Ismail recently moved into the third floor of a high rise council building in Pontyberry, South Wales. Through an online retailer XO.com, Ismail bought a new fridge-freezer manufactured by COOLPOINT to be used in his kitchen. The new fridge-freezer was delivered and installed within 48 hours.
Five days later, the fridge-freezer started to make funny noises with burnt plastic smell from the back of it. Ismail contacted XO.com immediately. The customer service of XO.com assured him that the noise and smell were normal because the product was new. They kept Ismail’s details and asked him to keep the fridge-freezer away from the wall for at least 1 metre. Ismail’s kitchen in the council flat was too small so he could not follow the instruction.
A week later, Ismail was out visiting a friend in the same building. In the meantime, Ismail’s new fridge-freezer caught fire. Consequently, the building was burnt down. Ismail and his friend fortunately escaped the fire but more than 100 persons in the same building lost their lives. According to the investigation report, the origin of the fire was Ismail’s newly purchased COOLPOINT fridge-freezer from XO.com. It was later found out that this was not an independent incident. Reportedly there were already 250 similar cases of fridge-freezer catching fire in the UK involving the same model.
According to the investigation report, the back panel of Ismail’s COOLPOINT fridge-freezer was made of plastic. COOLPOINT was the British subsidiary of WHITEHOUSE, a US conglomerate of electronic products with a global presence. In the US, health and safety regulations prohibited any plastic back panel for fridge-freezers. In the UK, however, there was no such prohibition.
- You are a Trading Standard Officer in Pontyberry. Please advise any possible actions you might take against XO.com and COOLPOINT.
- You work in the Citizen Advice bureau. Advise Ismail as to any product safety claims he might have in regard to the damages caused by his COOLPOINT fridge-freezer.
- You are a lawyer representing some of the affected citizens in this fire. Advise Ismail regarding collective action against XO.com, COOLPOINT and WHITEHOUSE.
Consumer protection laws are meant to protect consumers from product liability. The Consumer Rights Act of 2015 particularly provides that the consumer of products has the statutory right to; products that are of satisfactory quality, products that are fit for the intended purpose, products that match a sample, products that match a model examined, among other rights. Manufacturers and retailers bear the responsibility of ensuring that goods conform to the required standards. If the said parties do not live up to the underpinned expectations, they are likely to face product liability suits, as well as, product safety suits. Based on an analysis of the present case study, this paper seeks to analyze the actions that can be taken against companies that infringe on the consumer protection laws, the different product safety claims that can be made by claimants, and the effectiveness of collective action in presenting product liability claims.
Actions as a Trading Standard Officer
In the present case, Ismail, the consumer of a new fridge-freezer that was manufactured by COOLPOINT and sold through XO.com, an online retailer, was a resident of Pontyberry, South Wales. As a trading standards officer (TSO) in Pontyberry, the first action I would take against XO.com is to investigate them in relation to how they handled the report that was presented by Ismail before the fire occurred, how they have handled similar situations, and whether they trade in other defective products. The investigatory powers of a TSO are provided for under Schedule 5 of the Consumer Rights Act of 2015. Section 5 of the schedule provides that if an enforcer (the TSO) suspects a breach of legislation (in this case the Consumer Rights Act of 2015); the TSO has the power to require the production of information (Consumer Rights Act, 2015). I would, therefore, require XO.com to provide accurate information on how they handled the reported issue. In line with the investigatory powers of a TSO, I would go to the physical address of XO.com and observe the carrying on of business and possibly take a test purchase of a similar product for use in evidence.
As a TSO I will also exercise my investigatory powers against COOLPOINT by entering their premises to inspect goods and documents. The goods that will particularly be inspected will be the fridge-freezer make that is similar to the one that was purchased by Ismail. In the present case, although there is no regulation against the installation of a plastic back panel, the company through its conglomerate was aware of the danger of the said installation and still allowed the sale of the products. A sample COOLPOINT model that was purchased by Ismail will, therefore, be seized for use in evidence against the company.
I will also apply to the court for enforcement orders against COOLPOINT. This application can be made to the High Court or the County Court and it will request the court to require the company to comply with the law. Although as stated above there is no regulation against the installation of plastic backs on fridge-freezers, the Sale of Goods Act of 1979 provides that goods are faulty if they are not of satisfactory quality (Sale of Goods Act of 1979, Section 14). One of the factors that are relevant to the quality of products is the fitness for purpose that is usually required for any particular purpose for which the product was bought (Sale of Goods Act, 1979). In this case, when Ismail bought the fridge, he did not intend to place it one meter away from his kitchen wall because he was not informed of this need and his kitchen size did not permit the arrangement. To the extent that the company willfully manufactures goods that do not comply with the law (since the quality is unsatisfactory), the company must be required to comply with the law. Similarly, the enforcement order will require the company to take enhanced consumer measures (Sale of Goods Act, 1979). Through the enforcement orders, the company will be required to make changes to its business operations and to pay compensation to the victims in Pontyberry, South Wales, as well as, cater for the costs of the investigations and the court proceedings.
Advice as a Member of the Citizen Advice Bureau
- The Product Safety Claim for Negligence
One of the product safety claims that Ismail has against COOLPOINT and XO.com is that of negligence. Negligence is a tort and it can generally be described as the failure to take due care thus causing harm to someone else. This harm can be in the form of damage to property, personal injury, and economic loss. In this regard, the first element that will need to be proven by Ismail is that duty of care was owed to him by the two parties. A duty of care is a legal obligation that is imposed on a person requiring the said person to adhere to a required reasonable standard of care while performing activities that have the potential of harming others. In the famous case of Donoghue v Stevenson (1932), Lord Atkin noted thus; “You must take reasonable care to avoid acts or omissions which you can reasonably foresee would be likely to injure your neighbor” (Donoghue v Stevenson, 1932). This is the general rule appertaining to the duty of care. The question that was further addressed in the case regards the definition of a neighbor. Lord Atkin emphasized that a neighbor is any person who is “so closely and directly affected by my act that I ought to reasonably have them in my contemplation as being so affected when I am directing my mind to the acts or omissions that are called into question” (Donoghue v Stevenson, 1932, p. 100). In line with the above case, COOLPOINT and XO.com owed Ismail a duty of care since they were performing activities that had the potential of harming consumers.
Apart from the ‘Neighbor principle’ a two-stage test is also often traditionally undertaken to determine whether an individual owes a duty of care to another. The first step is that there must be a special relationship of proximity between the party causing the risk and the party incurring the harm to make it reasonable for the former party to appreciate that their actions or inactions would cause some form of harm to the latter party (Donoghue v Stevenson, 1932). Once the first stage has been satisfied, it is consequently necessary to determine whether there is any cause for the defendant not to owe the said duty of care (for example; if there are policy reasons). In the present case, there is a special relationship of proximity between Ismail and COOLPOINT, as well as, XO.com. The special relationship (consumer-manufacturer relationship and retailer-buyer relationship) makes it reasonable for COOLPOINT and XO.com to reasonably foresee that their actions or inactions could cause harm to Ismail. In the case of the relationship between XO.com and Ismail, the special relationship permitted the correspondence between the two parties with Ismail reporting the signs of faultiness that he had witnessed and XO.com advising accordingly. This special relationship could have prompted XO.com to take steps not to cause harm by addressing the reported issue with urgency.
The second element that must be proven in a negligence claim is that the defendant breached the duty of care. This element involves considering whether or not the action or omission of the defendant gives rise to liability (Donoghue v Stevenson, 1932). The question that needs to be answered in this regard is whether the said defendant met the lawfully required standard of care when engaging in the subject matter activity. This element of negligence, therefore, requires proof of fault on the part of the defendant, and this fault is proven when it is illustrated that the defendant acted unreasonably in the circumstances. When the risk of harm outweighs the cost of the inconvenience attached to taking precautions, a defendant is generally regarded as having failed to exercise the duty of care. In the present case, the risk of harm far outweighed the costs attached to the inconvenience of taking the necessary precautions. When Ismail reported the signs of faultiness to XO.com, the expense that XO.com would have incurred in remedying the faultiness by, for instance, repossessing the product and forwarding it to the manufacturer for assessment or sending in an engineer to look into the matter cannot be compared to the risk of harm. Considering the fact that 250 other similar cases had been reported, reasonably knew that the risk of harm was present. Similarly, the cost of taking precautions on the part of COOLPOINT by removing the plastic backs or recalling the faulty products from the market cannot be compared to the associated risk of massive destruction of property and loss of lives as a result of consumers’ use of the faulty product. In light of the foregoing, the element of breach of duty of care has been achieved.
The third element in a negligence claim is that harm must have been suffered by a claimant. This is an essential part of the negligence claim. In the case of Johnston v Nei International Combustion Ltd  UKHL 39, the claimants were not able to establish that they had suffered any harm in the legal sense. As a result of this fact, their claim failed (Johnston v Nei International Combustion Ltd, 2007). The question that is usually answered regarding the third element of negligence is whether the specific breach of duty that has been complained of is the actual cause of the damage that has been suffered. It essentially should not be seen that there is remoteness between the damage and the breach of duty. A defendant is not liable for damage if there is remoteness between the two factors. Actual causation is proven using the ‘but-for’ test. It precludes that ‘but-for’ the action or inaction of the defendant, the claimant would not have suffered harm. This element has similarly been proven in the present case. The harm suffered by Ismail is directly a result of the actions or inactions of XO.com and COOLPOINT. ‘But-for’ XO.com’s failure to promptly address the concerns raised by Ismail, Ismail would not have suffered damage to property and economic loss. Similarly, ‘but-for’ COOLPOINT’s failure to make proper installations on the backside of the fridge, Ismail would not have suffered harm. The fire was caused by the poor installation (through the use of plastic) and this was a result of the failure of COOPOINT. The third element of negligence has, therefore, been met. Since all the elements of negligence have been met, Ismail has the right to claim damages for the harm suffered.
- The Strict Liability Claim
The Consumer Protection Act of 1988 introduced the claim of strict liability for faulty products (Consumer Protection Act, 1987). This claim exists alongside the negligence claim. Based on the strict liability claim, the manufacturers of faulty goods are held liable for the harm caused by such products (Consumer Protection Act, 1987). This essentially means that individuals who are injured by faulty goods can sue for damages without necessarily proving that the manufacturer was negligent. All the complainant is required to prove is that the product was faulty and that a loss or damage has resultantly been occasioned by the product. In ordinary instances, before a defendant can be held liable for injuries caused to another person, it is legally required that the claimant proves carelessness on the part of the defendant. Under the strict liability claim, on the other hand, a claimant is only required to show that the defective product which caused harm was manufactured or sold by the defendant. A defective product is in this regard defined as one whose safety “is not such as persons generally are entitled to expect” (Consumer Protection Act, 1988, Section 3). The cumulative harm suffered by the claimant as a result of the action or inaction of the defendant must exceed £275. The Consumer Protection Act of 1988 provides that;
“no damages shall be awarded to any person by virtue of this Part in respect of any loss of or damage to any property if the amount which would fall to be so awarded to that person, apart from this subsection and any liability for interest, does not exceed £275” (Consumer Protection Act of 1988, Section 5(4)).
Under the strict liability claim, a claimant is, therefore, required to prove that the damage occasioned by the use of the defective product exceeds £275. According to the above-mentioned Act, it is further provided that a person cannot present a strict liability claim about damage to the defective product itself (Consumer Protection Act, 1987). The harm must relate to damage to other property, personal injury, and other economic losses. When it comes to the question of liability, the Consumer Protection Act of 1988 provides that the manufacturer of a product is responsible for the payment of damages in the strict liability claim. The claim can also be made against a non-manufacturer (such as a retailer) and this can particularly be done only if the said party is actively involved in selling that specific kind of product.
In the present case, the fridge-freezer was a defective product since its safety standards were not such as individuals were generally entitled to expect. When a person purchases a fridge-freezer, they do not expect it to soon after start making funny noises with burnt plastic smell, and they do not expect the product to catch fire and set the entire building ablaze. The product in this case was clearly defective. In the circumstances, it can be presumed that the cumulative harm suffered by Ismail exceeds £275 since there was property damage. The whole of his apartment was consumed by fire and this automatically means that all his household goods (and possibly other prized belongings) were destroyed. Under the strict liability claim, Ismail is entitled to recover damages for this loss. In line with the provisions of the Consumer Protection Act of 1988, the manufacturer (COOLPOINT) is liable to pay damages. XO.com is also liable because it is actively involved in selling the product. In line with the above analysis, Ismail can make a product liability claim of strict liability.
Collective Action against XO.com, COOLPOINT, and WHITEHOUSE
The significance of collective action in achieving justice in instances when harm has been committed against consumers on a large scale cannot be underestimated. When claimants pursue individual suits, the private endeavor can fail since individual claims can be time-consuming, costly, and risky (Van den Bergh & Visscher, 2007). Similarly, the remedies awarded on an individual basis can be limited as compared to the award provided in a collective action suit. Collective action ensures that consumer protection laws are safeguarded and that the economic costs attached to the suit are diminished since they are divided among the claimants. Collective action against the three defendants is, therefore, advisable in the present circumstances.
Collective action is presently done using several means. The first means is through instituting a test case procedure (Van den Bergh & Visscher, 2007). Once the parties request or once the court decides accordingly, the common issues of the claim can be noted and decided within a single trial (Van den Bergh & Visscher, 2007). Once a determination as to liability has been made, it follows that the unique losses suffered by each of the claimants are satisfied. For Ismail, because the damage to property and economic loss he has experienced is relatively similar to the losses suffered by the other citizens who are bringing the action against the three defendants, bringing his claim through a collective action would be a viable idea.
The significance of consumer protection laws in safeguarding consumers from product liability cannot be underestimated. The laws ensure that manufacturers and retailers do not engage in actions or inactions that are harmful to consumers and that when consumers suffer harm, they are duly compensated. In the present case, as a Trading Standard Officer, the possible actions I would take against XO.com and COOLPOINT include; investigating the companies concerning the matter complained of and applying to the court for enforcement orders against the companies. The investigatory powers can be exercised in line with the Consumer Rights Act of 2015. The enforcement orders will ensure that the companies comply with consumer protection laws. This will prevent a similar occurrence of possible future accidents. As a member of the citizen advice bureau, the advice that I would give to Ismail with regard to the product safety claims is that he pursues the claim of negligence and strict liability. In the present case, Ismail should take part in the collective action since he is likely to get a better outcome through collective action as opposed to an individual suit. Collective action can in this regard be done through a test case procedure.
Consumer Protection Act of 1987.
Consumer Rights Act of 2015.
Donoghue v Stevenson  UKHL 100.
Johnston v Nei International Combustion Ltd  UKHL 39.
Sale of Goods Act of 1979.
Van den Bergh, R., & Visscher, L. (2007). The Preventive Function of Collective Actions for Damages in Consumer Law. Erasmus L. Rev., 1, 5.