Supreme Court earning enormous sums of money for lawyers and so on? Perhaps it is because we do not apply enough care in this House at the formative stage, perhaps it is because Ministers and Governments are not sufficiently responsive, sympathetic and understanding to non-political points made at the formative stage to try to avoid these things, take the matter out of the realm of argument and put it beyond yea or nay by a simple clarification of words. That is all I ask. It is not a matter of political contention unless one takes a consumer's point into account. The point I am making is pro-consumer, it is to clarify the intent of the directive. I hope the Minister will accept the amendment.

Acting Chairman

Does Deputy Taylor wish to press his amendment?

Yes, it is important.

Question put: "That the words proposed to be deleted stand."
The Dáil divided: Tá, 76; Níl, 65.

  • Ahern, Bertie.
  • Ahern, Dermot.
  • Ahern, Michael.
  • Andrews, David.
  • Aylward, Liam.
  • Barrett, Michael.
  • Brady, Gerard.
  • Brady, Vincent.
  • Brennan, Mattie.
  • Brennan, Séamus.
  • Briscoe, Ben.
  • Browne, John (Wexford).
  • Burke, Raphael P.
  • Calleary, Seán.
  • Callely, Ivor.
  • Connolly, Ger.
  • Coughlan, Mary Theresa.
  • Cowen, Brian.
  • Cullimore, Séamus.
  • Daly, Brendan.
  • Davern, Noel.
  • Dempsey, Noel.
  • Lenihan, Brian.
  • Leonard, Jimmy.
  • Lyons, Denis.
  • Martin, Micheál.
  • McCreevy, Charlie.
  • McDaid, Jim.
  • McEllistrim, Tom.
  • Molloy, Robert.
  • Morley, P. J.
  • Nolan, M. J.
  • Noonan, Michael J. (Limerick West).
  • O'Connell, John.
  • O'Dea, Willie.
  • O'Donoghue, John.
  • O'Hanlon, Rory.
  • 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.
  • Hillery, Brian.
  • Hilliard, Colm.
  • Hyland, Liam.
  • Jacob, Joe.
  • Kelly, Laurence.
  • Kenneally, Brendan.
  • Kirk, Séamus.
  • Kitt, Michael P.
  • Kitt, Tom.
  • Lawlor, Liam.
  • O'Keffe, Ned.
  • O'Kennedy, Michael.
  • O'Leary, John.
  • O'Malley, Desmond J.
  • O'Rourke, Mary.
  • O'Toole, Martin Joe.
  • Power, Seán.
  • Quill, Máirín.
  • Reynolds, Albert.
  • Roche, Dick.
  • Smith, Michael.
  • Treacy, Noel.
  • Wallace, Dan.
  • Wallace, Mary.
  • Walsh, Joe.
  • Woods, Michael.
  • Wyse, Pearse.

Níl

  • Ahearn, Therese.
  • Allen, Bernard.
  • Barrett, Seán.
  • Barry, Peter.
  • Belton, Louis J.
  • Boylan, Andrew.
  • Browne, John (Carlow-Kilkenny).
  • Bruton, Richard.
  • Byrne, Eric.
  • Carey, Donal.
  • Connor, John.
  • Cosgrave, Michael Joe.
  • Cotter, Bill.
  • Creed, Michael.
  • Crowley, Frank.
  • D'Arcy, Michael.
  • Deasy, Austin.
  • Deenihan, Jimmy.
  • De Rossa, Proinsias.
  • Doyle, Joe.
  • Dukes, Alan.
  • Durkan, Bernard.
  • Enright, Thomas W.
  • Farrelly, John V.
  • Fennell, Nuala.
  • Ferris, Michael.
  • Flaherty, Mary.
  • Flanagan, Charles.
  • Foxe, Tom.
  • Gilmore, Eamon.
  • Higgins, Jim.
  • Hogan, Philip.
  • Howlin, Brendan.
  • Kenny, Enda.
  • Lowry, Michael.
  • McCartan, Pat.
  • McCormack, Pádraic.
  • McGahon, Brendan.
  • McGinley, Dinny.
  • Mac Giolla, Tomás.
  • McGrath, Paul.
  • Mitchell, Gay.
  • Moynihan, Michael.
  • Nealon, Ted.
  • Noonan, Michael. (Limerick East).
  • O'Brien, Fergus.
  • O'Keeffe, Jim.
  • O'Shea, Brian.
  • O'Sullivan, Gerry.
  • O'Sullivan, Toddy.
  • Owen, Nora.
  • Pattison, Séamus.
  • Quinn, Ruairí.
  • Rabbitte, Pat.
  • Reynolds, Gerry.
  • Ryan, Seán.
  • Shatter, Alan.
  • Sheehan, Patrick J.
  • Sherlock, Joe.
  • Spring, Dick.
  • Stagg, Emmet.
  • Taylor, Mervyn.
  • Taylor-Quinn, Madeleine.
  • Timmins, Godfrey.
  • Yates, Ivan.
Tellers: Tá, Deputies V. Brady and Wyse; Níl, Deputies Howlin and Ferris.
Question declared carried.
Amendment declared lost.
Amendment No. 2 not moved.

I move amendment No. 3:

In page 2, line 26, to delete "primarily" and substitute "mainly".

I suggest this amendment for two reasons, first because the wording I am proposing is the wording in the Directive. I was prompted by what I believed at the time to be a totally solid commitment on the part of the Minister of State in Government to the notion that the wording of the Directive should be followed. Second, I believe there is a substantive difference between something that is primarily used and something that is mainly used for a particular purpose. What we are attempting to address is the definition of damage in the Bill referring to the proviso of that definition: "Provided that the item of property is (i) of a type ordinarily intended for private use or consumption, and (ii) was used by the injured person primarily for his own private use or consumption."

The Directive, in fact, says that the item was used by the injured person "mainly" for his own private use or consumption. I believe there is a substantive difference between those two words in terms of defining what item would or would not be covered by the Directive and for that reason I believe that we should follow the wording of the Directive. This is a simple proposition of substituting one word for the other. I hope I am not too presumptuous in hoping that this amendment is acceptable to the Government.

I really do not like to see Deputy McCartan down on his knees pleading with me like that, but I went to the trouble of looking up the dictionary for those words. In one "primarily" is "highest in rank, of importance". In the same dictionary "mainly" is "first in importance or extent". Basically there are no real grounds for accepting the amendment, but in case there is a shred of doubt about my commitment to be cooperative and gracious, I am quite happy to agree to a word which means the same as that already there.

And there is no one here to witness it.

Amendment agreed to.
Amendment No. 4 not moved.

I move amendment No. 5:

In page 2, between lines 27 and 28, to insert the following:

"(c) consequential loss or damage sustained by the injured person or such loss to be assessed in like manner as losses are calculated by law in cases of tort;".

I should mention that there is a misprint there. The word "or" should not appear at the beginning of the second line. between the words "person" and "such".

Is the House agreed that the word "or" in the second line of Deputy Taylor's amendment be deleted? Agreed.

This is intended to make quite clear that consequential losses or damage sustained by an injured party are within the ambit of this Bill. I think the Minister, in his remarks to my amendment No. 1, conceded that in his view they were. I am not sure about that but I think he said that. I would like to know if it is intended that consequential losses will be included and recoverable. If so, why not agree to the amendment and thereby put the matter beyond yea or nay?

The remarks I made on amendment No. 1 would apply again here. The definition of damage that is given in the Bill in section 1 is very specific and very restrictive. It makes no reference to the definition of damage as in the Civil Liability Act. It means that a court may not use the well defined meaning of the word "damage" or "damages" that has evolved over many years in law. All I am saying in the amendment is that consequential losses and damages are to be included within the ambit of the Bill and that such losses are to be calculated in the same way as damages in tort cases are calculated in law much the same as is stated in section 2 (1) of the Bill. It would tie in with that very well and make it clear that consequential losses, such as loss of earnings, loss of use of articles and so on, would be included. That category of damage is always provided for in law when a tort is committed upon a person. To deny that category in a claim arising under this Bill would put claims under the Bill in a completely separate category to those applicable to any other category in tort. I do not think that is something we would wish to happen. Consequently I hope the Minister can accept the amendment.

Perhaps Deputy Taylor will accept that the substance of this amendment has been provided for by the Attorney General's views regarding consequential damage as expressed in connection with amendment No. 1. I would reiterate what I said in relation to that — that consequential damage is covered and included as a legitimate claim within the context of the provisions of this Bill.

I would like to take the opportunity to welcome the recent appointment of Mr. Whelehan to the Office of Attorney General. I have not had the opportunity to do so in the House before. I noticed him in the House earlier in the afternoon and while I have wished him well privately I think I should publicly do so here.

I am concerned about the advice emanating from his office in this regard. The efforts being made by the amendment to address a certain amount of confusion that has now arisen — given that we have certainly two definite sources for the definition of damages in civil law, that contained in the Bill in the context of strict liability and that contained in the Civil Liability Act, 1961 — is a source of major worry. Deputy Taylor made the point earlier on this matter — that it would have been preferable if the Bill did not carry any definition whatever of damage and merely left it to the established constructed law based upon the 1961 provision and the judicial interpretation built upon that.

However, the Bill has sought to give a particular definition, and it is a definition which in its construction does not include the concept of consequential loss. Therefore, loss that would arise as a consequence of damage occurring does not appear to be contemplated by the way in which the Bill is drafted. As has been pointed out, that does not appear to be the intention of the Directive. The Directive is drafted differently and it is drafted differently specifically so that it does allow for a measure of consequential loss to be included.

The Minister has told us that the Office of the Attorney General has constructed a view based upon a combination of the definition of damage in section 1 together with the references to damage in section 2 (1) as giving a cumulative equivalent to the already existing definitions at law based on judicial construction of the 1961 provision. All that is terribly uncertain in my mind. It is very confusing. Therefore while the preference would have been not to have any definition of damage whatever in the Bill, given that it is there, given that the Government have not accepted amendment No. 1 on Report Stage, what this amendment specifically proposes is a very important addition to clarification of what is intended by all and sundry. The Government, the Attorney General I have no doubt, Deputy Taylor, Deputy Hogan and I want to ensure that people who have a remedy under the provisions of this legislation have a remedy to the same extent as they would have in general tortious law elsewhere, namely, for general damages, damages entailing suffering and for consequential loss.

That unanimity being so, this amendment in no way takes from the view adopted by the Government and Opposition parties alike. It gives an articulate representation and manifestation to what we all want which is to ensure that those who sue to achieve a remedy under this Bill will have a right, without ambiguity or doubt, to consequential loss. That is what the amendment addresses. It would inject certainty into the realm and reflects the universal view of the House. The Minister should accept the amendment on the basis that we are doing good work on behalf of those who will ultimately benefit from the provisions of the Bill.

I know I am not permitted to speak a second time but on a point of clarification I wish to point out that the definition of "damage" contained in the Civil Liability Act, 1961 includes loss of property, loss of life and personal injury. I have emphasised that on a number of occasions.

May I clarify a point? The worry is to what extent, when one comes to deal with the remedy under the Bill, one will have to accept the definition specific to it and not the one contained in the 1961 Act.

The Civil Liability Act states that the definition of "damage" includes those things but the Bill does not, rather it states something very different. It states that the definition of damage "means" these things. That is a different matter and it produces a different consequence. When the Civil Liability Act states that those items are included it does not exclude other items. When one states however, that the word "damage" means these things one is confining it very strictly to what one has specified. If one only specifies (a) and (b) then a person who brings a claim under this Bill will be confined strictly to those. I do not believe that is what is intended by the Directive; I am quite certain of that. I also believe, in fairness, that it is not what the Minister intends either but it seems that is what it is stating. Very often things are not intended. If the definition of "damage" means only the two items stated at (a) and (b) that is all that will be recoverable. That point will be argued. Perhaps the matter will go to the Supreme Court but I do not think such course of action is warranted. If I was to give advice on it it would be to look at the definition of "damage" which means death or personal injury or damage to property other than the defective product itself. If a person is to recover he will have to come within the ambit of those two categories. If that is not what the Bill and the intepretation section mean I do not know what they mean.

I can tell the Minister from personal experience that these matters are interpreted strictly by the courts; there is no broad sweep of the hands or statements such as "on logic, it should include this, that or the other". The courts do not work that way. They look at the wording very carefully and say it is their job to give out money in damages strictly in accordance with the law which is laid out here —"damage" means personal injury, not the consequences of it or consequential losses. A person will receive damages in respect of pain and suffering from a broken leg and that is it. If property, other than the item itself, is damaged a person will also receive damages and that is it unless this amendment is agreed to. I doubt if that is what the Minister intends. I hope not but that is what it states. Why leave the issue in doubt?

Deputy Taylor is an eminent lawyer and I am not but I am prepared to tell him that I will take him on in court and beat him on this one.

Amendment put and declared lost.

I move amendment No. 6:

In page 3, lines 17 and 18, to delete "where damage is caused as a result of a failure in the process of generation of electricity".

This is another example of an important variation the Minister has made to the wording of the Directive. We are dealing with the definition of the word "electricity". The Minister has provided in the Bill that the definition of "product" includes electricity but only where damage is caused as a result of a failure in the process of generation of electricity. The Directive has its own definition of the word "product" which is a simple one. It simply states "product" includes electricity in all its forms and facets so far as the generation and supply or any other facet or aspect are concerned, but the Minister has changed that. He has not done what he was told to do in the Directive. A Directive is something which directs him to do something and the Minister should do what he is told in these matters by the Directive.

Do not go down that road, it is a cul-de-sac.

That is the regrettable situation in which we find ourselves resulting from our membership of the European Community.

There is a cliff ahead.

I campaigned against that when I argued that orders would be sent to us from Brussels. Having accepted that position the Minister should do what he has been told to do. He has been told what the definition is but he has not accepted that and has cut it back, varied and altered it. Unfortunately, it is not a matter of academic interest either. It could well be of serious importance and could lead to a very serious loss for those who are adversely affected by it.

There is more to electricity than just the process of generation. For example, there is the question of supply. After it leaves the generating station it runs down the lines. Quite clearly, a defect in the supply of electricity down the line would come within the ambit of the Directive because it states the definition of "product" includes electricity. However, the Minister states that "product" includes electricity but only where the damage is caused as a result of a failure in the process of generation. That is not good enough. Why should the Directive be cut back?

If there is a defect in the supply of electricity, not in the process of generation, for example a change in voltage as a result of something going wrong down the line, and this causes substantial damage to computers and sensitive scientific equipment, if the definition in the Directive is followed they will be covered but if the Minister's definition is adhered to they will not be covered. The ESB will argue that this happened not in the process of generation but rather in the process of supply. It leaves that defence open to them and to which they would not be entitled under the wording of the Directive. Why, when there may be possible adverse effects to the consumer, should the Minister cut back on the definition of "electricity" as given in the Directive? The Government have become so used to cutbacks in health, education and other areas that they have even reached the stage of cutting back on definitions in the Directive. I strongly argue that when the Directive goes out of its way to give a definition which covers all aspects of electricity, generation and supply, in the fullest manner possible, why should we reduce it? Are we legally in order in doing so? If a person was adversely affected by the change in definition might he or she not go to the European Court in Luxembourg to make a complaint stating that we have not complied with the Directive and that the Minister is at fault? It could involve considerable expense.

I hope the Minister will not say that such a contigency is very unlikely and improbable, unlikely and improbable things happen. Perhaps in ten or 20 years this issue could become a very real one involving very large sums of money and injuries resulting from a change in the definition. What is the purpose of the change? The Minister's argument in relation to the previous amendment cannot apply in this case. In that case he said he varied the Directive because his amendment improved it. As I said, it cannot apply here because the definition is clear and simple and should be followed.

There is no more succinct statement in the Directive than the three words already referred to by Deputy Taylor —"product includes electricity". There is no other qualification of electricity at that stage, it is quite succinct and clear that when we are dealing with liability for defective products the concept of product includes electricity.

The Government, in drafting the Bill, seemed to substantially depart from that very succinct three worded statement by suggesting that "product" shall include removables of all sorts apart from the exceptions we have already dealt with in the Bill. When it comes to the concept of electricity, from the point of view of the Government and the Bill, electricity is referred to only where it is caused as a result of a failure in the process of generation of electricity. I do not understand why this very restricted view of electricity and its impact on consumer life has been adopted by the Government. Who made representations to the Government to adopt this much narrower approach?

Was there a meeting with Mr. Moriarty?

Perhaps we have heard enough about meetings for today. However, I am interested to know how this came about. I worked on the Oireachtas Joint Committee on the Secondary Legislation of the European Communities when we drafted the report on this very important Directive in 1987 and 1988 and there were no representations, good, bad or indifferent, to that committee or to the author of the report on this issue. The report advises of the other interests and bodies in the Community who made very good and wide-ranging representations on issues arising in the Bill, such as the impact on the insurance industry, jobs, product liability, the farming community dealt with by the Institute for Industrial Research and Standards in Galway and the state of the art defence — about which we will be speaking later — from the Federated Union of Employers and other bodies. There is no reference at any stage from anyone in the energy and power industry in this country — or indeed elsewhere — making representations that the Directive was too widespread and sweeping in its dealings with regard to the product of electricity.

As I understand it, there are many more electricity producers apart from the ESB. Private electricity producers supply the national grid and, indeed, many electricity producers supply directly for their own use and do not avail of the ESB. Who prevailed on the Government to alter the Directive in this way? If it was the ESB I would be outraged because it would be very wrong of a conglomerate holding a near monopoly in the area of energy generation, with all their resources and the backing of Government, to be able to bring such a restricting proviso to bear on legislation and which would be against the interest of consumers. That would involve someone with a great deal of muscle exercising far too much of it in the context of a debate such as this. Our deliberations at the Oireachtas joint committee did not identify anyone making representations in this regard. We were quite happy that the report we drafted did not raise any reservations about this proviso in the Bill. I am legitimately asking where, and out of what concerns, was this qualification developed and devised.

On Committee Stage the Minister of State agreed to look at the matter for Report Stage as he was not in a position at that time to clearly indicate why this qualification to what was in the Directive was introduced. Perhaps I overlooked asking him the reasons. If my memory serves me correctly — and Deputy Taylor who will have the last word can perhaps help in this regard — on Committee Stage we were going for the wording of the Directive and the Minister was going to rethink very carefully because we had not adopted the wording in this regard. That was, by and large, how we progressed on this matter on Committee Stage. It really centred on the use of language. However, as the Minister of State has not come back with a consistent position in regard to adopting the language of the Directive, I wish to probe a little deeper into why Government proposals in regard to this very substantial restriction on the Directive in this area were arrived at.

A massive area of electricity deals with an area other than generation, I am speaking about transmission and consumption. Generation is confined to the generator at source and will primarily deal with the issues of the worker, a visitor, a licensee or whatever. It is a very restricted area and it can be argued that the interests of those involved will be very comprehensively covered under other legislation and laws dealing with a place of safety at work and work practices. However, where electricity from the point of view of the consumer will be of primary concern is in the home where it is being consumed and applied for consumption purposes to all the various different electrical appliances which make the home liveable. This Bill should be directed in towards the area of electricity — not with generation but with transmission through the community, particularly at the point of consumption, in the workplace or in the home.

It would appear from a precise interpretation of what is in the Bill that it is not intended that the standards of strict liability will apply to the electricity generator at the point of consumption, that is, in the home or in the factory. That is totally unacceptable. It makes absolutely no sense in the overall context of what we are talking about in this Bill, unless there is some good reason that has not been made known to us and was not made known to the committee who dealt with the Directive in 1987. Perhaps the Minister will be in a position to tell us why this extraordinary departure from the wording of the Directive should be entertained by us as legislators in this primary legislation dealing with strict liability in the area of electricity.

Deputy Taylor was extremely anxious that we would slavishly follow the wording of the Directive — even though on Committee Stage and again here this evening, he pointed out that there is no reason to do that — that we should make changes where we see fit. Deputy McCartan is arguing for consistency. It is important that we take into consideration the whole matter and not run away with the feeling that there is any agenda other than to have the best possible legislation. Deputy McCartan is right in saying that the frame of this amendment was put forward on Committee Stage by Deputy Taylor and at that stage, the Minister, Deputy Leyden, indicated that he would, on Report Stage, elaborate further on the Directive.

The intention of the Directive so far as electricity is concerned is indicated in a statement on the subject entered in the Council minutes on the occasion of the adoption of the Directive which states:

The Council notes that the inclusion of electricity in the definition of products in Article 2 is intended solely to cover defects which are due to a failure in the process of production of this commodity and not defects which are due to external agents intervening after electricity has been put into the network.

The intention of the Directive and, therefore, the Bill with regard to electricity is to cover surges in current but not power cuts. Failure in the process of generation of electricity is intended to refer to defects such as surges in current which could occur during the production process. When drafting the Bill it was felt that the wording of the Directive was not specific enough on this point and that account should be taken of the intention conveyed in the Council minutes.

Because the wording is very simple in terms of the Directive — when we were drafting this Bill we had consultations with the EC Commission — the wording which is in this Bill is that proposed by the Commission. There was no pressure from any source, domestic or otherwise, to make changes, as Deputy McCartan seemed to imply. It was in response to the very specific nature of the minutes of that Council of Ministers meeting where the Directive was passed, and the final wording was in total agreement with the EC Commission. In my view Deputies cannot have any basic fears as to what is specifically intended in the context of this provision.

The Minister's response on this issue introduces a novel concept. This is something I have never heard before. Many times I have heard it said that this is what is in or is not in the Directive and that line is followed but the Minister is now telling us that he is going not by what is in the Directive but by what is in the minutes of the Council which are not before the House. That is a very strange proposition to put forward. I can only refer to the Long Title of the Bill:

This is a Bill to enable effect to be given to the provisions of Directive No. 85/374/EEC of 25 July 1985 on the approximation of laws...

The Minister has gone so far — something I welcomed on the last occasion — as to add as a Schedule to the Bill the full text of the Directive. I do not think one can go behind the wording of the Directive and refer to the minutes of a meeting or what may or may not have been said under certain circumstances on a particular aspect.

The same principle applies in a court when one is interpreting a Statute. I do not think the courts would allow you — Deputy McCartan will confirm this or correct me if I am wrong — to go back to the official Dáil Reports, and say a Minister or a Deputy said this or that. The court proceeds according to the Act and interprets it accordingly. We have the Directive in black and white before us, included as a Schedule to the Bill. We cannot go beyond that and start talking about minutes. I have not seen the minutes, nor has Deputy McCartan or Deputy Flanagan. Maybe somebody argued about this or made a point out of context but under the Treaty of Rome and its amendments, the minutes have no force. Only one document has force and that is the Directive before us. That is the only relevant document. I do not think there is anything in the Treaty of Rome which says that in adopting Directives one has to have regard to the minutes of meetings or what a Minister said about these minutes.

That is a very strange note to introduce. Does that mean that, when we are adopting legislation in connection with a Directive from Brussels, as well as studying the Directive, which is difficult and complex enough, we also have to pore through the minutes to see what contributions were made by various members? As well as including a Directive as a Schedule to a Bill, are we also going to include the voluminous minutes?

Let us be serious, practical and sensible about this. This is not on. The idea of going back to the minutes or to what is subsequent to the Directive should not be entertained in the House. The Directive is rightly put before us as a Schedule to the Bill, the Directive gives the broad definition of electricity. If the Minister or whoever sends these Directives were minded to vary the Directive, no doubt there is a procedure for doing that and they should have amended it and dealt with it accordingly, but that did not happen.

We have the Directive and the definition before us — product includes electricity — and that definition should have been followed. It should not have been varied if it could have a possible adverse effect on the consumer. That is not acceptable and in the circumstances I have to press the amendment.

Question put: "That the words proposed to be deleted stand."
The Dáil divided: Tá, 75; Níl, 62.

  • Ahern, Bertie.
  • Ahern, Dermot.
  • Ahern, Michael.
  • Andrews, David.
  • Aylward, Liam.
  • Barrett, Michael.
  • Brady, Gerard.
  • Brennan, Mattie.
  • Brennan, 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.
  • Hillery, Brian.
  • Hilliard, Colm.
  • Hyland, Liam.
  • Jacob, Joe.
  • Kelly, Laurence.
  • Kenneally, Brendan.
  • Kirk, Séamus.
  • Kitt, Michael P.
  • Kitt, Tom.
  • Lawlor, Liam.
  • Lenihan, Brian
  • Leonard, Jimmy.
  • Lyons, Denis.
  • Martin, Micheál.
  • Briscoe, Ben.
  • Browne, John (Wexford).
  • Burke, Raphael P.
  • Calleary, Seán.
  • Callely, Ivor.
  • Connolly, Ger.
  • Coughlan, Mary Theresa.
  • Cowen, Brian.
  • Cullimore, Séamus.
  • McCreevy, Charlie.
  • McDaid, Jim.
  • McEllistrim, Tom.
  • Molloy, Robert.
  • Morley, P. J.
  • Nolan, M. J.
  • Noonan, Michael J. (Limerick West).
  • O'Connell, John.
  • O'Dea, Willie.
  • O'Donoghue, John.
  • O'Hanlon, Rory.
  • O'Keeffe, Ned.
  • O'Kennedy, Michael.
  • O'Leary, John.
  • O'Malley, Desmond J.
  • O'Rourke, Mary.
  • O'Toole, Martin Joe.
  • Power, Seán.
  • Quill, Máirín.
  • Reynolds, Albert.
  • Roche, Dick.
  • Smith, Michael.
  • Treacy, Noel.
  • Wallace, Dan.
  • Wallace, Mary.
  • Walsh, Joe.
  • Woods, Michael.
  • Wyse, Pearse.

Níl

  • Ahearn, Therese.
  • Allen, Bernard.
  • Barrett, Seán.
  • Barry, Peter.
  • Belton, Louis J.
  • Browne, John (Carlow-Kilkenny).
  • Bruton, Richard.
  • Byrne, Eric.
  • Carey, Donal.
  • Connor, John.
  • Cosgrave, Michael Joe.
  • Cotter, Bill.
  • Creed, Michael.
  • D'Arcy, Michael.
  • Deasy, Austin.
  • Deenihan, Jimmy.
  • De Rossa, Proinsias.
  • Doyle, Joe.
  • Dukes, Alan.
  • Durkan, Bernard.
  • Farrelly, John V.
  • Fennell, Nuala.
  • Ferris, Michael.
  • Flaherty, Mary.
  • Flanagan, Charles.
  • Foxe, Tom.
  • Gilmore, Eamon.
  • Higgins, Jim.
  • Hogan, Philip.
  • Howlin, Brendan.
  • Kenny, Enda.
  • Lowry, Michael.
  • McCartan, Pat.
  • McCormack, Pádraic.
  • McGahon, Brendan.
  • McGinley, Dinny.
  • Mac Giolla, Tomás.
  • McGrath, Paul.
  • Mitchell, Gay.
  • Moynihan, Michael
  • Nealon, Ted.
  • Noonan, Michael. (Limerick East).
  • O'Brien, Fergus.
  • O'Keeffe, Jim.
  • O'Shea, Brian.
  • O'Sullivan, Gerry.
  • O'Sullivan, Toddy.
  • Owen, Nora.
  • Pattison, Séamus.
  • Quinn, Ruairí.
  • Rabbitte, Pat.
  • Reynolds, Gerry.
  • Ryan, Seán.
  • Shatter, Alan.
  • Sheehan, Patrick J.
  • Sherlock, Joe.
  • Spring, Dick.
  • Stagg, Emmet.
  • Taylor, Mervyn.
  • Taylor-Quinn, Madeleine.
  • Timmins, Godfrey.
  • Yates, Ivan.
Tellers: Tá, Deputies Gallagher and Wyse; Níl, Deputies Howlin and Ferris.
Question declared carried.
Amendment declared lost.

I move amendment No. 7:

In page 3, line 18, after "electricity" to insert "including electricity generated by nuclear energy".

The specific reason for the amendment is to qualify the definition of "electricity" in subsection (1) (b) by including "electricity generated by nuclear energy". That is an area with which Deputy Smith will be familiar because in the previous Government for a brief period he was Minister for Energy. He will be aware that the international conventions and agreements that cover nuclear energy are very limited in their scope in terms of providing individual remedies for people who suffer loss or damage through accidents caused by the generation, transmission or consumption of electricity created by installations in the nuclear industry.

My reason for adding the qualification to the word "electricity" in the subsection is that Article 14 of the Directive states: "This Directive shall not apply to injury or damage arising from nuclear accidents and covered by international conventions ratified by the member states". That provision is geared primarily, I suppose, to draw in the EURATOM Treaty, which is the fundamental international convention regulating the European atomic energy facility and capacity. For example, we know from countless replies to questions asked in the House of the present Minister for Energy — a somewhat similar tune has been heard from the Minister of State, Deputy Smith — of the inability of the Irish Government to invoke the provisions of the EURATOM Treaty or, indeed, of any international convention to challenge Britain in the international forum about Sellafield and injuries and damage being caused to the Irish community and environment by that nuclear facility. Equally, if not all the more so, we know of the inadequacies of those conventions to deal with the personal rights of consumers.

My amendment seeks to ensure that when an individual goes before the domestic courts here suing for loss and damage occasioned by an accident from electricity generated by nuclear facilities he or she will have the same full rights as any other person standing before the courts under the provisions of this Bill. In other words, the amendment seeks to ensure that strict liability will apply because of the singular failure and inadequacies of the international conventions that deal with this area. Those inadequacies have been identified and highlighted by the inability of the Irish Government to move in international fora in that regard.

The amendment basically seeks to address that difficulty. It may to some extent depart from the wording of the Directive that at least now we have established the principle that the Directive is not sacrosanct for today's debate, so I presume the Minister of State will not use that argument against me.

I also presume he will accept that what we are trying to do is enhance the rights of the consumer as opposed to in some way restricting and taking from them. The provision is worth while and I hope the Minister of State will see his way to accept the spirit at least of what has been argued for here. It may be that I have not adequately drafted the amendment to highlight what I am attempting to deal with but I would welcome the assistance of the Minister of State in devising a better amendment to achieve the same ends, if that is what he would be inclined to do.

This is another amendment that was raised on Committee Stage, when the Minister of State, Deputy Leyden, agreed to return to it on Report Stage. I have again consulted the Office of the Attorney General in this matter and he is in agreement with the opinion expressed on Committee Stage, namely, that electricity is covered by the Bill no matter how it is generated. In the view of the Attorney General this is absolutely clear from the Bill. The proposed amendment would not create liability on the part of nuclear installations in the United Kingdom or anywhere else for nuclear accidents or leakages if such liability is excluded under the Directive.

In his own way Deputy McCartan has been able to explain to the House how he felt there were perhaps inadequacies in the manner in which he was approaching this problem. It is no harm to raise the matter. It is fair to say that the international arena as far as dealing with the matters to which he referred in the context of this Bill — which undoubtedly cannot be dealt with within the context of this Bill — are ones which warrant attention and should be dealt with in another forum.

If the Minister can assure me that electricity, generated by whatever method, including nuclear energy, will be covered by the provisions of the Bill I am happy that at least I have addressed the issue and that Article 14 of the Directive cannot be applied in the context of electricity generation as an excuse or waiver. Therefore, I am disposed to withdraw my amendment.

Amendment, by leave, withdrawn.

I move amendment No. 8:

In page 4, line 23, to delete "£350" and substitute "£50".

This amendment involves an important issue of principle. I had been proposing on Committee Stage that there should be none, or no sizeable, threshold included in the provisions of this Bill under which a litigant would not be entitled to recover damages. Section 3 proposes that there be a threshold of £350. In other words, where loss or damage accrues from a defective product a consumer would have to lose more than £350 worth of damage before being entitled to recover such cost. Of course, any damage in excess of £350 would be subject to the deduction of that minimum amount of £350. That provision would militate most of all against those who should benefit most from this type of consumer protection Bill. I am thinking of persons who could least afford to suffer loss in the first instance, namely, those who live very close to, if not below, the poverty line, almost one-third of our population. Such people in particular would be penalised and disadvantaged by the provisions of this Bill.

Other Members have expressed the view that there should be no threshold at all included. Because of the framework within which Article 14 of the Directive is drafted I was inclined to the view that we should at least adhere to that framework but fix our figure based on the economic circumstances prevailing here, those pertaining to our society rather than be bound by a European-wide figure that might be more relevant to the more advanced, industrialised areas of the central European plain but which would entail real hardship for many litigants before our courts, thereby entailing hardship for those who can least afford to suffer loss, those least able to withstand any loss arising from a defective product in any financial sense.

The answer given by the Minister of State in the course of our Committee Stage deliberations was that the Directive stipulated £350. Even though there is provision for the Minister, subsequent to the passage of the Bill, to alter the threshold figure, the Minister of State clearly indicated that any such alteration would not be effected downward. Therefore, within a given period of time — be that weeks, months or years — if it became apparent to this Government that the provisions of this Bill were having the effect I predict — namely, visiting a very serious disadvantage and penalty on the majority of our people who are less well off rather than better off — they would not intend to invoke unqualified power under its provisions to reduce the threshold figure downward, rather that the minimum figure of £350 would remain and, furthermore, if any change took place, it would be in an upward direction. That was a remarkable statement on the part of the Minister of State in the first instance — that the Government would never contemplate rendering the provisions of this Bill more workable, accessible, available to the less well off within our community. Indeed its provisions will be totally irrelevant to the greater portion of our population who might have hoped justifiably to have benefited from the strict liability standards included.

Let us remember for a moment what we are endeavouring to do by way of the provisions of this Bill, which is to divorce consumers from the onerous task of proving negligence or breach of contract, into a strict liability position so that, whenever they suffered loss, they would have a direct, unanswerable right of action against a given producer or, in certain circumstances, distributor or retailer. The provisions of this Bill were designed to afford consumers a quick effective remedy, without debate, exemption or saving clauses, without waivers, without arguments about negligence under the terms of contract and so on. It was to be a consumers' charter and a major advance in that respect.

Having accepted the spirit and preamble to the Directive, it appears we are now going to say that, while travelling in that direction, by the way, we are also introducing a proviso which will render this Bill virtually irrelevant to the majority of our consumers because of that £350 threshold. There was then the remarkable statement made by the Minister of State in the House last Wednesday that, if ever the provision with regard to the threshold were to be amended, it would be to exclude more people from having recourse to a remedy.

From my experience as a practitioner in law, £350 is in or about the standard amount one might expect to recoup by way of reasonable damage to, say, household items resulting from a defect, such as carpets having been destroyed, clothes, items of food and so on, whatever corrective action needed to be taken. In the modest demesnes within which poor people are forced to live in our community, a figure of £350 would represent a sizeable if not the total of what they might well be seeking by way of damages. Yet we are saying to such people: Sorry, strict liability is not available to you; you have to go into court — courts which at present are cumbersome and expensive — in order to argue your case. Therefore we are saying to such people continue as you have been doing; you will have no right to the standard of strict liability.

Because there is authority given the Minister under section 3 (2) to alter that threshold figure, I see no reason, good bad or indifferent that, in its drafting in the first instance, we cannot depart from the Directive and insert the threshold figure we believe to be correct. What we legislators can do today is what the Minister can do the day after its enactment. If the Minister can do it, then I see no reason we legislators cannot do it now and fix a figure that will render the provisions of this Bill accessible to the majority of our consumers and render them somewhat more meaningful in their operations once effected. I urge the Minister to accept this proposal. To do otherwise is to be unnecessarily restrictive of the Directive and to render the legislation disappointingly ineffective for the vast majority of people who would otherwise see it as a good day's work on our part.

My colleague stated last week on Committee Stage that this amendment conflicted with the provisions of Article 9 of the Directive which sets a lower threshold of £350 in respect of damage to or destruction of property arising from a defect in a product. The figure applies not to damage done to the defective product itself, which is clearly covered by contract law, but to damage to other property caused by some malfunction in a defective product. For example, if an electric kettle or other appliance bursts into flame due to some defect in that appliance, then any damage caused to, say, kitchen furniture or fittings in excess of £350 would be covered.

It is clear from the contribution by Deputy McCartan that he is setting out to ensure that people who purchase a product which proves to be defective have adequate access to compensation. However, he is not clearly distinguishing between the defective product itself and the damage to property arising from the use of the defective product. This section is very specific. As far as I can ascertain, within the constraints of the general regulations laid down for the implementation of the Directive, it leaves absolutely no room for manoeuvre.

What is subsection (2) all about?

This is a new Directive which will constitute new European law. It is focused in a particular area and I do not think it would be possible to meet the kind of considerations outlined by Deputy McCartan within the context of this Bill. Where there is a defective product, normal recourse to existing legislation will enable the offended party to gain compensation. If we were to include figures of the order the Deputy has outlined, perhaps the main thrust of what we want to achieve in this legislation could not develop. I have tried to ascertain the position as far as I can in the context of our obligations under the Directive and I am absolutely assured that we have no discretion with regard to changing this provision. I regret, therefore, that I am unable to accept the amendment.

I am disappointed to hear the Minister reiterate what his colleague said last week, i.e., that he is not in a position to vary the order. He has given himself power to do so in subsection (2). There are cases where access to justice is very limited. For that reason the Government have decided to establish a small claims court. This court is to be introduced early in 1992. Access to justice in respect of small claims will be much cheaper. The Minister could usefully include this legislation as qualifying for inclusion under the small courts procedure. Obviously consumers will suffer damage to their property caused by defective products to a lesser extent than £350 but many people will not be able to afford any such loss. People living in poverty must seek redress in whatever way they can for damage done to their property by a defective product. It would cost them very little to go to a small claims court to seek compensation. The excess of £350 will mean that there will be no frivolous claims before the courts. However, this will mitigate against the consumer seeking a smaller award in respect of damages caused. It works very much like an excess clause in an insurance policy which stipulates that the first portion of a claim is automatically absorbed by the policy holder.

That is sensible.

The figure of £350 is ridiculous. The sum of £50 stipulated by Deputy McCartan——

If it applied to the product it would be ridiculous but it does not.

I do not accept the argument that the defective product should not be part of the claim. I do not see why the consumer should be at the loss of the defective product, apart from the damage caused by that product. The consumer is now to be at the loss of the defective product and of any damage where the total cost is less than £350. These consumers are entitled to compensation in the same way as people who can afford to buy a replacement for a defective product and bear a loss up to £350 while being able to claim for any damage in excess of that figure. Deputy McCartan's case is very reasonable. Frivolous claims would be eliminated by having an excess of £50. The small claims procedure would allow the consumer to go into court in an inexpensive way to seek compensation.

The fact that this amendment had to be put down, only to be rejected by the Minister, highlights the fact that this Bill is very far from the consumers' charter that it is cracked up to be. It is so hedged around by restrictions, exceptions and exclusions it is not really going to be of very great benefit to the bulk of people who would wish to use it and who might think, from reading about it, that it is going to cover the case of a person who buys a consumer item such as a fridge or television set which goes wrong.

The product itself?

Yes, or consequential damage. The main category of claims arise in respect of the product. I do not want the Minister to tell me that if one is in a contract relationship one can claim against the shopkeeper from whom one bought the product. I know that. If one is in a contract relationship one can throw this Bill out the window; one would be better off without it. In a contract relationship one does not have to worry about this nonsense of not claiming for the article itself, consequential damages being more than £350 or any injuries, because one is entitled to fully claim for all in the normal way.

Would the Deputy not advise his constituents to do that?

Of course I would.

The Deputy would not like the law to encourage them not to.

If a constituent of mine or of the Minister buys an item which is defective they should get recompense for all the damage it does. I am sure that is what the Minister would advise his constituents to do at his clinics. They would be entitled to recompense in law. There is no problem when they are in a contractual relationship with the shopkeeper who supplied the article and when that shopkeeper is still around to be made amenable.

This Bill is supposed to deal with situations where a person buys a fridge, television or some other article which goes very wrong and the person they bought it from, as happens regrettably all too often, is no longer there, has gone into liquidation or not available. In such cases the person who is injured and suffered loss is thrown very much back on the Bill. Unfortunately, when they come to look at it, they will find to their sorrow that it is not going to do them very much good because the first claim they make is for damage to the article. I am sorry the Minister's colleague, Deputy Michael Barrett, is not present because earlier he highlighted the case of a person who had bought a dangerous and defective pram. He was very anxious that that person should be covered. I wish he was present so that I could tell him he can forget it because the article is not covered. Damage to property which may be less than £350, which is the overwhelming bulk of cases, is also not covered.

Does the Deputy want me to cover those situations so as to get at the kind of cowboys he is talking about or does he want to encourage people out of that situation?

I want the cowboys to be responsible if they cause damage to property even if it is £300. I do not want them to be able to say: "I am clear because only £300 in damages was caused". I want the cowboys to have to pay the £300 because that is a great amount of money to some people and a big addition to their household burdens. It will be no consolation to people who are at a loss because of these cowboys to say the damage caused was only £300 but if the damage caused was £400 they would be in business. However, they would not get £400, they would only get £50 because of the threshold limitation we are putting in.

I take the view — I said this on Committee Stage — that there should be no threshold. I disagree with Deputy McCartan's amendment in that respect. He proposes reducing the threshold to £50 but I do not think there should be any threshold. If we are bringing in a new principle and a new concept of strict liability, let us do the job properly or not. Why bring in this new concept and make out that it is a big new deal for consumers, that there will be strict liability for the cowboys who send out defective products into the community and say they will have to pay up——

The Deputy has the wrong approach.

——but when. First, they will be liable only for amounts in excess of £350 and, second, they will not be responsible for the actual damage to the product. That is the strangest provision I have ever heard. As Deputy Hogan rightly said, it is the most ridiculous provision in a measure of this type. It is obvious to people that the first thing a person who is sold a defective item ought to be put right on is the replacement of the defective item. That is the one thing being excluded from the Bill. The Bill has no rhyme, reason or sense to it. That should be the number one item to be reinstated. The Minister is shaking his head. I know that if a person has a contract he or she will get recompense but the Bill does not address this issue; it addresses the situation where the person who sold the item is in liquidation or where a person cannot get recompense and has to go higher up the line to get it.

When are we going to grow up and really help those people and not encourage them into traps?

Now is the time and that can be done by accepting the amendment.

The Deputy is seeking to shelter the cowboys.

We can help them by cutting out the hedgings the Minister is giving them.

The Deputy is seeking to shelter the cowboys.

How can the Minister suggest that.

This is a pro-cowboy provision.

I must remind the House of the procedure. There can only be one contributor.

My apologies.

Acting Chairman

The mover of the amendment can speak twice.

Thank you, Sir, I am glad you intervened.

The Deputy is provoking me.

I must be succeeding well if I am provoking the Minister.

The Minister asked when we are going to cop on and deal with the cowboys. That is a very good and correct question. I say the time to do this is now. We could make a major contribution to this by accepting Deputy McCartan's amendment. Deputy McCartan is trying in his amendment to remedy to some extent a very serious exploitation by cowboys which the Minister is permitting in this section. That will mean they will not be responsible unless the damage caused to property amounts to more than £350. In other words, if a person suffers damage of £100, which is a great deal of money to some people, they will get nothing and if the damage caused amounts to £400 they will get £50. If that is not a get out for the cowboys I do not know what is.

The Deputy is telling a different story.

The Minister is harping back, when it is convenient to his position, to the Directive. He says he is tied by the Directive, but I want to remind him of his remarks at the beginning of this debate earlier today when he said that none of us should be too hidebound by the Directive; those who say we must follow its words exactly or those who say we need not follow its words exactly. This is a case in point. We should be sensible in making this law and say, "this is an admirable concept, the idea that a person who sells a defective item which causes damage, self-destructs or damages other property, has to pay for it whether it is more than £350 or less than £350, otherwise, the Act will not be in application at all". The first pre-requisite of the Bill is that the item has to be defective, so why protect them and say they can cause damage to property provided it is less than £350? We are giving them a free run up to £350. That makes no sense in law, is not commonsense and makes no logic. People out there would not understand what the Minister is about in doing that. We can remedy the situation for the most part, although not completely, by accepting Deputy McCartan's amendment, which I support.

I am very disappointed and even more confused with the Minister's response and more confused yet again with the interjections he has made across the Chamber to Deputy Hogan and to Deputy Taylor suggesting that from the position we argue we have the wrong approach. Let us look at the legislation for a moment and see who is being protected and who has the right and the wrong approach. On the one hand, is the cowboy — the person who peddles the defective product — and on the other the consumer. Under the provisions of this Bill there is doubt in the minds of the Opposition that the issue of consequential loss may not be adequately covered. The defective product is excluded. If it is defective you cannot get compensation for it on strict liability terms from the cowboy. For other items of property which are damaged you can only obtain compensation if they are items which are used ordinarily in the private use of the individual. Nothing used in the area of work or employment or of public use is covered by the Bill. Primary agricultural products, fisheries, and game are excluded from the Bill. All items of development, of industry and research that can claim they were using the "state of the art" defence — the best available knowledge to them at the time — are entirely excluded from the workings of the Bill. Only the generation of electricity is covered but not its transmission or consumption. Now we have a proviso that says that if the extent of the damage caused by the defective product is under £350 you get nothing and anything over £350 will be deducted, the first £350 in the first place. That is what is contained in the Bill so far as the cowboy is concerned. He will be happy that this Bill is not what it is presented to be.

We started out with the basic Directive that said it is useful in the European context of consumers' rights to introduce strict liability as a test when one comes to establish the rights of the consumer vis-à-vis the producer. All of these qualifications, modifications and detractions forming the principle I have outlined have been introduced: some because the Directive says so, more because the Government have added to the definitions — some in the most remarkable circumstances, one relying on a minute of a meeting of the Council of Ministers not embodied in any Directive and others where there is a proviso available to derogate and we have opted not to derogate. It is not because the Government's hands are tied in all instances by the Directive. The Minister says that by arguing to lower the Directive we have got the wrong approach. I believe the Government have got the wrong approach and I am totally at a loss — Deputy Taylor has argued this point far better than I could and there is no point in my repeating it — to understand the Minister's point of view. Later, when we come to debate similar type amendments, perhaps the Minister would suggest to us how we are wrong and the Government right in this area.

The Minister suggests the amendment is in conflict with Article 9. Article 9 sets down the figure of 500 ECU, which is equivalent to £350 in our money terms. If we are absolutely bound by the proviso of £350 why do we have in subsection (2) a provision that enables the Minister and gives him the power to alter that figure when there is no provision in the Directive, explicitly dealing with the figure, to alter it. There is talk about reviews at five and ten year intervals under different Articles. We were told by the Minister of State, Deputy Leyden, on 23 October 1991 that there have been no reviews on the workings of this Directive at any level so far because it has not been in operation on a sufficiently wide basis within the Community. Therefore, I query why there is a proviso in the Bill allowing the Minister the day after the legislation is passed to alter the figure if we are so inextricably bound to the Directive and what is contained in the Articles. I am completely at a loss and totally confused.

The Minister suggested to Deputy Hogan that if this threshold applied to the product itself he would have doubts about it, but he could see the logic of the argument we were making. I do not understand what is the difference between the product itself on the one hand and the loss to the consumer from the defective product in the home or wherever it is used. What is the difference?

Read up the statistics on those things.

I would like to have heard some statistical information with regard to this matter and I am glad the Minister has mentioned statistics. We had an in-depth discussion with his colleague, the Minister of State, Deputy Leyden, here last Wednesday about the statistical basis on which the Government were proceeding with some of the provisions in the legislation, one of which was their failure to employ the derogation with regard to primary agricultural products. The Minister of State, Deputy Leyden, said last Wednesday that that would increase the cost to the farmer substantially on the insurance level. When we asked that he give us statistics he said he had none and was not in a position to quantify. He said they are just not available. I am glad the Minister of State, Deputy Smith, has suggested that in this area I should be reading statistics. Tell me where they are, I will read them.

Let us have the minutes of the Council of Ministers meeting.

Deputy Taylor suggested that the Minister might let us have the minutes which he so copiously relies upon in pursuing a deviation from the Directive. I would like to see statistics that suggest there is a difference between the working of the threshold with regard to the product and the consequential damage to property from a directive product from the point of view of the consumer.

Not a difference but a substantial difference.

I am interested in dealing with this legislation and I suspect again from the Minister's interjections——

We are talking about real percentages here.

——that the Minister's point of view is not that of the consumer——

——but of the trade, the retailer and the manufacturer. That is the only basis on which I can understand the Minister's interjections in the arguments I am making.

I am not allowed to.

If one approaches it from the point of view of the consumer I cannot see why a threshold is any different in terms of loss when you are dealing with a product itself and when you are dealing with consequential loss. In short, if the consumer is to be compensated, he is best compensated in full. The introduction of a threshold is a penalty on the consumer. There is no other way of looking at it. It is more than a penalty when it comes to dealing with the vast majority of very poor people in this community who can least afford loss consequential on a defective product. I do not need to be reminded that we are not talking about the defective product itself in the context of the Bill. I am talking about people affected, because the washing machine is defective, the floor floods, and the floor covering has to be replaced; or, in the case of a defective heater or a kettle, the wallpaper or the worktop has to be replaced. For working class people, for poor people, who can least afford thresholds, £350 could be the making or breaking of their opportunity to put right what was done wrong by reason of a defective product and for them the threshold is a very real penalty. The figure of £350 by and large will render this legislation inoperable and unusable. This approach must be added to the other litany of outs, of reservations and qualifications to what was in the first instance, a very good principle.

This side of the House argues very consistently a much better approach to the protection of the consumer than do the Government and I urge the Minister at this late stage to recognise that what we are doing is equitable and fair and that the Government should make up their own mind on this and in the spirit of subsection (2) recognise that they have the power to deviate from the Directive in this regard and say that they intend to do so in the best interests of the majority of the community.

Would it be possible to seek clarification from the Minister?

I do not want to create a precedent here.

It is just a clarification.

Acting Chairman

I will give the Minister an opportunity to give an explanation.

Can the Minister say exactly how much 500 ECU is in Irish money?

It is exactly the figure put forward, £350.

It is not.

If the Deputy wants the precise figure I will give it to him in a few minutes. There are only fractions involved.

Amendment put and declared lost.

I move amendment No. 9:

In page 5, to delete lines 15 to 18.

In discussing this amendment I can say that my reason for not calling for a vote on amendment No. 8 is that amendment No. 9 is the single most important provision which we will debate in the context of this legislation at this stage.

Having dealt with the issue of primary agricultural products and the failure of the Government to deal with this, amendment No. 9 is one of the most important, central issues in the legislation. The amendment proposes the deletion of paragraph (e) of section 6 which establishes a number of defences available to the producer, indicating that the producer will not be liable in strict liability terms for damages to the consumer in certain circumstances. Paragraph (e) outlines the circumstance:

that the state of scientific and technical knowledge at the time when he put the product into circulation was not such as to enable the existence of the defect to be discovered,

This is what is known as the "state of the art" defence. Where a product is defective and causes damage or loss to the consumer a producer can argue in court that the circumstances were such that the state of the scientific knowledge and information available to the industry generally and to the producer at the time was such that the subsequent defect that caused damage would not have been known at that point of the process. It is argued that this is the licence for the inventor and that if this defence was not available the area of exploratory invention would be eliminated and that we would not get producers to come forward prepared to take a chance. It is argued that it would be penal in the area of research into drugs and other such items if this defence were not available to producers. In some of the papers I have read with regard to this legislation the argument has been made that if this type of defence had been available to the producers of, for instance, the thalidomide drug, there would not have been cause of action available to the victims of that horrendous drug. There are perhaps other legal remedies but in the context of this legislation if one were to establish and maintain this type of defence in the area of pharmaceuticals the manufacturers of thalidomide could have said that when they produced the drug they did so on the basis of the best scientific and technical knowledge available at the time and that they could not have anticipated the horrific consequences that emerged when the drug was put into circulation.

This is a very live issue, particularly here where we are seeking to develop a strong industrial base based on scientific research and on the drugs industry. It behoves us to scrutinise what exactly we are being asked to do having regard to the establishment of this defence. The legislation seeks to establish strict liability on the part of the consumer for loss consequent upon a defective product. This defence is basically saying to the consumer that he must take a chance with all new concepts, new products and new ideas coming on to the market. It is saying that the producer, the manufacturer and in some instances, the distributor and retailer are entitled to take a chance on the basis of the best available information. They can always rely on that in court action should things go wrong. From the consumer point of view, which I am arguing, the concept is unacceptable and has horrendous implications.

The Directive is not binding in this regard. It provides the opportunity for Government to derogate and to say that we will not make this defence available in our domestic law and that we will establish the right of all consumers to pursue damage, loss or injury as a result of a defective product. In doing that our Government will be doing no more than did other EC countries. We will not be unique, we will not be the odd ones out. Other countries have signalled their intention to seek a derogation. The Minister has indicated that one country has sought a derogation and that makes my case. From preparing the report of the Oireachtas Joint Committee I know other countries were intending to seek a derogation and I would like to know why they have not. Because of the peculiar nature of the industrial base we are trying to develop in the area of pharmaceuticals and because we are seeking to build an industrial base dependent on research and development, it is important that we seek to establish the highest standards possible. I believe that the employment of the derogation in this area will work to that end. It is similar to the argument in the context of primary agricultural products. We should not have exempted them from the provisions of the legislation because again it would be a signal to the wider community that we have nothing to hide, that we do exert and expect the highest standards and, most important in the context of this legislation, that we stand four square behind the consumer and seek the ultimate and best protection for them.

I propose that we delete that paragraph from the Bill and mandate the Government in this House tonight to seek a derogation from the Article in that area.

I am also concerned at the inclusion of this clause. The Minister should consider deleting section 6 (e) of the Bill which makes it a defence for the manufacturer or other producer as defined in the Bill to prove:

(e) that the state of scientific and technical knowledge at the time when he put the product into circulation was not such as to enable the existence of the defect to be discovered.

Allowing this defence to manufacturers or other producers runs against the whole purpose of this Bill. The major beneficiaries of such a defence will be big chemical and pharmaceutical companies. Where these companies are sued for injuries caused by defects in their products, it will be almost impossible for the injured consumer to defeat this defence in most cases; no doubt these companies — many of them huge multi-national corporations — will back each other up and swear blind in the words of section 6 (e)

that the state of scientific and technical knowledge at the time when he put the product into circulation was not such as to enable the existence of the defect to be discovered.

If other manufacturers have to compensate the injured consumer of a defective product for injury caused by that product, there is no justice in saving large drug companies from their mistakes — particularly when these drug companies are better able to afford to compensate the injured consumer than, for example, the bakery which turns out contaminated bread. If, for example, we were to witness another Thalidomide disaster — and I pray God that we will not, but no one can say that we will not — it would be a disgrace if the grievously injured children were unable to sue under this Bill because of section 6 (e). I, for one, would not like to have to explain to the parents of such children why they have no remedy under this legislation because of section 6 (e).

Article 15 (1) (b) of the Directive expressly provides that each member state may:

subject to the procedure set out in paragraph 2 of this Article, provide in this legislation that the producer shall be liable even if he proves that the state of scientific and technical knowledge at the time when he put the product into circulation was not such as to enable the existence of a defect to be discovered.

Therefore, there is nothing to prevent the Minister from withdrawing the existing section 6 (e) of the Bill and inserting a new section providing that the manufacturer or other producer shall be liable "even if he proves that the state of scientfic and technical knowledge at the time when he put the product into circulation was not such as to enable the existence of a defect to be discovered".

This is a very important section and there is genuine concern that the ordinary person will not be in a position to take on the companies concerned in this event. This is a major flaw in this welcome, long overdue legislation.

This amendment and subsection go to the root of the Bill. I had an identical amendment down on Committee Stage. I thought I had reentered it for Report Stage but it seems to have got lost along the way. That is no matter. The important thing is that the amendment is before the House.

The question arises of what we are doing in a Bill of this nature by allowing this defence to be there. It has no place in a Bill of this character. As has been said, in respect of this important matter the Minister cannot say that he is bound by the terms of the Directive and that while he might sympathise he has no choice in the matter. He is specifically given the power of derogation in respect of this item in Article 15.

I do not think Deputy McCartan is quite right when he said that he would have to go back and seek a derogation. I think the derogation is written into the Article itself. It is intrinsic and there is nothing to stop the Minister availing of it this minute by agreeing to this amendment if he was of a mind to do it. The specific provision is made for that.

To allow this defence is completely alien to the basic thrust of this Bill. What is the basic thrust of this Bill? It is to provide for strict liability on producers or manufacturers who send out for public use a defective product, irrespective of whether they were negligent or not. That is the essence of the Bill. If the Bill is not doing that, it is not doing anything.

Even if there were no defective products Bill passed into law at all, what is the legal position so far as defective products are concerned? The first point is that a person who bought a defective item from a vendor will have a contractual claim against him. That is existing law. Where a producer or a manufacturer produced and sent out a defective product, and it can be proved that they were negligent in so doing, again under existing law there is no problem and a person who can prove that negligence will have a claim. We do not need the Bill or this new Act to cover a situation either where there is a contractual relationship or where negligence is provable up along the line. The Bill adds nothing to those situations because they are already well covered under existing law. There is no doubt about that.

The one type of new circumstance which is not covered and which the Bill, in its broad approach, quite rightly seeks to address is one in which there is no contractual relationship and where there is no negligence or negligence cannot be proved. That is the category for which the Bill caters. If that aspect of the Bill is taken away, there is nothing left because everything else is covered under existing law and is not worth introducing or taking up the time of the House on. That is why the Directive includes a right of the Minister to allow the derogation. Yet the Minister refuses to take up the option which is given to him in the Directive. Why does the Minister refuse to take up the option he is given in the Directive to allow this derogation in ease of the consumer? Who benefits, and who pays as a result of the Minister's approach on the issue? First, there would be no charge on the taxpayer. The losers would be the manufacturers and producers who sent out the defective products, while the gainers would be the persons who suffered as a result of consuming or using a defective product.

There is a choice to be made: who is to lose and who is to gain. The Directive intends that it should be the consumer who should gain and we should be on the consumer's side. I suppose it could be argued that, if a producer manufactures and prepares a product which turns out to be defective through no fault of his and somebody sustains a serious injury as a result of eating or using it, it would be hard on the producer or manufacturer if they had to pay damages to compensate the person who sustained the injury when he was not negligent. I take that point but we have to look at it this way: a serious injury was done and damage caused by, let us say, a pharmaceutical product — not just Thalidomide, there are others and a case is pending with regard to the drug Attivan. I believe that there will be others with regard to drugs which were defective and which destroyed people's lives, to put it in a nutshell.

The question which then has to be determined is whether that person should get compensation from the manufacturer who produced what turned out to be a defective product even though he was not negligent in producing it. One party or the other would have to suffer for the damage done. Either the person who took the pharmaceutical product and destroyed themselves in their innocence would have to carry that and all that it involves or the manufacturer and producer would have to carry it even though they were not negligent. Somebody would have to suffer and we in this House on this amendment have to decide who it should be. Should we try to put the consumer who bought and used the product and suffered or was injured, in their original position by compensating them or should we say no, that they should carry the can and that they should get no compensation in respect of the injury sustained and the disruption caused and that the manufacturer, because he was not negligent in the production process, should go free and should pay nothing? That is the choice.

I have no hesitation in saying, in the spirit of the Directive, regardless of whether the producer or manufacturer was negligent, the fact remains that it was a defective product. The Bill will not apply unless it is a defective product. I say without any doubt or hesitation in my mind on this issue — and I have thought about it very carefully — that the producer and manufacturer prepared a defective product, a member of the public suffered grievously and they must compensate that person. It would be utterly unjust of us in this House on this Bill, which provides for strict liability, to give that manufacturer and producer an out to say that they should go free and that the person who suffered as a result of using a defective product should carry the can. That would be very unjust.

I have been talking about the category of case where there was no negligence. I would now like to talk about another category, the case where they were negligent but a person cannot prove it. This probably applies to a case involving a pharmaceutical product more than any other; it could apply to many others but it is easily understood in the realm of pharmaceuticals. When one of the big multinational companies produces a new drug, the state of the art, for example, Thalidomide or Attivan, and people's lives are wrecked as a result, the question of bringing a claim against them arises. I understood this matter as I have been involved in this kind of case.

The pharmaceutical companies, the producers, have at their disposal expert witnesses. When one talks about state of the art one is talking about the evidence in court of the top experts in this field. They can hear two dozen experts because, when something goes wrong with a drug, the expression "a catastrophe" is not too alarmist an expression to use because the results which ensue are nothing short of catastrophic; so it was with Thalidomide and so it is with Attivan and other drugs. They have these experts in their laboratories and they can pay for them because they are multi-billion pound firms. Some of them probably have budgets bigger than the budget of this State and they have no problem in calling up the experts who will tell the court ad nauseam or in as complicated a fashion as one likes that it was state of the art, that they are very sorry and that they did everything they could, all the tests and all that was known to man but, notwithstanding all this, it turned out to be a catastrophe and people's lives were destroyed. They will call in the experts to establish the state of the art defence. They have those people on their staff and, if they do not, they will pay through the nose to get them.

That is their side of the picture but what is the position of the unfortunate consumer? Where are they going to get an expert from? Where are they going to get even one expert who would have knowledge of the tests done on the drug or who would know sufficient to counter the evidence of the team of experts which the pharmaceutical company can and will call in? It is a very serious business for them. The profits from new drugs are enormous. Millions of pounds are involved and if these new drugs go wrong the damages also run into millions. They will spend inordinate amounts of money on lawyers and, more importantly, expert witnesses to resist the claim and to establish the state of the art defence. There is no limit to it. It is a very uneven contest. Indeed, it is so uneven, I will not say it is impossible — nothing is impossible — but it is well nigh impossible for the injured party to prove negligence. A person just cannot get the experts they need to establish negligence in that situation. That is why it would be unfair and unjust to leave the manufacturers and the producers with that defence.

The essence of this Bill is strict liability, if we allow that state of the art defence it is no longer a strict liability Bill. We are back to a negative position and the Bill will be of little value if this defence is allowed to remain. I urge the Minister to accept this critical, crucial amendment and to give the Bill what was intended by the Directive. I am sure that every Member of this House would like this to happen. Deputy Wallace's contribution was spot-on and I am sure that many backbenchers on all sides feel the same way about the Bill.

Will the Minister assure the House that this legislation will take effect, not just throughout the European Community but throughout the European economic area, that in the EFTA-EC area like legislation will apply since products from the greater European economic area will now be accessible throughout the European Community in the same way as products of EC member states?

This is very technical legislation. It is clear that it has been prepared not by parliamentarians but by Eurocrats, passed to our civil servants and processed by them. Given that situation and the developments in Europe it is time not just to look at reforming this House and putting such technical Bills through Committees of the House but also looking at the whole question of a bicameral system at European level to vet these directives and this legislation in the first instance. Perhaps the Minister will be good enough to answer the question I raised in relation to the European economic area.

I thank all my colleagues who contributed in the most committed way to the debate on this amendment. As Deputies stated, member states were allowed under Article 15 of the Directive to exclude this defence, known as the "development risks" or "state of the art" defence. In accordance with the Government decision, taken at their meeting of 16 April 1991, it has been decided to include the defence in the provisions of the Bill.

During the discussions on the Directive at EC level some member states argued — as forcefully as Members here have — that the inclusion of this defence was contrary to the principle of strict liability and, in certain cases, would leave the consumer with recourse to compensation. This defence, would, it was claimed, also bring about problems relating to proof and the courts would have to give lengthy consideration to cases where the defence was used. Most member states, however, argued that the absence of such a defence would cause enormous problems for manufacturers, for example, the high cost of insurance and the stifling effect on innovation, especially in high risk industry such as pharmaceutical production, where considerable research is involved in the development of what are in many cases life-saving drugs. Regarding insurance costs, the Irish Insurance Federation feel that the exclusion of the "development risks" defence would have a serious inflationary effect on liability insurance costs.

In any event, the burden of proof will be on the producer to show that, because of the state of scientific and technical knowledge at the time the product was put into circulation, he could not have been expected to discover the existence of the defect and providing such proof is likely to be extremely difficult.

In their report on the implementation of the Directive on Product Liability the Fifth Joint Committee on the Secondary Legislation of the European Communities favoured the inclusion of the "development risks" defence as they felt that the higher insurance premiums which would probably result from its exclusion would damage producers' competitive positions both on the home and foreign markets. I do not know whether Deputy McCartan was a party to the decision but he would have been quite familiar with its implications.

Of the nine member states who have so far implemented the Directive, eight have included "development risks" defence in their national provisions. Of eight, Germany has extended the defence to all products except pharmaceuticals for which such provisions had already been in force nationally for a number of years.

Article 15 of the Council Directive also states that the option relating to "development risks" will be reviewed by the EC Commission ten years after the date of notification of the Council Directive, i.e. after 25 July 1995 and the Commission may, in the light of the experience of member states in relation to this option, make proposals to the Council for changes. This is the essence of what has happened in the Community so far. In reply to Deputy Mitchell, quite a number of EFTA countries are already in the same position.

Deputy Taylor, Deputy Wallace and Deputy McCartan made very concentrated points relating to genuine fears regarding the freedom which the pharmaceutical industry might have in the context of this amendment not being included in the Bill. There was a reference to the Thalidomide disaster and its results on families; nobody wants to see that repeated. However, it is important for Deputies to understand that these matters are controlled through the Medical Preparation (Licensing, Advertising and Sale) Regulations, 1984 and 1989 and are primarily the responsibility of the Minister for Health. In accordance with these regulations every medicinal product sold must have an authorisation granted by the Minister for Health. These authorisations are granted on the recommendation of the National Drugs Advisory Board who test the preparation in question with particular regard to quality, safety and efficacy.

Patenting and subsequent authorisation of products can take eight to ten years and, therefore, there is a need to make sure that the right type of encouragement is given for investment in research. I am talking about research in the broadest term because all Deputies will accept that we do not have enough research and that the percentage ratio to our gross domestic product is not on a par with many of our competitors. They will also accept that a great number of people are seeking post-graduate courses and that we will want them to carry out research here in pharmaceuticals, electronics or in other high-tech areas. We must try to make sure that that happens.

It is very important in a Bill like this to strike a balance in the difficult scenario of encouraging more investment in research which produces the kind of drugs we all want to see on the market to deal with cancer, AIDS, heart disease and unanswered medical questions. We must find resources and get young people into the sophisticated system where developments of that kind will continue to take place because it is of paramount importance. Nobody is arguing in that regard and I know everyone is in favour of such a policy. You are as concerned about AIDS, cancer and so on as I or anybody else. In this country we have been unable to ensure that the resources that are necessary are made available. Certainly, as Minister for Science and Technology I have fought, particularly on the European front, to enhance and improve research and activity which would support the initiatives that we take. It is of fundamental importance that we create a better climate for that to happen. That is not to say that any group, company or individual would find it easy to produce — Deputy Taylor was inclined to suggest that there are those who would want to put a defective product on the market——

I did not say that.

I do not want to put words in the Deputy's mouth but the emphasis on what he said tended to be that that is almost a prevalent condition.

Not at all.

Let us look at the facts. If I was a manufacturer would I want a bad product? Would I want the publicity attached to the legal scenario outlined by the Deputy? It would be in my interest as it would be in the interest of the young graduate working in research not to work in an environment that would produce anything that is dangerous. It is in everybody's interest that the test system — I referred to the authorisation as far as the Department of Health are concerned — be enshrined and operated in the toughest and most stringent way to protect people from ever having to suffer as did young mothers and children deformed as a result of Thalidomide. Even up to today there are other potential problems which have been outlined, but unfortunately we cannot deal with all of these. You can take a scenario whereby the risks are too great and where one would not look for a special drug to solve a certain problem. There are risks involved in the investment, in the testing apparatus and so on needed to bring these drugs onto the market.

All I am saying to my colleagues in this House — I am not pretending that there is an absolute position on this in the sense of who is 100 per cent right and who is 100 per cent wrong — is that there is an onus on us, when there is authorisation from the point of view of pharmaceutical firms and legislation is in place and is being rigidly adhered to, not to place further inhibitive factors in the way of carrying out as much research as we can into these matters. I would like this country to be in a position to invest more in research. I would like to see many more of our bright people here at home involved in research. By the implementation of such policies we would be able to ensure that the products we produce in this country, whether in the electronic, pharmaceutical, food or health area, are of a high quality, safe and efficient. That is the aim and that has to be achieved. In regard to this amendment, I think Deputies will appreciate that one side is not trying to pretend that they have all the answers, that doors will be opened and that consumers will be affected detrimentally by it.

With regard to insurance, Deputy Taylor knows from his experience, that these measures can result in the consumers having to pay, with the person who is least able to afford it having to pay more money. More fundamental is the fact that in a world which has reached across bridges, soared to the sky, sank into the sea and made major improvements in a lot of areas, there are still testing problems in the health and other areas that have to be researched. We must find an apparatus, internationally and nationally, which supports that endeavour; but in so doing we must ensure that nobody can bring to the market products or pharmaceutical goods that will damage anybody in the community.

As far as the Government are concerned we have tried to find a balance. I hope Deputies will accept that our interests in this matter are the same as theirs. Nobody is sure who has all the answers. I would ask the Deputies to withdraw the amendment in the context of what I have said. I have tried to explain why the position is as it is and that all matters in the context of the regulations governing the areas I have mentioned are already covered in existing legislation.

I thank the Minister for his very spirited rejection of my proposed amendment. I have listened carefully and understand the reasons he has given. They amount to two basic propositions: that to accept the amendment and not include a defence in our law would, and I quote, present enormous problems for producers on the one hand and that it would lead to serious inflationary effects on insurance costs on the other. With those two reasons being advanced one wonders why bother with this legislation at all. When talking about balance I believe we should approach it from the point of view of the consumer. The Minister presented a very flowery image of reaching to the heights of the skies and the bottom of the seas; but that is done for the consumer and it is from the point of view of the consumer that we should be legislating. The Minister's rejection of my amendment leads to a very basic inconsistency in Government thinking in this area and for that reason I insist that the question be put.

Question put: "That the words proposed to be deleted stand".
The Dáil divided: Tá, 72; Níl, 18.

  • Ahern, Bertie.
  • Ahern, Dermot.
  • Ahern, Michael.
  • Andrews, David.
  • Aylward, Liam.
  • Barrett, Michael.
  • Brady, Gerard.
  • Brady, Vincent.
  • Brennan, Mattie.
  • Brennan, Séamus.
  • Briscoe, Ben.
  • Browne, John (Wexford).
  • Burke, Raphael P.
  • Calleary, Seán.
  • Callely, Ivor.
  • Connolly, Ger.
  • Coughlan, Mary Theresa.
  • Cowen, Brian.
  • Cullimore, Séamus.
  • Daly, Brendan.
  • Davern, Noel.
  • Dempsey, Noel.
  • Dennehy, John.
  • de Valera, Síle.
  • Ellis, John.
  • Fahey, Jackie.
  • Fitzgerald, Liam Joseph.
  • Fitzpatrick, Dermot.
  • Flood, Chris.
  • Flynn, Pádraig.
  • Gallagher, Pat the Cope.
  • Geoghegan-Quinn, Máire.
  • Hillery, Brian.
  • Hilliard, Colm.
  • Hyland, Liam.
  • Jacob, Joe.
  • Kelly, Laurence.
  • Kenneally, Brendan.
  • Kirk, Séamus.
  • Kitt, Michael P.
  • Kitt, Tom.
  • Lawlor, Liam.
  • Lenihan, Brian.
  • Leonard, Jimmy.
  • Lyons, Denis.
  • Martin, Micheál.
  • McCreevy, Charlie.
  • McDaid, Jim.
  • McEllistrim, Tom.
  • Molloy, Robert.
  • Morley, P. J.
  • Nolan, M. J.
  • Noonan, Michael J. (Limerick West).
  • O'Connell, John.
  • O'Donoghue, John.
  • O'Hanlon, Rory.
  • O'Keeffe, Ned.
  • O'Kennedy, Michael.
  • O'Leary, John.
  • O'Rourke, Mary.
  • O'Toole, Martin Joe.
  • Power, Seán.
  • Quill, Máirín.
  • Reynolds, Albert.
  • Roche, Dick.
  • Smith, Michael.
  • Treacy, Noel.
  • Wallace, Dan.
  • Wallace, Mary.
  • Walsh, Joe.
  • Woods, Michael.
  • Wyse, Pearse.

Níl

  • De Rossa, Proinsias.
  • Ferris, Michael.
  • Gilmore, Eamon.
  • Howlin, Brendan.
  • McCartan, Pat.
  • Mac Giolla, Tomás.
  • Moynihan, Michael.
  • O'Shea, Brian.
  • O'Sullivan, Gerry.
  • O'Sullivan, Toddy.
  • Pattison, Séamus.
  • Quinn, Ruairí.
  • Rabbitte, Pat.
  • Ryan, Seán.
  • Sherlock, Joe.
  • Spring, Dick.
  • Stagg, Emmet.
  • Taylor, Mervyn.
Tellers: Tá, Deputies V. Brady and Wyse; Níl, Deputies McCartan and Gilmore.
Question declared carried.
Amendment declared lost.

I am now required in accordance with the Order of today to put the following question: "That the amendments set down by the Minister for Industry and Commerce and not disposed of, including that in respect of which committal would in the normal course be required, are hereby made to the Bill; that Fourth Stage is hereby completed and that the Bill is hereby passed.

Question put and agreed to.
Barr
Roinn