Product Safety - the new EU regime

EU/REGULATORY

Product Safety - the new EU regime

Richard Murphy considers some of the legal and practical implications of the new EU product safety regime.

The regulation of the safety of consumer products in the EU has been brought to a new level with the implementation of the new General Product Safety Directive across the member states. The new regime marks the end of the "silent" recall of consumer products in the EU, and imposes new onerous obligations on suppliers of consumer products to EU markets. The implementing regulations in the UK are The General Product Safety Regulations 2005 (the Regulations) which came into force on 1 October 2005.

General Product Safety

The EU product safety regime is built around the "general safety requirement". A product that does not meet the definition of a safe product (i.e. any product which, under normal conditions of use, presents no risk or only the minimum risk compatible with the product's use and which is consistent with a high level of protection for consumers) is considered "dangerous".

The Regulations impose an obligation on producers and distributors to reduce the risk of placing dangerous products on the market, and to put themselves in a position to be able to take appropriate action if it is discovered that dangerous products have been placed on the market.

Scope

The Regulations extend to all products that are made available to consumers, including ones that it is reasonably foreseeable may be used by consumers even if not intended for them. The Regulations do not extend to products that are subject to a separate comprehensive product safety regime under EU law. In practice, the only products beyond the scope of the Regulations are food and possibly pharmaceuticals. Several industries are subject to partial safety regulation, such as those involved in the manufacture and supply of toys, motor vehicles and electrical products.

Key Provisions

Some key provisions of the new EU regime include:

• producers and distributors have new obligations to conduct market surveillance and monitor safety risks;
• producers and distributors are required to notify authorities of risks;
• producers have a new obligation to recall dangerous products;
• national authorities have new powers and obligations to enforce product safety laws and prosecute those who fail to meet their obligations;
• national authorities have new powers to initiate product recalls of their own accord; and
• national authorities have new powers to share information with each other and the public.

Significantly, the new regime imposes the notification obligation on distributors as well as on producers. This means that producers could find themselves in a situation where the distributors of their products notify the authorities of alleged defects in their products, without necessarily first telling the producers.

Penalties

The penalties for breach of the Regulations are fines of up to £20,000 and/or 12 months' imprisonment for the more serious offences, such as a breach of the general safety requirement, and fines of up to £5,000 and/or three months' imprisonment for other offences. The principal responsibility for day-to-day enforcement of the Regulations in Northern Ireland falls upon the local Environmental Health Officers.

Risk Management

Effective risk management is crucial to ensuring that, as far as possible, products are safe and that a company responds effectively under the new regime to any safety problems that arise after the product has been put into circulation. A risk management system should cover all stages of the production process including design, manufacture, production, testing, packaging, storage, distribution and post-marketing surveillance.

A number of suggested action points include:

• setting up a product safety committee to co-ordinate a comprehensive risk management programme;
• a review of terms and conditions of sale and purchase to ensure that companies are not exposed to unnecessary risk;
• checking the terms of insurance cover as product recall insurance is often separate to standard product liability insurance; and
• carrying out a risk audit, an excellent way of monitoring and assessing the effectiveness of a risk management programme.

Richard is an Assistant Solicitor in the firm's Corporate Department advising on a range of EU/Regulatory matters including competition law.

Quote: Effective Risk Management