Brexit: Product Liability for Imports From Great Britain
An important consequence of Brexit is that Dutch importers will become liable for defects and product safety of goods imported from Great Britain.
Product Liability and Production Guidelines in the EU
A European manufacturer is liable for damage caused by defective products. Also, each product must comply with the EU product directives. By placing a CE marking on the product, the manufacturer indicates that he can demonstrate that the product complies with all health and safety standards.
The importer who brings the product onto the EU market also has a responsibility. The importer must know whether a CE marking is required and must demonstrably act with due diligence to avoid that the rules are infringed. But it is the manufacturer who is ultimately responsible.
If the manufacturer is not based in the EU, this is different. The importer is legally liable as a “manufacturer”. The importer then bears product liability and must check whether the manufacturer can demonstrate the conformity of the product.
In that case, the importer is also the first point of contact for the Dutch authorities that monitor product safety (such as the Dutch Food and Consumer Product Safety Authority).
Product Liability After Brexit
Due to Brexit, a British manufacturer is no longer established in the EU. As a result, product liability shifts to the importer in the Netherlands.
For example: You import toys that you buy from a UK supplier. As of 1 January, 2021, you are fully responsible for ensuring that they toy is safe and has no defects.
The consequences of this are:
- You are directly liable to the consumer if the product is deemed dangerous or has a defect.
- This is a liability risk: In case of a defect you are liable towards the consumer, regardless of whether you can do something about the defect.
- You must keep a file that shows compliance with the EU product directives.
- You bear the costs of handling claims and cannot settle claims by referring to the manufacturer.
- You are the point of contact for the authorities if there are problems with product safety.
- Not only do you then have a dispute with the Dutch consumer and regulator, you also have a discussion with the British supplier, who will try to avoid liability. After all, he is not based in the EU.
- The discussion with the supplier is extra difficult, because British companies no longer fall under the European legal system. You have to get your rights in Great Britain.
It’s clear that Brexit will greatly increase the legal risks of doing business with a British supplier.
What Should You Pay Attention To?
Product liability is valid for a maximum of 13 years after the product has been put into circulation. Therefore you should ask yourself the following:
- Am I willing to take on this additional liability?
- Does my supplier have a CE marking on its products?
- Am I sure that the products I am importing are safe? Do I know the standards that apply to this?
- Do I know what to do if a supervisor approaches me?
- Is it stipulated in the contract with the supplier that he is responsible for product conformity, or has this responsibility been shifted to me as a buyer?
- Is the supplier willing to agree to be liable to me for any damages that must be paid?
- Can the supplier still be held accountable for any liability in 13 years’ time?
- Does my insurance cover product liability? If not, what are the costs of this insurance?
It’s also important to note that a lawsuit in Great Britain is not only complicated but oftentimes also more expensive than in the Netherlands. If you cannot reach an agreement with your supplier, then you could have a costly problem.
Also note: Importing a product in order to then rent it out or otherwise make it available also falls under the scope of product liability.
Are you an importer or do you export from the United Kingdom? You may have important legal questions. Our advisors are happy to help you. Contact Crowe Peak today.