When is it clear who the manufacturer of the product is? 

An Eastern High Court ruling establishes that a professional party can easier predict who manufactured a product sold in Denmark through a Danish intermediary supplier. This ruling may make it more difficult for insurance companies to make recourse claims because they may have to bring legal action in the country where the manufacturer is situated.

In the event of personal or physical injury due to a defective product, it is often possible to obtain compensation based on the rules of the Product Liability Act.

Generally, the manufacturer of the defective product may be held liable in damages as he is subject to strict liability irrespective of whether the injury was caused by the manufacturer's error or neglect. However, the intermediary supplier may also be held liable in damages, unless it can be substantiated that the injury was not caused by the intermediary supplier's error or neglect. Intermediary suppliers are therefore less exposed to claims for damages than manufacturers.

In some situations, the intermediary supplier may obtain status as manufacturer. For instance, if it is not possible for the injured party to identify the manufacturer, cf. section 4 (4) of the Product Liability Act.

It is often easier to bring action against a Danish intermediary supplier than a foreign manufacturer, and the injured party may therefore apply this rule. However, it is a requirement that the injured party cannot identify the manufacturer of the product causing the injury. In this case, the intermediary supplier obtains status as manufacturer and is thereby subject to the most strict assessment of liability - strict liability.

IN WHICH SITUATION IS IT IMPOSSIBLE FOR THE INJURED PARTY TO IDENTIFY THE MANUFACTURER?

In an Eastern High court ruling, an insurance company assumed the legal rights of a consumer after the consumer's car - a Citröen - had burst into flames.

After having paid compensation to the consumer for damage to property and contents, the insurance company made a recourse claim against the Danish distributor of the car (intermediary supplier) claiming compensation. The insurance company submitted that the intermediary supplier was to be considered the manufacturer of the car under section 4 (4) of the Product Liability Act.

A high court majority found that the insurance company (motor car insurance) could not have had any doubt that the manufacturer of the Citröen was the Citröen group. The insurance company was therefore able to identify the manufacturer and, consequently, the Danish intermediary supplier was not to be considered the manufacturer. The court therefore found for the intermediary supplier.

However, a high court minority found that the intermediary supplier had not substantiated that the injured party or the insurance company could identify the manufacturer based on the information following the cars when sold (e.g. purchase agreement, owner's manual etc.). The consequence of this uncertainty in terms of evidence was that the intermediary supplier was to be considered the manufacturer.

COMMENTS

The ruling is interesting because a high court majority apparently applied a more strict assessment of the professional insurance company as to the question concerning identification of the manufacturer. This is presumably also why the ruling states that a non-professional plaintiff, e.g. the insured party, may successfully make the same claim. This ruling describes situations where specialised insurance companies have perhaps been placed in an inferior position compared to the insured party.

Finally, the ruling leaves some uncertainty when it comes to parties that are not to be considered equally professional as the insurance company in question. Placed between the consumer and the specialised insurance company are therefore a number of parties with uncertain legal rights.

FOR MORE INFORMATION

The Eastern High Court ruling appears from FED 2013.42Ø.

contacts

Jacob Møller Dirksen

Partner

Daniel Haue Jakobsson

Attorney