Product Development Risks (Hansard, 13 May 1991)

Viscount Astor
My Lords, as far as I am aware, no cases involving a claim for damages under Part I of the Consumer Protection Act 1987 have yet come before the courts. Therefore the use of the development risk defence has not arisen.

§ Lord Allen of Abbeydale
My Lords, I am much obliged to the noble Viscount for that reply. In the light of the information it contains, do the Government still take the view that this defence is absolutely crucial to the prosperity of British industry notwithstanding the fact that the German drugs industry, for example, seems to manage perfectly well without it? Have the Government yet resolved their differences with the European Commission about the way in which, contrary to the decision taken in your Lordships' House, the Act implemented the provision in the directive?

Viscount Astor
My Lords, the noble Lord is absolutely right. The Commission has expressed concern about the way in which the UK implemented the directive. We have responded in full to the Commission's reasoned opinion of October 1990. It is now for the Commission to decide whether or not it wishes to pursue the matter through the European Court. The directive came into effect only in March 1988 and applies to goods first supplied after that date. It is pet haps not surprising that no cases have yet reached the courts when one considers the period of time involved where a product has been put into circulation, has proved to be defective, has caused injury and the claimant has taken legal advice.

§ Lord Williams of Elvel
My Lords, does the noble Viscount recall that during the passage of the Consumer Protection Act through your Lordships' House an amendment was passed which reflected precisely the words of the directive? The amendment was reversed in another place after two minutes' debate. That happened, I believe, after the 1987 general election had been called. Will the Government now say whether they are in favour of the words of the directive as passed in your Lordships' House and of the amendment passed in your Lordships' House, or whether they still abide by their decision to reverse that amendment in another place?

Viscount Astor
My Lords, we are in favour of the words contained in the Consumer Protection Act as it was passed. The wording was chosen to reflect more closely the meaning of the directive when transposed into UK law. We believe it made the defence easier to understand for both the courts and businesses involved.

§ Lord Williams of Elvel
My Lords, I am sorry to return to the point. I must however ask the noble Viscount, with respect, whether he is not aware that that was not the argument the Government put forward at the time. There was no question of the amendment passed by this House being out of order in any sense or failing properly to translate into UK law the words of the directive. It was because the Government took a quite different view of the effect of what might be contained in the then Bill that they reversed the amendment. Will the Government now take a different view of the matter?

Viscount Astor
No, my Lords. The Government take the same view they took previously. Section 1(1) of the Consumer Protection Act states that Part I of the Act is intended to implement the EC directive on product liability. Therefore, in any dispute over the wording, the UK courts would be bound to interpret the legislation in accordance with the meaning of the directive. Member states of the EC are, of course, free to adopt wording in national legislation that is different to the wording of a directive provided that the objective of the directive is achieved.

§ Lord Cockfield
My Lords, as this matter is almost certain to go to the Court of Justice would it not be better to wait until that court has dealt with the matter?

Viscount Astor
My Lords, the noble Lord makes an interesting point. We await the reaction of the European Commission.

§ Lord Peston
My Lords, I hope that the noble Viscount can clarify something he said which is rather puzzling. Surely if a case comes before the courts in this country, the courts are obliged simply to interpret the Act that is on the statute book. Am I right in saying that the courts cannot say that the Act is meant to represent the directive and therefore they may consult the directive? I speak as a layman. However, am I not right in saying that a court in this country must simply interpret the Act that is before it?

Viscount Astor
My Lords, the noble Lord is absolutely right. No doubt he recalls Section 1(1) of the Consumer Protection Act which refers to the fact that Part I of the Act is intended to implement the directive.

§ Lord Allen of Abbeydale
My Lords, is the noble Viscount aware that many people take the view—I do not wish to pursue the matter in the light of what has just been said—that the Act does not implement the directive? Will the Government seriously consider taking an initiative and doing away with the defence altogether when the directive comes up for review in 1995?

Viscount Astor
My Lords, we have grasped the initiative in this country. I know of the noble Lord's great knowledge and expertise in the area. This country was the first to implement the directive before the required date. France, Belgium, Ireland and Spain have still not done so.