Product liability - Intermediate examination by consumer

Learning Outcomes

This article explains the principle of intermediate examination in product liability claims under common law negligence and the Consumer Protection Act 1987 (CPA 1987). For the SQE1 assessment, you need to understand how the possibility or likelihood of an examination of the product by a third party (like a retailer) or the ultimate consumer impacts the manufacturer's liability. Your knowledge will allow you to identify the conditions under which intermediate examination might break the chain of causation in negligence or provide a defence under the CPA 1987, and apply these rules to SQE1-style multiple-choice questions.

SQE1 Syllabus

For SQE1, your understanding of intermediate examination is assessed within the broader context of product liability under Tort law. You need to be able to apply the relevant legal principles to practical scenarios. Pay particular attention to:

  • The 'narrow rule' in Donoghue v Stevenson and the manufacturer's duty of care.
  • How the possibility of intermediate examination can affect the chain of causation in negligence claims.
  • The distinction between a mere opportunity and a reasonable expectation of examination.
  • The relevance of intermediate examination under the strict liability regime of the Consumer Protection Act 1987, particularly concerning defences.
  • Potential liability of intermediaries (eg, suppliers, retailers) who fail to conduct expected examinations.

Test Your Knowledge

Attempt these questions before reading this article. If you find some difficult or cannot remember the answers, remember to look more closely at that area during your revision.

  1. Under common law negligence, when is an intermediate examination MOST likely to break the chain of causation between the manufacturer and the injured consumer?
    1. When the consumer had a brief opportunity to inspect the product.
    2. When the manufacturer specifically warned the intermediary to test the product before supply.
    3. When the defect was hidden and could not be discovered by reasonable inspection.
    4. When the product was supplied directly from the manufacturer to the consumer.
  2. A consumer buys a hairdryer manufactured by 'ElectroCo'. The hairdryer has a latent defect, not discoverable by visual inspection, which causes it to overheat and start a fire, damaging the consumer's property. The consumer brings a claim against ElectroCo under the Consumer Protection Act 1987. ElectroCo argues that the consumer should have tested the hairdryer before first use. Is this likely to succeed as a defence?
    1. Yes, because the consumer is expected to carry out basic safety checks.
    2. Yes, if the instructions advised testing before use.
    3. No, because liability under the CPA 1987 is strict and the defect existed at the time of supply.
    4. No, unless the consumer was a professional electrician.
  3. Which case established that a manufacturer might avoid liability if they reasonably expect an intermediary to examine the product, potentially revealing the defect?
    1. Donoghue v Stevenson
    2. Grant v Australian Knitting Mills Ltd
    3. Kubach v Hollands
    4. Evans v Triplex Safety Glass Co Ltd

Introduction

When a product causes harm, the injured party might seek redress from the manufacturer or others in the supply chain. One factor affecting liability, particularly under common law negligence, is the possibility of an intermediate examination. This refers to an inspection or test of the product carried out after it leaves the manufacturer but before it reaches the ultimate consumer. This examination could potentially reveal the defect that caused the harm. Understanding when such an examination affects liability is essential for advising clients and answering SQE1 questions.

Intermediate Examination in Negligence

The foundational principle of manufacturer liability in negligence stems from Donoghue v Stevenson [1932] AC 562, which established a duty of care towards the ultimate consumer. However, this duty is not absolute. One significant limitation arises where there is a likelihood of intermediate examination.

Breaking the Chain of Causation

In negligence, liability requires a proven chain of causation linking the defendant's breach of duty to the claimant's damage. An intermediate examination that reveals, or ought reasonably to reveal, the defect can break this chain.

Key Term: Chain of Causation The sequence of events linking the defendant's wrongful act (breach of duty) to the damage suffered by the claimant. A new, intervening act can 'break' this chain.

The core question is whether the manufacturer could reasonably expect the examination to occur and for the defect to be detected before the product reached the consumer.

Opportunity vs. Likelihood of Examination

A mere opportunity for examination is generally not sufficient to absolve the manufacturer. There must be a reasonable probability or expectation that an examination will occur.

Key Term: Intermediate Examination An inspection or test of a product conducted by a party (such as a retailer, installer, or sometimes the consumer) between the product leaving the manufacturer and it causing harm to the ultimate consumer.

Key factors include:

  • Nature of the Product: Complex machinery might reasonably expect professional installation and inspection, whereas simple consumer goods might not.
  • Type of Defect: Obvious defects are more likely to be discovered than latent (hidden) ones (Grant v Australian Knitting Mills Ltd [1936] AC 85). If a defect could not be found even with a reasonable examination, the manufacturer remains liable.
  • Instructions/Warnings: If the manufacturer issues specific instructions or warnings to an intermediary (eg, a distributor or retailer) to test the product before supply, and the intermediary fails to do so, liability may shift. This principle was established in Kubach v Hollands [1937] 3 All ER 907.
  • Relationship between Parties: The knowledge and role of the intermediary are relevant. A professional installer might be expected to conduct more thorough checks than a typical retailer.

Worked Example 1.1

Scenario: A manufacturer produces chemical kits for schools. The instructions clearly state the chemicals must be tested by the distributor before supplying them to schools due to potential impurities. A distributor ignores this, supplies an impure batch to a school, and a student is injured during an experiment.

Question: Is the manufacturer likely to be liable in negligence for the student's injury?

Answer: Unlikely. The manufacturer gave a specific warning and instruction for intermediate examination to the distributor. By reasonably expecting the distributor to test the chemicals, the manufacturer likely discharged its duty of care. The failure of the distributor to conduct the required test breaks the chain of causation, making the distributor potentially liable instead. (Based on Kubach v Hollands principle).

Retailer/Supplier Liability

While the primary duty lies with the manufacturer, a retailer or supplier might acquire a duty of care if they ought reasonably to have inspected the goods before sale and failed to do so, especially if they have knowledge or the defect was discoverable (Andrews v Hopkinson [1957] 1 QB 229).

Intermediate Examination under the Consumer Protection Act 1987

The CPA 1987 establishes a regime of strict liability for defective products. This means a claimant does not need to prove fault (negligence) on the part of the producer; they only need to show the product was defective and caused damage.

Relevance of Examination

Intermediate examination plays a less direct role under the CPA 1987 compared to negligence. The focus is on the state of the product at the time it was supplied by the producer (or own-brander/importer).

  • Defence under s.4(1)(d): A producer can escape liability if they can prove that the defect did not exist in the product at the time they supplied it. Subsequent damage or deterioration due to an intermediary's actions or a consumer's misuse after supply might support this defence.
  • Contributory Negligence: While not explicitly linked to intermediate examination in the Act, if a consumer's failure to conduct a very basic, reasonable check (where appropriate and expected for that product type) contributes to their injury, their damages might be reduced under the Law Reform (Contributory Negligence) Act 1945. However, consumers are not generally expected to conduct technical examinations.
  • Supplier Liability: As under negligence, a supplier under the CPA 1987 generally isn't liable unless they fail to identify the producer/importer when reasonably requested (s.2(3)). Their failure to examine is not a primary basis for CPA liability against them.

Worked Example 1.2

Scenario: A consumer buys a bicycle manufactured by 'CycleSafe Ltd' from a retailer, 'BikeShop'. The bicycle's frame has a hidden manufacturing defect. The consumer uses the bike normally, and the frame snaps, causing injury. BikeShop did not inspect the frame before sale, as this would require specialist equipment.

Question: Can CycleSafe Ltd avoid liability under the CPA 1987 by arguing that BikeShop or the consumer should have examined the frame?

Answer: Unlikely. Liability under the CPA 1987 is strict. The defect existed when CycleSafe supplied the bike. It was a latent defect not discoverable by reasonable visual inspection by BikeShop or the consumer. The s.4(1)(d) defence would likely fail. Contributory negligence is unlikely as normal use is expected. CycleSafe Ltd is likely liable.

Exam Warning

Do not confuse the role of intermediate examination in negligence (breaking the chain of causation) with its more limited role under the CPA 1987 (primarily relating to defences, especially s.4(1)(d)). In SQE1 questions, identify whether the claim is framed in negligence or under the CPA 1987, as this dictates how intermediate examination affects liability.

Key Point Checklist

This article has covered the following key knowledge points:

  • Intermediate examination involves inspecting/testing a product after it leaves the manufacturer but before it reaches the consumer.
  • In negligence, a reasonable expectation of intermediate examination that should reveal the defect can break the chain of causation, shifting liability from the manufacturer.
  • Factors determining the effect of intermediate examination in negligence include the nature of the product, type of defect (obvious vs. latent), manufacturer warnings, and intermediary knowledge.
  • A mere opportunity to examine is insufficient; there must be a likelihood or expectation of examination.
  • Under the CPA 1987 (strict liability), intermediate examination is less significant for liability but may be relevant to defences (eg, defect arose after supply) or contributory negligence.
  • Consumers are generally not expected to conduct detailed technical examinations.

Key Terms and Concepts

  • Intermediate Examination
  • Chain of Causation
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